The below Parliamentary question was asked by Julie Cooper on 2016-01-18.
To ask Mr Chancellor of the Exchequer, what steps his Department is taking to protect UK businesses, the economy and the City from turbulence in Chinese stock markets.
Harriett Baldwin
The Treasury continuously monitors global economic developments, including those in China, and their impact on the UK as part of the normal process of policy development.
The Chancellor has warned that “last year was the worst for global growth since the crash and this year opens with a dangerous cocktail of new threats from around the world.” As one of the most open trading economies in the world with a large financial sector, we have to recognise that the UK is not immune to the continued problems being experienced in the world economy.
We should not let this put us off engaging with China. As the Chancellor said while leading the UK’s Economic and Financial Dialogue with China in September 2015, both countries: “have a shared commitment to laying the foundations for stronger, more productive economies that can weather periods of uncertainty. At the same time, we need to continue to pursue the longer-term reform challenges that both our governments are pursuing.”
The Bank of England’s 2015 stress tests modelled a severe slowdown in commodities and emerging markets. No banks were required to submit revised capital plans following the stress tests. This provides further reassurance that the UK’s banking system is capable of weathering future financial storms both at home and abroad.