UK Chancellor Rachel Reeves heads to China this week to meet with Vice-premier He Lifeng and relaunch previously annual talks known as the UK-China Economic and Financial Dialogue, the last of which were held in 2019.
This UK government has demonstrated a greater desire to engage with China than its predecessor. Foreign Secretary David Lammy visited China in October and Prime Minister Keir Starmer met President Xi Jinping in Brazil in November. Prior to this, no UK leader had met their Chinese counterpart since 2018, a relative lack of direct engagement compared with the US and European countries.
Visits to develop relations between leaders and get an understanding of the personal dynamics at play are necessary to navigate the modern world and tackle challenges to which China is central, not least climate change, poverty and technological development. But for this to be effective, UK politicians need a deeper understanding of how their Chinese counterparts approach diplomatic engagement and where their mindsets diverge.
From China’s perspective, positive engagement tends to mean consensus rather than frank exchange. The UK should seek mutually constructive exchanges while avoiding the risk that visits bolster Beijing’s influence without benefitting UK interests or delivering progress on its priority global issues.
Engagement should also have a clear purpose, underpinned by strategic clarity at home. Reeves’ visit comes at a curious time, when the government’s long-promised China audit is still underway. Announced as a key part of Labour’s approach to China, the audit aims to straighten out what the party characterized as inconsistency on China by its Conservative predecessors. However, it has now been delayed and may only be published partially in the spring. There are also reports of officials attempting to lower expectations about its role in setting strategy.
But setting strategy is critical, whether it is part of the audit process or not – particularly as this government apparently pursues greater political and economic engagement with China. This will require more credible plans and red lines for countering Chinese state influence at home and managing the risks of specific economic and technological dependencies on China.
Countering the risks of malign influence
There have been a series of recent spy scandals. In 2022, MI5 named Christine Lee as a suspected Chinese agent who had built links in parliament; a parliamentary researcher with ties to MPs was arrested in 2023 amid spy claims; and there are recent reports that an alleged Chinese agent had close links with Prince Andrew and other members of the establishment.
The government’s long-planned Foreign Influence Registration Scheme has been delayed, which would enable it to enforce greater transparency on agents acting on behalf of China and other states. The practical functioning of the scheme needs careful consideration, particularly to avoid incriminating legitimate actors and activities and adding extensive compliance burdens to businesses and NGOs. But the UK does lack some kind of mechanism for clarifying and regulating those who act on behalf of foreign powers. By comparison, allies like the US and Australia both operate similar schemes.
The spy scandals also underline the urgency of a better understanding among politics and policy circles about how Chinese agents use and wield influence in foreign states. The importance of building stronger understanding and skills on China has been highlighted by a range of UK-China specialists, including recommendations for new policy approaches and capabilities. But the government’s last major funding announcement on China capabilities was for 2024-25 funding of a relatively small programme focused on central government skills. This is insufficient and needs longer-term funding and planning at a minimum.
And, building capability and literacy about the modern Chinese state and how it operates must go beyond central government. Parliament, local government, businesses, research institutions and charities are all vulnerable to influence operations particularly because these are often diffuse and difficult to detect. A lot of China’s influence operations rely on long-term cultivation of relationships of precisely the kind needed for business and other exchanges to work, rather than what most in the West might traditionally consider espionage.
A deeper awareness of these techniques and how the resulting relationships are leveraged by Beijing to gather intelligence and increase influence is essential. This should be prioritized not just in central government but across local government, business and higher education to ensure the UK is resilient while maintaining a pragmatic relationship with China. Small capability and advisory programmes, such as the government’s Research Collaboration Advice Team, could be expanded beyond research institutions.
Managing the risks of economic and technological dependency
The extent of China’s dominance of critical supply chains and emerging technologies means that some level of pragmatic economic engagement is essential. The challenge for the current UK government and its successors in the decades to come is to develop a clear and adaptable strategy for mitigating economic and technological dependencies on China.
While the pre-election focus on ‘securonomics’ has been less prominent in recent months, the risks of dependency remain. This is especially true if the UK government seeks to realize its net zero agenda through technologies such as solar and wind power and electric vehicles (EVs). In the short- to medium-term – absent a step-change in supply chain diversification and reshoring – this means a continuing dependence on China for critical materials and components.
But the bigger risk may be long-term technological dependence, as China continues to develop from a follower to a leader in emerging technologies, potentially outstripping the ability of the UK and its allies to catch up. This is a challenge of a different magnitude from dependence on raw materials or components which could, in theory, be sourced from elsewhere.