China warns of "global shadow" caused by Brexit

Oliver Gill
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Finance Minister Lou Jiwei Gives Press Conference Of NPC
Lou Jiwei said the economic uncertainty caused by Brexit could go on for some time (Source: Getty)

China's finance minister has warned that Brexit could “cast a shadow over the global economy”, creating financial uncertainty for the world’s second-largest economy and largest exporter.

Speaking at the first annual meeting of the Asian Infrastructure Bank in Beijing this weekend, Lou Jiwei pointed to a prolonged period of uncertainty in the global economy but added the full impacts would be “difficult to predict now”.

Such concerns were echoed by the head of Chinese economic planning, Xu Shaoshi, at the World Economic Forum (WEF) in Tianjin, northern China yesterday. Shaoshi advised that Chinese companies may want to adopt an approach of “wait and see” before committing to further investment in the UK.

Also speaking at the WEF were a host of leading economists, who delivered mixed opinions on what Brexit would mean for China.

Huang Yiping, a professor at Peking University and a member of the central bank's monetary policy committee, warned Brexit could be the start of a wider retrenchment from economic globalisation.

"If (Brexit) is an important landmark in terms of a reversal of globalisation, I think that's very bad for the world, [and] it's very bad for China," he said.

However, Li Daokui, a former Chinese central bank adviser played down the impact: "China is perhaps one of the least impacted economies in the world by the event of Brexit. The only short-term impact I can think about is the exchange rate of the renminbi,” he said.

Also speaking at the WEF conference, was the man famed for predicting the global financial crisis in 2008, Nouriel Roubini. While he agreed that Brexit would “create a whole bunch of uncertainties”, Roubini stopped short of predicting another global economic meltdown.

"I don't expect a global recession or another global financial crisis," he added. "I think the impact of Brexit is significant but not of the same size and magnitude of the one we had 2007 to 2009," he said.