Despite long-term uncertainties, Brexit offers a treasure trove of potential opportunities for China-U.K. and China-European Union (EU) relations in the future, with China eyeing a potential free trade agreement with the U.K. for wider world market entrance and RMB internationalization, Chinese experts said.

The U.K.’s breakaway from EU membership opens the door to freer trade with China, currently the U.K.’s sixth largest export destination and third largest source of imports. Reciprocally, it could allow Chinese products that meet U.K. standards to enter a vast swath of Commonwealth nations in Africa, Latin America and South Asia, according to Wei Jianguo, vice chairman of Beijing-based think tank China Center for International Economic Exchanges (CCIEE), during a CCIEE-moderated panel on Friday.

Existing China-U.K. mechanisms are “poised to accelerate,” Wei said, citing the 1.7-billion-pound ($2.12 billion) Royal Albert Docks project.

In May 2013, Chinese developer ABP sealed the mega-deal with London to turn the historic dock into a 3.5-million-square-foot office complex, making it a bustling Asian business port and London's third business district. The project has steadily taken shape, as China’s CITIC Construction signed a deal to become the project’s general contractor in October 2015, witnessed by Chinese President Xi Jinping and U.K. then-Prime Minister David Cameron. On Nov. 10, 2016, four major Chinese banks joined hands to follow up on its financing.

Witnessed by Chinese President Xi Jinping and U.K. then-Prime Minister David Cameron, China’s CITIC Construction signed a deal to become general contractor of China's New Financial District in London, Oct 21, 2015.

Refuting reports that some Chinese enterprises view Britain as merely a springboard to enter the wider European market, and that Brexit would jeopardize this effect, Wei said that is not the case based on what he observed during recent visits to Jiangsu and Zhejiang provinces, both strongholds of private companies with global reach.

“I met people from Huawei, Geely Auto and many more private enterprises. They said they don’t see any investment as a stepping stone to another, because each new market is different,” Wei said.

Brexit might also give a boost to Taiwan-mainland economic integration, according to Wei. If a China-U.K. free trade agreement grants China entry into Commonwealth countries, opportunities will be created for mainland enterprises to strengthen exchange with their Taiwanese counterparts.

Panelists expressed optimism about the future of China-U.K. relations, citing, among other factors, the so far mild nature of the U.K.’s departure from the EU. The economy of the U.K. has maintained good momentum after the Brexit announcement. In 2016, its GDP increased by 1.8 percent, the highest rate in Western Europe and second fastest in the G7 group after Germany.

U.K is a main hub for the offshore trading of Chinese currency. The two countries will continue to benefit from their highly complementary economies, with China in need of help with green finance and the U.K. wanting Chinese exports of mechanical products, textiles, raw materials and high-speed rail investment, said Zhang Yansheng, chief researcher at CCIEE.

“A China-U.K. free trade agreement will establish Sino-British relations as an example of China's ‘new form of great-power relationships’ with developed countries. It might also pave the way for a China-EU bilateral investment treaty (BIT)”, said Ding Yifan, an economist at the State Council's Development Research Center.

Donald Tusk, President of the European Council and Chinese President Xi Jinping at G20 meeting, Semptember 2016.

Security cooperation the “Blue Ocean” between China, EU

Though China firmly upholds EU integration, as it is in the interest of EU member states, which supports a stable investment environment for China, a weakened EU in the post-Brexit era may display a stronger reliance on the Chinese market, especially pending a combative stance from the Trump administration, panelists pointed out.

Experts have encouraged talks about a China-EU bilateral investment treaty, though the talks have stalled since their start in 2013 due to a lack of unanimous recognition of China’s market economy status in all 28 EU member states.

As Wei noted, the EU has apparently stepped up trade talks overall, as it formed a free trade agreement with Canada in October of last year, and pledged to ink one with Japan by end of 2017. 

According to Feng Zhongping, vice president of the China Institute of Contemporary International Relations, China’s Belt and Road Initiative has given rise to a new arena of China-EU cooperation: regional security management. The EU has rich experience in North Africa and the Middle East, and China needs to protect its investment as the Initiative prepares to bring more deals to those regions.

Addressing the EU's incessant protectionism, panelists cited EU efforts to thwart China’s $3 billion Hungary-Serbia high-speed rail project in February, a “priority project” of the Belt and Road Initiative. Zou Hong, a researcher from the Chinese Academy of Social Sciences, suggested that China halt its explosive investment in the EU to avoid negative consequences, and to instead carefully search out high-quality investment projects.

China will begin to fully explore its new relationship with the EU during the One Belt, One Road summit to be held in Beijing in May, the G20 summit in Hamburg in July, and activities celebrating the 45th anniversary of China-Germany diplomatic ties in October, panelists said.