MNI INTERVIEW:UK-China Deal Unlikely, But Ties To Deepen

China and Britain are unlikely to sign a comprehensive trade agreement due to current political sensitivities but are expected to deepen economic ties later this year, building on Chancellor Rachel Reeves’ January restart of the UK-China Economic and Financial Dialogue (EFD) in Beijing, a British business leader in China told MNI. 

Authorities may pursue sector-specific trade protocols – similar to those recently signed between China and Spain, focusing on sectors like agriculture and electric vehicles – rather than a broad agreement like the U.S.-UK or UK-India deals, when Prime Minister Keir Starmer and Business Secretary Jonathan Reynolds visit Beijing over the coming months, said Chris Torrens, vice chair at the British Chamber of Commerce in China.

“Current political sensitivities in Westminster make a full deal with China difficult, but we expect the EFD, a high-level platform to address overarching issues and coordinate policies, to be held annually from now on,” he said, noting that progress in implementing January’s session was already notable in areas such as intellectual property rights and green financing.

China's decision to issue green sovereign bonds in London worth CNY6 billion in April was a direct outcome of the EFD and showed Beijing was serious about establishing a new phase of pragmatic cooperation, following a stall in relations after the end of the Sino-UK “golden era” in 2018, he added.

Reynolds’ bid to revive the UK-China Joint Economic and Trade Commission (JETCO) during his next visit would be an important step towards further EFD implementation, Torrens said. “JETCO will set up a working level relationship that can help translate the principles of the EFD into relevant ministry policy,” he said.

SERVICES BOOST

The Chinese government’s aim to boost household spending this year has sparked demand for British media, sport and live entertainment companies for the first time since the pandemic, Torrens noted. “A more relaxed attitude towards consumption is noticeable,” he added.

Torrens highlighted recent tours by British artists Ed Sheeran and James Blunt, an uptick in events organised by World Snooker Tour and Formula E, as well as the English Premier League opening its first China office, as evidence firms were finding increasing opportunities. 

However, despite the liberalisation of approvals, accessing the China market remained challenging for members, given strict compliance and approval processes, Torrens said. 

“Detailed rosters and plans need to be submitted far in advance, and tours need approvals from each city separately which is very cumbersome,” he noted.