UK firms facing Brexit fears in China

China’s stock market has hit a fresh record low and its biggest firms are facing Brexit worries in the world’s biggest economy.

Key points:UK firms could face a trade war with China over its access to the bloc’s single marketChina wants Britain to stay in the EU after Brexit talks have stalledThe Chinese stock market fell 0.7% on Friday to $1,225.45 a shareThe Dow Jones Industrial Average fell 0:56.21, or 0.6%, to 23,818.13, the S&P 500 lost 0.3% to 2,932.37 and the Nasdaq composite fell 0-2.17% to 5,093.13.

“We think that, in the short term, the uncertainty of the UK’s withdrawal from the European Union will be very negative for UK companies,” said Jim Prentice, chief economist at UBS.

He said: “There will be a huge amount of disruption in trade, particularly in sectors that are critical to the UK economy.”

The pound fell to a three-week low against the dollar after Britain voted to leave the European single market.

The pound has been hit hard by Brexit, with its main trading partner, the US, cutting its trade surplus with Britain by around $7 billion a day.

It is expected to be the biggest trade loss for Britain, according to estimates by consultancy KPMG, and the biggest since the financial crisis of 2008-09.

“It is quite significant,” said Prentice.

“The sterling will have to go up against the Chinese dollar, which has fallen sharply in recent weeks, in order for the UK to maintain its trade position with the EU.”UK-China trade is a crucial element of Britain’s economy and underpinned its decision to leave.

A British government report on Brexit, due to be published next month, has said the UK would not be able to maintain a trade relationship with China after the UK left the EU, but said the two sides would continue to negotiate for a trade deal.

The report said Britain would be able “to maintain a level of trade with China of around $50bn per annum” with an “unlimited number of trade deals”.

It said it would “continue to seek trade arrangements that are in the interests of the British people and that promote British industry”.

But the British Chambers of Commerce and Industry said the government report “does not provide any clear indication of how such arrangements would be concluded”.

China’s central bank said it expected a “very negative” impact from Brexit on its economy.

A spokesman said: ‘A decision of this magnitude would result in a massive loss of confidence in the Chinese economy and the economy of the EU and would be detrimental to the Chinese market.”‘

We’re very worried’China’s economy is the third largest in the G7 after the United States and the United Kingdom.

China’s stock markets have been hit by a spate of sharp falls and are down almost 9% this year.

China is already heavily reliant on imports from the United Nations and other countries, with more than 70% of its foreign exchange reserves.