China is said to benefit economically and politically from the UK's exit from the European Union. (Photo : Getty Images)
China is probably one of the few countries who will benefit from “Brexit” or the United Kingdom’s recent exit from the European Union (EU), though some experts warn the country not to be complacent.
The Sydney Morning Herald reported on Monday how China may be the biggest winner in the momentous turnout of votes in the recent EU referendum where Britons voted their nation out of the group.
However, some experts in finance told Bloomberg that the Asian country should be careful and limit its intervention in a bid to change yuan's value internationally for it could mean turbulence in the Chinese economy.
The Big Winner
The SMH pinpointed several casualties in the recent exit of the U.K. from the EU, now dubbed as "Brexit," including the pound, British Prime Minister David Cameron, and even the so-called European integration.
Some Asian countries like South Korea and Japan may also be affected by the pivotal change in the European organization in terms of market volatility.
While China expressed its concerns on the matter as well, per a report from BBC News, the Australian media outlet still believes that it remains the biggest winner in all of this.
According to the outlet, China may feel a little shake in its market in the near future since the EU is its second biggest trading partner, but Brexit presents something positive to the Asian giant in terms of economic and political interests.
"Even a fully united Europe--burdened as it is by debt woes, high costs, overbearing bureaucracy and, in some cases, dubious competitiveness--has had a tough time competing and contending with China. Now fractured, the EU can't help but pose less of a counterweight to China's rise on the world stage," the outlet explained.
SMH recalled that the EU was originally formed to enhance the continent's clout worldwide and be a major player alongside the United States and China.
With the EU divided, China has an even bigger chance at gaining power, both economically and politically, in the long run.
Caution
On the other hand, the Bloomberg report contained a warning from the Asian Infrastructure Investment Bank's Jin Liqun.
"If you try to intervene too much, I think the volatility would be getting worse," Jin told the outlet. "So you should be a little bit more patient, allowing the market to correct itself rather than taking drastic measures to keep the market down, which often backfires."
But like Japan and South Korea, China has already made actions to counter the incoming effects of Brexit and maintain financial stability nationwide, per the People's Bank of China.
