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Reeves says budget 'non-negotiable', defends China trip

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Seeks 'pragmatic and predictable' relations with Beijing

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Says not following other nations on car tariffs

(Recasts with comments from Reeves on meeting fiscal rules)

By Laurie Chen and Andy Bruce

BEIJING, Jan 11 (Reuters) - British finance minister

Rachel Reeves, facing criticism for travelling to China during

financial market turmoil at home, said on Saturday she will act

to ensure the government's fiscal rules are met.

Under pressure from a sharp rise in British interest rates,

Reeves defended her budget at the start of the two-day visit to

China, where she is seeking to revive high-level economic and

financial talks that have been frozen for nearly six years.

"Those fiscal rules that I set out in the budget in October

are non-negotiable and we will take actions to ensure that we

meet those fiscal rules," Reeves told reporters after meeting

with Vice Premier He Lifeng.

The rise in British government borrowing costs, due in part

to a global bond selloff, prompted comparisons with the 2022

"mini-budget" crisis that forced then-Prime Minister Liz Truss

out of Downing Street.

However, this week's market moves have been less sharp and

there has so far been no evidence of the strain on institutional

investors that forced the Bank of England into emergency bond

purchases in 2022.

Reeves, criticised by the opposition Conservative Party for

going to China during a period of turmoil in bond markets, said

she would not give a running commentary on the moves.

Asked if she would announce measures to rebuild buffers

against the fiscal rules in her March 26 economic update, Reeves

said: "I committed just to have one budget a year and that

budget will be in the autumn."

Economic growth remained the government's top priority,

Reeves said.

Agreements reached with China this weekend, including

commitments to deepen financial services trade and expand

agri-food exports, are worth 600 million pounds ($732 million)

over the next five years for the British economy, Reeves said.

Asked earlier during a visit to a Brompton bicycle shop

whether Britain would follow Washington and Brussels in imposing

tariffs on Chinese electric vehicles, Reeves, who will be in

Shanghai on Sunday, said: "We keep issues under review but we

make decisions in our national interest."

British car manufacturers "like Jaguar Land Rover, export

substantially to Chinese markets, and we want to help them to

grow," she said.

After her bicycle shop visit, Reeves met Vice President Han

Zheng, telling him it was "important to have open and frank

dialogue in areas where we agree, but also in areas where we

have different views".

'COMMON GROUND'

Her delegation, which includes Bank of England Governor

Andrew Bailey, Standard Chartered ( SCBFF ) Chairman Jose Vinals,

and HSBC ( HSBC ) Chairman Mark Tucker, then met Chinese

counterparts led by Vice Premier He Lifeng.

He urged British financial firms to expand renminbi services

and promote deeper yuan internationalisation, while

inviting them to participate in green finance and the pension

industry in China.

Reeves said she looked forward to China issuing its first

overseas sovereign green bond in London this year.

Her visit follows a dialogue opened last year between Prime

Minister Keir Starmer and President Xi Jinping, the first

between the two countries' leaders since 2018.

Reeves told He that Russia's invasion of Ukraine, rising

geopolitical tensions and climate change meant that the

environment was more challenging than when their predecessors

last met.

"It is important to prevent economic leaps weakening our

national security and economic resilience," she said, adding

both she and He wanted to "find common ground" in this regard.

He said Beijing will work with London to ensure a fair,

non-discriminatory business environment for each country's

firms.

The approach adopted by Starmer's Labour government, elected

in July, contrasts with that of the previous Conservative

administration, which took a robust stance on differences with

China - particularly over human rights, Hong Kong and

allegations of Chinese espionage.

U.S. President-elect Donald Trump's threat to impose tariffs

on all imports could complicate Starmer's goal of rebuilding

relations with China.

China is Britain's fourth-largest trading partner,

accounting for trade worth almost 113 billion pounds ($138

billion).

($1 = 0.8162 pound)