The United Kingdom's surprising leave from the European Union (EU), more popularly known as the "Brexit," has a clear effect on China's economy as the world continues to monitor the expected "domino effect" of the incident.
Tackling the effects of the Brexit and China's economic slowdown on the Bitcoin prices, Coin Desk cited economists who suggested that the Chinese economy is expected to falter primarily because of the Brexit.
Meanwhile, other experts note that the "Brexit Britain" is expected to strike a deal with China in terms of free trade now that they are free of restrictions from the European Union.
Brexit's Effects on China
Talking to Coin Desk, Avalon Advisors LLC senior economist and portfolio strategist Sam Rines said that the Brexit poses "a tremendous risk to the Chinese economy" since the Middle Kingdom has significant trade relationships with both Brexit Britain and the EU.
Rines and West Virginia University international business professor Usha Haley both noted that the Brexit may not be good for China's escalating problem in corporate debt.
"China has about $2.4tn of corporate debt at risk of default, leading to a very worrisome global financial future," Haley said, while Rines noted that should the Brexit slowdown EU economy, it would definitely mean nothing good for China.
Haley further noted that with the Brexit, China has lost its biggest supporter of free trade within the EU which can affect its economy considering the domino effect.
"In broader economic terms, with Brexit, China has lost a strong supporter for its free-market status within the EU," she explained. "Chinese investments in the U.K. made to access the single European market look less attractive and some foreign investment will be put on hold."
Britain's Free Trade with China
Meanwhile, Chinese Academy of International Trade and Economic Cooperation's Xing Houyan told Express U.K. that the Brexit would definitely force China and the U.K. to "make a trade treaty."
Former Waitrose executive Lord Price noted that such treaty could "create a second Elizabethan golden age."
"The first Golden Age was based on peace, prosperity, new trading markets and a flourishing of the arts," he added. "There's also a prospect for striking new deals with Canada, New Zealand and Australia, which could form the beginning of a Commonwealth trading pact."
Talking to the attendees of the Hong Kong chamber of commerce, Price also recalled the long-running trade relationship between the Eastern and Western nations.
"And to the opportunities in the East, where for centuries British merchants have traded with China for tea, white gold and porcelain, as well as with Japan, South Korea and other Asian nations," he said.