London, UK (BBN) – Some of Asia’s biggest economies have expressed concerns over the world’s economic stability as a result of Britain’s vote to leave the EU.
China’s Finance Minister Lou Jiwei said the consequences were unclear, but that they would be felt for years to come, reports BBC.
Both South Korea’s President Park Geun-hye and Japanese Prime Minister Shinzo Abe said their countries were prepared to react to market volatility.
Meanwhile, US Secretary of State John Kerry is due in London on Monday.
He is expected to meet UK Foreign Secretary Philip Hammond on the first high-level face-to-face talks between the two countries since Thursday’s referendum.
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There is fear that the uncertainty created by Britain’s decision will continue to affect financial markets around the world.
Mr Lou, from China, said Brexit would “cast a shadow over the global economy” and that the “repercussions and fallout” would emerge over the next five to 10 years.
However, he added that reaction from stock markets, which fell sharply on Friday, may have been overdone.
“The knee-jerk reaction from the market is probably a bit excessive and needs to calm down and take an objective view,” he said.
Huang Yiping, a member of China’s central bank monetary policy committee, said Brexit could mark a “reversal of globalisation”, which would be “very bad” for the world.
Last year, China was responsible for $3.3bn (£2.4bn) worth of foreign direct investment in Britain, according to law firm Baker & McKenzie.
David Cameron announced £40bn ($54.7bn) worth of deals between Britain and China following a visit to the UK by President Xi Jinping in October last year.
Ready to act
Following the result of the vote, the pound plunged 10% against the dollar to a 31-year low before trimming losses to end the day around 7.5% down.
Sterling also fell 11.4% against the yen. Japan hinted that it may intervene to stem the yen’s strength.
On Friday, the Swiss National Bank acted to weaken the Swiss franc which rose 2.1% against the dollar as investors rushed to buy the currency.
Anand Mahindra, chairman of Mahindra Group, an auto-to-aerospace Indian conglomerate with operations in Britain, said the world was behaving “as if a tsunami wave has hit” which he viewed as an over-reaction.
He said: “My hunch is that you’re going to see a fair amount of recovery in markets worldwide.”
Earlier this year, the Indian company launched the e2o electric car in the UK where it already has a presence with its IT business Tech Mahindra.
Mr Mahindra said Britain’s decision to leave may prove advantageous.
“The last time I spoke to the people in the British government about reducing taxes and duty on electric vehicles, they said they were hampered from doing so because of the European Union protocols and tariffs.
“So I hate to say this but as far as our electric vehicles are concerned this is probably something where I could go back to them and say you know you’re going to have your own discretion to lower the taxes from now on.”
Adi Godrej, chairman of India’s Godrej Group, which operates worldwide and sells beauty brands such as Soft & Gentle and Bio-Oil in Britain, was less sanguine than Mr Mahindra.
He said it was surprising the UK had taken a decision “which is going to be so negative for it from an economic point of view”.
He added that it would affect Indian companies which had set up in Britain as a gateway to the EU.
“It will be bad because they will have to establish themselves in other parts of Europe.”