OPINION – Pragmatic move in UK’s relations with China and its implications

The three-day visit of UK Prime Minister Keir Starmer to China has marked not only a pragmatic return in British foreign policy toward China after eight years of frosty relations, but also the attempt by the UK to steer a middle-of-the-road approach to dealing with its trade and business relations with China amid an increasingly hegemonic US foreign policy. As the closest partner of the US, the UK’s policy shift toward China has important geopolitical implications.

Sonny Shiu-Hing Lo*

Starmer brought with him a 60-member delegation, reaching billions of pounds’ worth of exports and investment deals for the UK. Specifically, China has agreed to cut tariffs on whisky from 10 per cent to 5 per cent – an estimate of £250 million profits to the UK economy in the coming five years. China is the tenth largest market for Scottish whisky, and as such, the tariff adjustment will tremendously help Scottish distillers to compete in the international market.

On the other hand, the Chinese entertainment brand, namely Pop Mart, which produces the popular toy Labubu, has agreed to establish London as its European hub, and which will open twenty-seven stores in the coming year – a move that will create at least 150 jobs in the UK. The Chinese Chery Commercial Vehicles confirms its move to open a headquarters in Liverpool. The Chinese company’s Chief Executive Officer, Yin Tongyue, said that he is committed to supporting the creation of jobs in the UK and the revival of the green supply chain in the UK.

The rapprochement of Sino-UK relations can also be seen in the energy sector, where HiTHIUM agrees to invest in energy storage in the UK. The company also aims at bringing about £200 million of investment in the UK and creating almost 300 jobs, building up its sovereign capability, and making the local economy and energy sector stronger.

At present, China remains the UK’s third largest trading partner, supporting 370,000 British jobs. As such, the deepening relations between the two countries create a win-win situation, especially for the UK where its economy has not been performing well since Brexit in 2016. No wonder Starmer said: “We are bringing stability, clarity and a long-term strategy to how we engage with China, so we can bring home the benefits for businesses and for working people.” Engaging with China is necessary to boost the UK economy. As he admitted openly: “Engaging with China is how we secure growth for British businesses, support good jobs at home, and protect our national security” (UK government press release, 30 January 2026).

Peter Kyle, the Secretary for Business and Trade, also said that the UK delegation “will leave China having put our relationship with one of the world’s biggest economies on a stronger footing, unlocking billions for the UK, and setting the course for new commercial partnerships.”

Bike manufacturer Brompton is going to export its products to China, reaching £111.5 million in the coming three years after its Chief Executive Officer’s visit to Beijing. The World Snooker Tour, which has a global audience of 1.8 billion, has a new event in two Chinese cities that will be worth £15 million in the coming five years. Given the large Chinese market for the British sport sector, the potential for further bilateral development and business in sports is huge.

The most recent visit by Starmer and his business delegation to China has become a testimony to the necessity of those pro-US European states to rethink how they should treat China in a more economically pragmatic, less ideological, and more diplomatically productive way than before

In the area of health, Cultech – a Welsh manufacturer – will cooperate with China Resources to generate more exports and create new jobs at Port Talbot, while Birmingham Biotech is hoping for £20 million in sales of its innovative and drug-free health products in the large Chinese market.

In 2025, Glasgow Prestwick Airport opened three direct cargo routes to China, reaching £76 million in new business and creating 250 jobs in 2026. Such expansion will also support the exports of Scottish salmon and seafood. At the same time, Asymchem has expanded its research operation in life sciences, while pharmaceutical giant AstraZeneca invests in its research programme in China with a commitment of £15 billion and the creation of 10,000 jobs across Cambridge, Macclesfield, Speke, Luton and London.

When President Xi Jinping met Starmer on 29th, he said that the UK and China are permanent members of the UN, and as such, both countries should safeguard peace and security and strengthen dialogue and cooperation. He also said that trust is the foundation of state-to-state relations, adding that China is committed to pursuing peaceful development. China, according to President Xi, has never started a war and has never taken an inch of foreign land. The message of President Xi to Starmer was and is clear: the so-called “China threat” was and is a myth.

