With Brexit vote almost 3 hours in, we take a look of relevant data and comments from major media organizations regarding UK-EU relation, how the result would impact on UK, Hong Kong and China.
First of all, what is Brexit and what is EU?
Britain + exit = Brexit. It’s the idea that the Brits may vote to leave the European Union. There are some strong commercial reasons to NOT do so, but the Brits don’t like all the “social” bits that go along with staying. (We’ll get to that in a minute). So, this week, the UK will vote on a referendum: Should I stay or should I go? And if it decides to bolt, things can get verrry messy. (CNN)
The European Union is a group of 28 countries that decided it would be cool if its citizens could go about vacationing and trading with each other without worrying about all the red tape. Its roots date back to World War II. After six years of fighting, Europe was decimated. Economies were in the toilet. Old enemies had to accept the fact they’ll need to live with each other (like France and its old occupier, Germany). So, little by little, countries started forming partnerships. By the 1990s, we had the modern European Union. It represents half a billion people. The idea is: If you’re linked economically, you’re less likely to bicker and fight. (CNN)
Right before the official voting, the Remain vs Leave votes according to FT.com was 47% vs 45%, it’s a very close call especially with about 8% of Brits uncertain about how they would vote.
Further reading on FT.com about the poll
Why would nearly half of the people want to leave EU?
There are 7 major reasons according to CAMPAIGN FOR AN INDEPENDENT BRITAIN, including framing, fishing, the economy, sovereignty, jobs, trade and immigration. Immigration seems to become the most debated issue that most Brits care about.
For a lot of the people who want out, yeah. EU citizens can live and work in any EU country, and guess where most of them flock to? A whole 13% of the UK’s population are people from other countries. Some Brits feel higher immigration puts a strain on healthcare and education, keeps wages low and puts local workers out of a job. And they’re also freaking out about the way the Syrian migrant crisis is playing out in other parts of Europe. They think that Brexit will let the UK decide on its own — without having to conform to the rules of the EU — how to control its borders. (CNN)
Is EU policy really made a difference on UK’s population?
Here’s a visual guide on what is going on in UK as a member of EU from FT.com: https://ig.ft.com/sites/the-uk-in-europe/
Alright, so what if UK leaves EU, how would this result make an impact on Hong Kong?
According to DailyFX.com,
– The unique setup between China, UK and Hong Kong links all three economies.
– Brexit could hurt Hong Kong investors who hold a large amount of British assets.
– The volatility in Hong Kong shares could spread to the mainland equity market very quickly.
Further reading: http://finance.yahoo.com/news/brexit-risk-threatens-mainland-hong-203400483.html
So how about China?
A possible exit of Britain from the European Union may add barriers to Chinese access to the European continent and add uncertainty to trade and investment talks with the bloc, analysts said. They also said it might push Central and East European countries to seek closer economic ties with China. (SCMP)
Further reading: http://www.scmp.com/news/china/diplomacy-defence/article/1978486/how-will-china-be-affected-if-britain-leaves-european
What will happen if the UK votes for Brexit? Here is a selection of Financial Times news and analysis of the steps after Brexit.
The promise: the UK would seek to leave the EU by 2019 and would be prepared to defy Brussels over immigration laws, according to a leading pro-Brexit minister.
The risk: George Osborne, the chancellor of the exchequer, has warned of a £30bn black hole in public finances if Britain should vote to leave on June 23.
The immediate aftermath: David Cameron would probably face the end of his career as prime minister as EU membership was put aside.
The politics: the political and constitutional questions caused by a vote to leave could open up a period of profound uncertainty for the UK and the EU.
The legal analysis: the referendum is advisory rather than mandatory; what happens next is a matter of politics, not law.
The mechanics: the UK would have two years to negotiate a deal after triggering the exit clause of the EU treaties; extending talks beyond that would require unanimity.
The economics: the professional consensus is clear – leaving the EU would hit growth. The size of that impact would depend on factors such as trade, productivity and foreign direct investment. But champions of Brexit argue that the economy would prosper outside the EU.
Immigration: the record influx of EU nationals has proved a powerful rallying call for the Leave campaign. Some three-quarters of EU citizens working in the UK would not meet current visa requirements for non-EU overseas workers if Britain left the bloc. But such restrictions are likely to apply to new entrants rather than to EU migrants already in the UK.
Trade options: leading Leave campaigners say they would not seek to join the EU’s single market — which requires free movement of labour. Instead they would seek a trade deal with the bloc. Treatment of the service sector, which accounts for 80 per cent of UK gross domestic product, would be a huge issue.
The European response: European leaders have stepped up secret discussions for an EU without Britain, drawing up a plan B focused on closer security and defence co-operation.
Reference & quotes:
The non-Brits guide to Brexit: http://edition.cnn.com/2016/06/20/world/non-brits-guide-to-brexit-explainer-trnd/index.html#question5
The UK in Europe: a visual guide to Brexit: https://ig.ft.com/sites/the-uk-in-europe/
Brexit poll tracker: https://ig.ft.com/sites/brexit-polling/
What will happen if the UK votes for Brexit? http://www.ft.com/cms/s/2/02004966-32e8-11e6-bda0-04585c31b153.html#axzz4CMzt8Yas
How would Brexit affect Asia? http://www.ft.com/fastft/2016/06/13/how-could-brexit-affect-asia/
Brexit Risk Threatens Mainland through Hong Kong on Business, Equities: http://finance.yahoo.com/news/brexit-risk-threatens-mainland-hong-203400483.html
How will China be affected if Britain leaves European Union? http://www.scmp.com/news/china/diplomacy-defence/article/1978486/how-will-china-be-affected-if-britain-leaves-european
Timeline: Britain and Europe http://edition.cnn.com/2016/05/18/europe/eu-referendum-timeline/index.html