China’s Commerce Ministry confirmed the good news today after talks with British trade minister Liam Fox.
It has been heavily supported by Eurosceptic MPs that Britain will benefit from securing trade deals in a post-Brexit world.
Britain has pushed a strong message to Chinese companies that it will be open for business after leaving the EU in March 2019 and that China is one of the countries it wants to sign a free trade deal with.
As tensions of a trade war have continued to escalate between the US and China, the Prime Minister has seen this as an opportunity to boost Britain’s Brexit ambitions.
In June Philip Hammond went to China to start talks on such a deal.
Writing in Chinese financial magazine Caixin Mr Hammond signalled what he called “globalised Britain’s” support for free trade.
He said: “During this visit to China, I will meet with Chinese leaders in order to clearly convey a message to the outside world – as a firm supporter of trade liberalisation and a free market, the United Kingdom is China’s long-term trusted partner.
“Britain is committed to promoting free and open trade, and as Britain and its European cooperation partners form a new relationship, we will deepen our relations with other regions around the world.”
On Friday Chinese Commerce Minister Zhong Shan in Beijing said the two countries discussed how to boost investment and expand trade in services.
He added without giving details that the two countries also agreed to “actively explore the possibility of discussing a top notch free trade agreement between the two sides after Brexit”.
Formal talks cannot begin until the UK officially leaves the EU, but this step could give the UK added confidence and leverage in negotiations with the EU.
Free trade talks also typically take years to conclude.
Mr Zhong also said he hoped that Britain would use the opportunity of a major import fair in November in Shanghai, which President Xi Jinping is overseeing, to expand its exports to China.
Mr Fox will lead Britain’s delegation in November to the import fair along with Prince Andrew.
Mr Fox said his goal is to boost exports to 35 percent of gross domestic product after leaving the EU.
Earlier this week, Britain’s dairy industry gained a multimillion pound boost yesterday when a landmark deal was signed with China to accept more UK products.
The superpower has approved imports including cream, yogurt and milk powder which are made in the UK but use milk from other countries.
The agreement, which is worth an estimated £240million over five years for the UK dairy industry, was formally sealed by International Trade Secretary Liam Fox at a meeting of the UKChina Joint Economic and Trade Commission in Beijing.
Dr Fox said: “This is my fourth visit to China this year and I’m delighted to see the completion of this deal, bringing significant benefits to dairy producers across the UK at a time when British food and drink exports are at a record high.”