President Xi also told Starmer that China is keen to pursue multilateralism and economic globalisation – a strong message implying that the UK’s close partner, the US, was and is pursuing isolationism and economic protectionism.

KIN CHEUNG / POOL / AFP

During the visit to Shanghai, a Memorandum of Understanding between the China-Business Council and Suzhou of Jiangsu province was reached, expanding the establishment of start-up companies in China. Agreements were also signed between the UK and China on various businesses, ranging from luxury fashion brand Burberry to food and drink exporter Diageo, and from health food company Holland and Barrett to Jaguar Land Rover. Many other British business representatives went to China with Starmer, including the Chief Executive Officers of HSBC, Standard Chartered, Schroders, Octopus Energy and Pearson. The role of the UK-China Joint Economic and Trade Commission will be strengthened, with ministerial-level meetings to be held for both sides to propel their bilateral trade forward in the coming years.

Chinese Premier Li Qiang said that China is willing to work with the UK government to create a good business environment for closer cooperation and people-to-people exchange. He appealed to entrepreneurs and people from all walks of life to contribute more to the development of Sino-UK bilateral relations.

In fact, the London Stock Exchange and the Industrial and Commercial Bank of China have signed an agreement to consolidate their operation across global financial markets, data analytics, cross-border yuan transactions, and the development of sustainable finance and financial innovation.

Ashley Alder, the chairman of the UK’s Financial Conduct Authority, met officials of the China Securities Regulatory Commission and the National Financial Regulatory Administration to discuss measures for strengthening cross-border trade and stock connections between the UK on the one hand, and Shanghai and Shenzhen on the other.

Like Canada, which sees China as a rising power that deserves closer engagement rather than ideological discrimination, UK foreign policy toward China has become far more economically pragmatic and less ideologically rigid than ever before

The Chinese side is exploring whether a framework may be created, like the Greater Bay Area’s wealth management connect scheme in 2021, to allow mainland Chinese investors to have access to UK-based asset management and retirement products. If this plan can be realised, cross-border wealth management products and investment will achieve a breakthrough, especially as the ageing population in China may be interested in exploring retirement provisions in the UK.

Discussions were also held on how to improve the London–Shanghai and London–Shenzhen stock connect framework, which was introduced in 2019 to allow and support cross-border listings through depository receipt mechanisms (South China Morning Post, 31 January 2026). At present, six Chinese firms are listed on the London Stock Exchange and both the UK and Chinese sides are exploring whether the number of stocks will expand and what measures should be taken to attract more trading. Cross-border data sharing has also been discussed for the sake of enhancing governmental capability to supervise the emerging cross-border stock market more effectively.

The recent rapprochement in UK–China relations is geopolitically significant.

First, while UK–China relations were at an apex in 2015, when President Xi Jinping visited London, relations between the two sides were later affected by the 2019 turbulence in Hong Kong and, most importantly, the perception of the so-called China threat in the UK. The deterioration in UK–China relations was unfortunate at a time when political ideologies were dominant over pragmatic considerations. Although Starmer, in his three-day visit to China, did raise the issue of human rights to the Chinese side, the emphasis on UK engagement with China has already sent a positive message and provided a favourable environment for the British side to raise such politically and ideologically sensitive matters to the Chinese hosts on the negotiating table.

Second, at a time when the US under President Trump flexed its military muscle worldwide and showed its ability to utilise tariffs as punitive trade weapons, the UK delegation led by Starmer has shown its tendency to drift toward economic pragmatism over ideological struggles, and to stress the importance of cordial diplomacy over megaphone diplomacy. As such, the deals and agreements reached by the UK and Chinese side appear to be very productive, marking a return of a more harmonious and cordial relationship between London and Beijing eight years after 2018.

Third, Starmer’s approach to dealing with China has appeared to be affected by Canadian Prime Minister Mark Carney’s determination to reduce Canada’s economic dependency on the US on the one hand, and to reengage China assertively on the other. Geographically, the UK is not located in either the front yard or backyard of the US. As such, the UK could be bolder in its rapprochement with China. Nevertheless, Starmer and his subordinates and advisers are aware of the perception of the “China threat” in some sectors of UK politics, especially those on the far right and conservative sides.

