British Prime Minister Theresa May has made her clearest statement yet about the terms by which she intends to guide her country out of the European Union, attempting to address criticisms that her government lacked a negotiating strategy for Brexit and a vision for Britain outside the EU bloc.

On the day that Chinese President Xi Jinping urged the world to reject protectionism, embrace free trade and a new form of economic globalization at the World Economic Forum in Davos, May declared that Britain:

- Will leave the EU customs union, the arrangement which guarantees no tariffs for members but insists on common tariffs for external trade. May says leaving the customs union will allow Britain to strike trade deals with other countries.

- Will take total control over immigration policy, meaning a new immigration system for EU nationals and potentially changes to the existing international visa system.

Post-Brexit Britain must strike new free trade agreements with the EU and beyond, while maintaining inward investment and retaining its appeal as a tourist destination. And amid the uncertainties, what does May’s Brexit plan mean for China?

China-UK relations grew steadily while David Cameron and George Osborne were in office, but following the Brexit vote, the prime minister and finance minister – both of whom were strong proponents of EU membership and closer ties with China – departed and the so-called “golden era” entered a new phase. 

Relations between the new prime minister and China got off to a rocky start, when she ordered a pause to the high profile Hinckley Point nuclear plant – an 18 billion British pound project dependent on Chinese funding. But May made a concerted effort to build relations in November 2016 when she pledged up to 40 million British pounds to the Asian Infrastructure Investment Bank.

Exiting the customs union certainly eases the path to a China-UK FTA.

British Finance Minister Philip Hammond said that after the Brexit vote he had begun discussions with China on a deal allowing major Chinese banks and businesses more access to the UK economy. Chinese Ministry of Commerce spokesman Shen Danyang said in August 2016 that it “shouldn't take long to complete China-UK FTA talks if both sides want it to be done within a short period.”

China has continued to invest in Britain in the post-Brexit era.

The City of London has acted as a gateway to Europe for Chinese investors and financial institutions to the rest of the EU.

May took a hard line on visas in her previous role as home secretary. Immigration was a significant underlying factor in the Brexit vote, and controlling inflows from the EU is the immediate challenge for the government.

Britain’s reputation as a tourist and shopping hotspot, in the wake of Brexit, has been boosted by the severe depreciation in the pound – making goods for overseas visitors cheaper. The Global Blue Consultants firm says spending by Chinese tourists in October and November 2016 rose by 63 percent, and the UK tourism agency Visit Britain expects the biggest rise in tourist spending in four years in 2017. 

The consequences and manner of Britain’s decision to leave the EU are still far from certain. The aims stated by May are just that – an eventual deal has to be agreed by Britain on one side, and individually approved by each of the remaining 27 member states. EU leaders insist the final deal must be less attractive than membership of the bloc. 

In addition, German and French elections in 2017 could alter the balance of Europe. If Europe becomes more protectionist and Britain commits further to free trade, the appeal of a fast, mutually-beneficial FTA between the UK and China will surely grow.