British Prime Minister David Cameron delivers a speech in Peking University during his maiden visit to China in November, 2010. [english.cntv.cn]

On Dec. 5, 2013, Prime Minister David Cameron will lead a delegation of British ministers and business executives to China. When the announcement was first made in early November, it was seen as a sign of warming in bilateral relations, which had been frozen after Cameron's decision to meet the Dalai Lama in May 2012.

During the past year and a half, Cameron has sought to align China better with his administration's "commercial foreign policy." This has been supported in business circles, but criticized among some Western diplomats and human rights advocates. Meanwhile, the bilateral wounds have been healing since the G20 Summit in St Petersburg in last September, when President Xi Jinping invited Cameron to Beijing.

In effect, setting aside the Dalai Lama discomfiture, bilateral relations between London and Beijing have been improving since the onset of the global financial crisis in 2008.

Today, the U.K. is seen as the most open Western economy to Chinese investment, despite London's "special relationship" with Washington. Conversely, London cannot afford to ignore the contribution of Chinese trade and investment in Britain.

Short-term improvement, medium-term challenges

As Cameron has acknowledged, the U.K. can only thrive in the global economy if it can tackle its deficit, invest in infrastructure, commit to a smaller government and open up to new world markets, especially in the large emerging economies. In this view, China is the benchmark test for Cameron, who has promised to forge a relationship that will "benefit both our countries and bring real rewards for our peoples."

The good news is that, in the past few months, Britain has enjoyed a slate of upside developments. Thanks to its close relationship with the United States, Britain has managed to benefit from America's lingering recovery. It has also been propped up by the temporary stabilization of the Eurozone crisis, due to the European Central Bank's (ECB) pledge to defend the euro "by any means necessary."

These two shifts support Britain's efforts to leave behind the stagnation that has haunted the U.K. economy since 2008/9.

The longer-term growth model is a different story. In the past, the U.K.'s growth rested on housing and mortgage-lending, the huge expansion of the financial sector, government services, as well as oil and gas production in North Sea.

With the global crisis, that model has been exhausted. The new growth model is likely to rest on banking that will be less profitable but more resilient, as well as the exploitation of shale energy. However, both will require time.

Currently, Cameron's government is seeking to position the economy in a favorable position, boosting risky assets, especially property, equity and credit. London needs Beijing to overcome its short-term challenges. In turn, Beijing needs London not just for trade and investment, but as a financial gateway to Europe.