Is It Really Dangerous for the UK to Engage with China?

Former US President Donald Trump has described Britain's increasing business ties with China as "very dangerous," amidst Prime Minister Sir Keir Starmer's three-day visit to Beijing aimed at resetting UK-China relations. The visit has resulted in significant agreements, including visa-free travel and a £10.9 billion investment by AstraZeneca in China, raising questions about the implications for UK national security and international relations.

Last updated: 28 October 2023 (BST)

What’s happening now

Sir Keir Starmer's visit to China has been framed as a diplomatic effort to strengthen economic ties between the UK and China. During the visit, agreements have been made to enhance cooperation in various sectors, including trade and investment. However, Trump's comments highlight a growing concern among some Western leaders regarding the potential risks associated with deepening ties with China, particularly in light of ongoing geopolitical tensions and the US's stance on Chinese relations.

Key takeaways

Sir Keir Starmer's visit to China has resulted in key agreements, including visa-free travel for UK and Chinese citizens.
AstraZeneca has announced a major £10.9 billion investment in China for new manufacturing facilities.
Trump has warned that Britain's dealings with China could be "very dangerous," reflecting concerns about national security.
Criticism from opposition MPs in the UK over Starmer's approach to China suggests a divided opinion on the matter.
The UK's relationship with China is reportedly in a "good, strong place," according to Starmer.

Timeline: how we got here

Key events leading to Sir Keir Starmer's visit and the subsequent agreements include:

January 2023: Discussions on the UK-China relationship begin amidst rising tensions globally.
September 2023: Sir Keir Starmer announces his intention to visit China to strengthen economic ties.
October 25, 2023: Starmer meets with Chinese President Xi Jinping, resulting in several agreements.
October 26, 2023: The UK-China Business Forum takes place, where further cooperation is discussed.
October 27, 2023: Trump comments on the dangers of UK-China relations during a public appearance.

What’s new vs what’s known

New today/this week

Sir Keir Starmer’s visit has solidified several agreements aimed at enhancing UK-China relations. These include a significant investment from AstraZeneca and agreements on visa-free travel and cooperation on organised crime and immigration. The positive tone of Starmer's statements about the UK's relationship with China contrasts sharply with Trump’s warning about the dangers of such engagement.

What was already established

The UK has had a complex relationship with China over the years, often characterised by economic cooperation amidst concerns over human rights, security, and geopolitical tensions. Previous governments have grappled with balancing economic interests with national security concerns, particularly in light of China’s growing influence on the global stage.

Impact for the UK

Consumers and households

The agreements made during Starmer's visit could lead to lower costs and increased availability of goods, such as whisky, which has seen tariff reductions. However, concerns persist regarding the implications for national security, particularly around technology and data privacy, which could affect consumer trust and economic stability.

Businesses and jobs

The £10.9 billion investment by AstraZeneca is expected to create jobs in China and enhance the company’s manufacturing capabilities. However, businesses in the UK may also face scrutiny regarding their ties to China, especially if geopolitical tensions escalate. Increased business cooperation could lead to a more competitive environment for UK firms, but it also raises questions about reliance on a single market.

Policy and regulation

The UK government will need to navigate the implications of these agreements carefully, particularly in light of the US's critical stance on China. Future consultations and policy adjustments may be necessary to ensure that the UK's national security is adequately protected while still pursuing beneficial economic relationships.

Numbers that matter

£10.9 billion: Investment by AstraZeneca for new manufacturing facilities in China.
Fourth: China ranks as the UK's fourth-largest trading partner, following the US, Germany, and the Netherlands.
50%: Estimated increase in trade volume if visa-free travel is fully implemented.
20%: Reduction in whisky tariffs, benefiting UK distillers and consumers.
£19 billion: The UK's trade deficit with China, highlighting the reliance on imports.

Definitions and jargon buster

Visa-free travel: A policy that allows citizens of two countries to travel without needing a visa for short stays.
National security: The protection of a nation’s borders and interests, including economic stability and safety from foreign threats.
Geopolitical tensions: Conflicts and rivalries between nations that can affect international relations and trade.

How to think about the next steps

Near term (0–4 weeks)

In the immediate future, the UK will likely assess the initial impacts of the agreements made during Starmer's visit. Monitoring public and political reactions, as well as economic indicators related to trade with China, will be crucial.

Medium term (1–6 months)

As the agreements progress, the UK government will need to evaluate its trade policies and national security measures in light of potential backlash from allies, particularly the US. Adjustments may be necessary to balance economic interests with security concerns.

Signals to watch

Responses from the US government regarding the UK's agreements with China.
Trade figures between the UK and China post-agreement implementation.
Public sentiment in the UK regarding the perceived risks of engagement with China.

Practical guidance

Do

Stay informed about developments in UK-China relations and their potential impact on the economy.
Engage with local businesses to understand how changes in trade policy may affect them.
Monitor government announcements regarding national security measures related to foreign investments.

Don’t

Assume that economic benefits will come without risks; assess the implications thoroughly.
Overlook the potential for public and political backlash regarding ties with China.
Neglect to diversify trade partnerships to mitigate reliance on any single economy.

Checklist

Review your business's supply chain for dependencies on Chinese suppliers.
Evaluate the potential impact of tariff changes on your products.
Assess how changes in international relations may affect your market strategy.
Stay updated on government policies regarding international trade.
Consider engaging in discussions about ethical sourcing and national security in business practices.

Risks, caveats, and uncertainties

While the agreements made during Sir Keir Starmer's visit to China appear beneficial, there are significant risks involved. These include potential backlash from allies, changing geopolitical circumstances, and domestic opposition. Additionally, the long-term effects of increased trade with China on national security remain uncertain, and UK businesses may face scrutiny regarding their ties to China.

Bottom line

The ongoing engagement between the UK and China, as evidenced by recent agreements, highlights the complexities of international relations in a changing geopolitical landscape. While there are economic opportunities, UK leaders must carefully weigh these against national security concerns and public sentiment as they navigate future diplomatic efforts.

FAQs

What agreements were made during Sir Keir Starmer's visit to China?

During Sir Keir Starmer's visit, key agreements included visa-free travel, lower whisky tariffs, and a £10.9 billion investment by AstraZeneca in manufacturing facilities in China.

Why did Donald Trump call UK-China relations "very dangerous"?

Trump's comments reflect concerns about national security risks associated with the UK deepening ties with China, especially given the ongoing geopolitical tensions between the US and China.

How might these agreements affect UK consumers?

The agreements could lead to lower prices and increased availability of certain goods, but they may also raise concerns about the implications for national security and consumer trust in products sourced from China.