Chinese state media reported earlier in the month that the Chinese Ministry of Commerce wants to do a UK free trade deal. Mr. Hammond has now revealed that Britain is also keen.

It will be the first time the UK has embarked on such a major project with the second largest economy in the world.

And will raise concerns about cheap manufactured goods entering the UK more easily.

So what will Brexit really mean to UK, here are the following impacts:

'More opportunity'

In return for greater access to the UK for its manufactured products and investment, China would reduce barriers to Britain's service industries like banking and insurance as well as UK goods.

That would be an important source of export income for Britain.

"The mood music that I have heard here is very much that this will mean more opportunity for countries like China that are outside the European Union to do business with Britain," Mr Hammond said.

"And as Britain leaves the European Union and is not bound by the rules of the European Union perhaps it will be easier to do deals with Britain in the future."

--"We already have a strategic partnership with China.

--"We have hugely increased our trade with China, investment both by British companies into China and by Chinese entities into the UK.

"That's about as far as we can go while we are members of the European Union.

"But once we are out of the European Union then I have no doubt on both sides we will want to cement that relationship into a firmer structure in a bilateral way that's appropriate.

"That's something we will have to explore in the future."

'More dependence on China’

Li Xiaopeng trusts that the UK will remain a large economy even after Brexit, and so Chinese firms will still be able to operate from the UK. And he expects that the UK will depend on China after Brexit, which will cause the UK to promote renminbi internationalization even more.

Li believes that a divided EU will also be more dependent on China, because without the UK, Brussels will have fewer bargaining chips in negotiations with Beijing. In addition, Brexit weakens the EU’s position on its own values, such as human rights, so Li thinks that Brexit might make Europeans more humble about these values in their dealings with China.

'Adjusting China Foreign Policy’

Europe expert Feng Zhongping claimed that China should strengthen economic cooperation with the UK, although Feng points out that the future EU-UK economic relationship needs to be determined first, for example with regard to the question of free trade agreements. Therefore, China needs to pay close attention to the future development of EU-UK relations and the impact it might have on China. Finally, Feng said that China needs to seek cooperation with the UK on mutual global interests, such as strengthened cooperation on global governance issues within the framework of the G20. Feng concludes that despite the political and economic challenges the EU and the UK face, China need not necessarily suffer along with them, so long as it adjusts to the changes and maintains positive relations with both the EU and the UK.

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Opportunities and challenges for UK businesses in China

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