Big companies 'restless' because of Brexit

(Baonghean) - Today (June 23), the UK will hold a historic referendum on whether to stay or leave the European Union. Not only causing chaos in the UK and European political and social arenas, the keyword “Brexit” (the UK and the European Union) is also a top concern for big powers like Russia, the US and China.

Fear of economic downturn

During the time the European Union was struggling with the UK referendum, public opinion witnessed Russia's silence and caution in every statement related to Brexit. Only in a recent speech at the St. Petersburg International Economic Forum in Russia, President Putin commented: "This is the British business, not ours." Previously, many Russian officials also said that Russia would not be affected if Britain left the European Union.

President Putin's Russia will be greatly affected if Brexit happens in the UK. Photo: DailyBeast

However, the reality does not seem to be like that. It can be said that although the direct trade relationship between the UK and Russia has not been affected too much, due to the recent restrictions imposed by the European embargo on Russia. However, the indirect effects are not small. Because Russia is currently the third largest trading partner of the EU, and the EU is Russia's largest trading partner. An economic shock to the EU when the UK leaves will certainly have a significant impact on cooperation with Russia.

Meanwhile, London is a financial center where shares of many leading Russian companies are traded daily, such as Gazprom, Rosneft, Lukoil or Sberbank... According to economists, the Brexit scenario will especially negatively affect Russia's economic cooperation with economies in the European Union, such as the Netherlands or the Republic of Cyprus. In addition, Brexit will also negatively impact gold and foreign currency reserves in Russia when the euro depreciates. In addition, if the Brexit scenario occurs, the idea of ​​the Eurasian Economic Union that President Putin cherishes will be more or less affected.

If Russia is affected, the US will also be affected. The US is currently the UK's largest trading partner, while the UK is the US's seventh largest trading partner. 27% of US investment in Europe now goes through the UK. Like Russia, US companies are attracted by the UK's low tax rates and business-friendly environment, as well as access to the European single market. Therefore, if the UK economy falters, cooperation with the US will also be negatively affected.

As a close ally, US President Barack Obama has always called on Britain to stay in the EU. Photo: Reuters

The Chair of the US Federal Reserve (FED), Janet Yellen, said that the FED's recent decision not to raise interest rates also stemmed from the Brexit issue. Not only that, once the UK leaves the European Union, the future of the US-EU Trade Agreement, also known as the Transatlantic Trade and Investment Agreement (TTIP), will be even more distant and difficult to become a reality.

Meanwhile, another giant, China, seems to be less mentioned in the Brexit news. However, it is undeniable that the EU is currently China’s most important trading partner. The total value of two-way trade reached 520 billion USD last year. In addition, in 2015, the UK also welcomed a series of Chinese investment projects worth billions of dollars.

It can be said that the UK is an important gateway for China to enter the European market. Therefore, once the UK is no longer a member of the EU, economic and trade cooperation between China and the EU and the UK and China will also face difficulties. On a larger scale, the gateway to the European market with more than 500 million people of China will also be narrowed.

Geopolitical calculations are affected.

Not only will it have a negative impact on economic cooperation, the Brexit scenario, if it happens, will also adversely affect the strategic goals that Russia, the US and China have been implementing so far.

As for Russia, there are also opinions that Russia has some advantages when Britain leaves the EU. For example, the UK has always been a country that has made tough statements towards this country regarding the Ukraine crisis. Therefore, if Britain leaves the EU, this alliance may soften its tone towards Russia. Along with that, once America's closest ally is no longer in the EU, the ties with Washington will no longer be so tight. And that, Russia-Europe relations may improve.

As for the US, its leaders have repeatedly expressed concern about the possibility of Britain leaving the EU. What worries the US the most is that once its close ally Britain is no longer in the EU, it will be difficult for Washington to maintain its role and influence in Europe. Because relations with its ally Britain are not enough. For example, the sanctions against Russia and Iran by Europe, from the US's perspective, have received significant support from London.

Chinese President Xi Jinping (left) and British Prime Minister David Cameron during his visit to the UK in 2015. The visit, which included many important cooperations, strengthened UK-China relations and opened the door to the EU for China. Source: Getty Image

As for China, although not mentioned much, it can be said that Beijing is looking to Europe in the face of new pressure from the US and Japan in Asia. Expanding cooperation and shaping a new role in Europe through the UK is the goal that Beijing is aiming for.

This move is also aimed at gradually strengthening the country's plan to build a 21st century Silk Road. In addition, the UK is not only a stepping stone for China to move towards Europe but also globally. Because Beijing has always considered the UK as the best stepping stone for the internationalization of the yuan.

With all these huge impacts and influences, it is understandable that Russia, the US and China have shown their interest in the UK's Brexit issue in many ways recently. At the moment, everyone is anxiously waiting for the final decision of the British voters today - June 23.

Phuong Hoa