Britain and China to hold new round of financial talks in London in June - source

Britain and China will hold the next round of their Economic and Financial Dialogue (EFD) in mid-June in London, a British Treasury source said on Thursday after reports suggested that talks had been delayed by diplomatic tension.

The EFD has been used in the past to announce closer cooperation on trade and banking initiatives, and to sign commercial contracts. The talks were agreed during finance minister Philip Hammond's visit to China to speak at a summit of China's Belt and Road Initiative, championed by President Xi Jinping, which envisions rebuilding the old Silk Road to connect China to Asia and beyond with extensive infrastructure investment.

Relations between London and Beijing have been strained in recent years, most notably after a British warship sailed close to islands claimed by China last August. In that light, Britain will view the agreement of potentially lucrative talks as a success and a step closer to rebuilding the close ties seen earlier in the decade when then-finance minister George Osborne successfully courted Chinese investment.

Earlier on Thursday, Chinese Vice Premier Hu Chunhua expressed regret to Hammond that the South China Sea issue had harmed ties, and that he hoped Britain could "respect China’s core interests and important concerns". (Reporting by William James, Editing by Kylie MacLellan and Elizabeth Piper)