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Rachel Reeves vowed to act if her fiscal plans were thrown off course by the gilt market turmoil, as she announced a deal with China intended to boost Britain’s faltering economy.

The UK chancellor, speaking in Beijing on Saturday, insisted he would meet his fiscal rules under pressure afterwards. UK 10 year borrowing costs last week rose to the highest level since the global financial crisis.

“Those fiscal rules that I laid out in the October Budget are non-negotiable and we will take actions to ensure that we meet those fiscal rules,” he told reporters.

Reeves indicated spending cuts would be necessary if the £9bn headroom in his fiscal rule – that day-to-day spending is covered by tax receipts – is wiped out by rising borrowing costs.

The crunch point will come on March 26 when the Office for Budget Responsibility publishes new forecasts. Reeves has signaled he will not introduce a tax at that point – a move normally reserved for a Budget.

He said: “I am committed to having only one Budget a year and that Budget will be in the autumn.”

The UK chancellor said “re-engagement with China” would deliver up to £1bn of value for the UK economy as he defended his budget plans.

He met with his counterpart Vice-Premier He Lifeng to hammer out a deal that included an agreement to expand financial access for UK companies and remove trade barriers to exports to UK agriculture to China.

He said: “China has opened its doors, and it will only open wider to give the UK and other countries more opportunities to develop.”

Reeves said: “Growth is the number one mission of this Labor government. It is to achieve growth that I am in China this week.”

Labor has launched a charm offensive to improve relations with China after a turbulent last few years under the Conservative government. Bilateral relations thawed after Prime Minister Keir Starmer and President Xi Jinping met on the sidelines of the G20 Summit in Brazil in November.

Reeves’ trip was overshadowed by a selloff in bond markets this week that pushed Britain’s borrowing costs to their highest levels since the 2008 financial crash.

Investors are increasingly worried about the government debt, the threat of stagflation and price pressures. Conservatives and Liberal Democrats said he should cancel his trip to Beijing.

The positive change in relations with China contrasts with strained relations with the Tories. Until the end of the term, London and Beijing were “almost on speaking terms”, said Kerry Brown, Director of the Lau China Institute at King’s College.

Beijing was shocked when former prime minister Rishi Sunak labeled China the “biggest state-based threat” to the UK’s economic security. Sunak highlighted alleged state-sponsored cyber security attacks and criticized China’s authoritarianism at home and assertiveness abroad.

“Labour is trying to get back to Britain’s default position on China – a relationship without much warmth or intimacy, but pragmatic and balanced,” Brown said.

HSBC Chair Mark Tucker, who co-chaired the summit, said the two sides are “working on ways to achieve and encourage cross-border investment in renewable energy generation and storage and new energy transport solutions where we can learn a lot from each other”.

Several leading Chinese renewable energy companies and electric vehicle suppliers are preparing to invest in the UK, waiting for an improvement in geopolitical ties before proceeding, according to people familiar with the matter. this thing.

Reeves said reforms to UK listing rules would make it easier for Chinese companies to list in London. The City of London is courting foreign companies to list on the London Stock Exchange following an exodus of companies moving their listings overseas or going private.

The agreement is short on detail on how it will achieve £1bn growth for the UK. Both sides agreed that China will issue its first overseas sovereign green bond in London this year as the capital positions itself as a center for green finance. In 2016, China issued China’s first sovereign bond outside of London in the “Golden Era” of UK-China relations during David Cameron’s leadership.

Fast fashion company Shein has filed confidential papers to list in London after being turned down by US regulators. It is waiting for approval from the UK and Chinese authorities before proceeding with an initial public offering with a projected market valuation of £50bn.

The delegation included Andrew Bailey, the governor of the Bank of England, Nikhil Rathi, the chief executive of the Financial Conduct Authority, the chief executive of Schroders Richard Oldfield and José Viñals, the chair of Standard Chartered.

Reeves’ trip comes as parliament awaits the outcome of Labour’s UK-China audit, which will review the state of bilateral relations and is expected to make recommendations on how to deal with China.

Sam Hogg, an expert at the Oxford China Policy Lab, said the audit was “likely to be a tick box exercise”.