UK break from EU may hurt China trade

China will remain an important partner to Britain and the European Union but will definitely feel the pinch if Britons choose to withdraw from the bloc in a referendum promised by British Prime Minister David Cameron on Wednesday, analysts said.

In a long-awaited speech, Cameron offered the British people a straight "in-out" referendum choice on whether to stay in the EU or leave, if his party wins the next election, expected in 2015. The referendum would take place sometime between 2015 and 2018.

Cameron said Britain did not want to pull up the drawbridge and retreat from the world, but that public disillusionment with the EU was at "an all-time high". He promised to renegotiate Britain's EU membership.

"If we left the EU, it would be a one-way ticket, not a return. So we will have time for a proper, reasoned debate. At the end of that debate, you, the British people, will decide," said the Conservative chief, shrugging off warnings that this could imperil Britain's diplomatic and economic prospects and alienate its allies.

The decision would hamper the EU's recovery from the debt crisis and discourage worldwide regional integration, said Ding Chun, a Jean Monnet chair and director of the Europe Research Center at Fudan University.

China has been directly affected by the EU crisis that erupted some years ago, said Ding. "If the eurozone area meets more turmoil during its difficult recovery, China is likely to see increasing protectionism and export pressure when doing business with it."

China is now the EU's second-biggest trading partner behind the United States, and the 27-member bloc is China's biggest trading partner.

On the other hand, China-Britain trade, especially in the sector of technology cooperation, may be boosted if Britain's departure finally materializes, experts said.

"Without trade regulations and the single market of the EU, Britain will be more open to China's huge market," Ding said.

London always values the Chinese market, and Britain was the only country among China's major trade partners in the EU that garnered a positive growth in trade with China last year, said Zhao Junjie, a specialist on European studies at the Chinese Academy of Social Sciences.

Bilateral trade reached $63.1 billion in 2012, surging 7.5 percent compared with the previous year amid the global recession.

Yet the referendum proposal, influenced by downward economic trends in Britain, underscores the decline in international status and the conservative-leaning tendencies of the world's sixth-biggest economy, said Zhao.

"While many in the UK —within both the Conservative Party and the Labour Party — would like to renegotiate the terms of the UK's relationship with the EU, there are not many who see the need for an 'in-out' referendum, which is what Cameron is proposing," said Richard Caplan, professor of International Relations at the University of Oxford.

"Cameron's commitment to a referendum risks generating uncertainty about the UK's commitment to Europe more broadly, which could discourage investment in the country at a time when the country is struggling to recover economically," Caplan said.

Instead of providing an instant vote, Cameron may use such a long window to bargain with the EU for a bigger share of influence in the bloc's reform process, which is currently dominated by Germany and France, or a looser version of full British membership, analysts added.

Speculation over a vote on leaving the EU rattled other members of the bloc currently focused on tackling their economic woes.

Martin Schulz, speaker of the European Parliament, said: "We need the UK as a full-fledged member, not harboring in the port of Dover. The UK can shape the EU by working with its partners."

German Foreign Minister Guido Westerwelle on Wednesday urged the UK to remain in the EU, saying in an age of globalization, all Europeans are in the same boat.

Laurent Fabius, French foreign minister, said leaving the EU could be "dangerous" for Britain. "I'll take an example which our British friends will understand. Let's imagine Europe is a football club and you join, but once you are in it you can't say, 'Let's play rugby'", Fabius said.