The pragmatic business direction of both the UK and China is the right one, instead of pursuing the paths of hegemonism, isolationism, economic protectionism and megaphone diplomacy with the utilisation of tariffs as threats from time to time

Therefore, Starmer’s approach to coping with China is to reach pragmatic business agreements without creating an overt impression that his government is opening the door to the so-called “China threat.” In fact, the UK government had already shown its goodwill to China by supporting the construction of the Chinese super-embassy in London just days before Starmer’s visit. The UK leadership has also shown its sensitivity to the Taiwan issue, repeating its one-China policy rather than taking any risks to alienate the mainland Chinese leadership.

Fourth, Starmer has been adopting a tightrope foreign policy in balancing the rapprochement with China and the remarkably close partnership with the US. Shortly after Starmer’s trip to China, Donald Trump said that the UK foreign policy drift is “very dangerous.” However, unlike Canada, which is located at the “front yard” of the US, and which is more militarily vulnerable to the US tendency to adopt its gunboat diplomacy, the UK does not have to encounter such Canadian geopolitical risks.

Therefore, Starmer’s immediate visit to Japan for the sake of reaffirming the UK’s defence relations with Japan was a shrewd move that could allay the fears of Washington. After all, the UK belongs to one of the members of the Five Eyes with close defence and intelligence agreements with the US, Australia, New Zealand and Canada.

Fifth, Starmer’s attempt at wooing Chinese investment in the UK can help him secure the support of more big businesspeople in the UK; nevertheless, this cannot arrest the decline of the Labour Party’s popularity. The Labour Party’s unpopularity can be easily seen in the polls in the UK, where many people are unhappy with the economic policies of the Labour government. The Reform Party in the UK is gaining popularity – a reflection of the increase in popularity of the far right in many countries in the world, especially Europe and the US. Hence, while Starmer has tried his best to engage China with productive economic deals that benefit the UK, his engagement policy with China cannot arrest his Labour Party’s domestic decline.

Sixth, although not a member of the European Union, the UK as a core country in the European continent has adopted a more economically pragmatic policy toward China with the implication that other European countries may follow suit. France under Macron has already maintained far friendlier relations with China than many other countries in Europe. In the coming months, German Chancellor Friedrich Mertz’s visit to China in February will likely adopt a more pragmatic approach to dealing with China, like the UK and Canada. If this analysis is accurate, then Starmer’s visit to China was politically significant as it has served as a rude awakening to Germany, which has seen China as being too close to Russia in the Russo-Ukrainian war.

Seventh, Starmer received clear messages from the Chinese leaders, including President Xi Jinping and Premier Li Qiang, that China is committed to pursuing peace, multilateralism and economic globalisation. As such, maintaining economic globalisation in the world is necessary, and under this environment, it is in the interest of both the UK and China to reach pragmatic business and trade agreements, achieving a win-win situation in the world of international trade. The pragmatic business direction of both the UK and China is the right one, instead of pursuing the paths of hegemonism, isolationism, economic protectionism and megaphone diplomacy with the utilisation of tariffs as threats from time to time.

In conclusion, Starmer’s visit to China has signalled a notable change in UK foreign policy toward China, abandoning the previously hostile rhetoric of seeing China as a “threat” and drifting toward a more economically pragmatic and ideologically diluted approach to coping with China.

Like Canada, which sees China as a rising power that deserves closer engagement rather than ideological discrimination, UK foreign policy toward China has become far more economically pragmatic and less ideologically rigid than ever before. In the era of great geopolitical transformations in which the formerly US-dominated unipolar world after the collapse of the former Soviet Union has been constantly challenged by other newly rising powers, including China, the UK has shown its realistic adaptation to the emerging multipolar world in a relatively slow but inevitable manner.

Yet, the most recent visit by Starmer and his business delegation to China has become a testimony to the necessity of those pro-US European states to rethink how they should treat China in a more economically pragmatic, less ideological, and more diplomatically productive way than before.

Sonny Shiu-Hing Lo is a political scientist, veteran commentator, and author of numerous books and academic articles on Hong Kong, Macau, and Greater China. He is also an honorary professor in the Department of Politics and Public Administration at the University of Hong Kong