The UK is making up policy on China “as it goes along” and risks having its strategy dictated by Washington or Beijing, a parliamentary report has concluded. An investigation by the Commons business, innovation, science and trade select committee said Labour’s failure to formulate a coherent strategy since 2024 “combined the worst of both worlds” for the UK in relation to China. Liam Byrne, Labour MP and chair of the committee said the UK’s policy on China meant it was also endangering its business with the EU with the risk of being “cut off” from big manufacuring contracts.
The government could neither deliver commercial opportunities to British businesses nor control the “increasing exposure to unquantified, managed risk” in relations with China, it found. The report said: “In 2024, the new government promised a strategic, long-term, consistent UK approach to China. It has not delivered on this.
That trip was billed as an effort to end the “diplomatic ice age”, but since 2018 China has benefited from an export boom that is now fuelling fears about deindustrialisation, adding to deep-seated existing concerns about cyber espionage and national security. The MPs acknowledged the advantages of trading with Beijing in their report, noting that British businesses have profitable operations in China and “are ambitious to grow” and learn from the country’s “world-leading” innovations. At the same time, consumers benefit from low-cost imports when household incomes are squeezed, with electric vehicles being a case in point.
However, Byrne sharply criticised the government’s piecemeal approach. Instead, we have opportunities missed, risks unmanaged and decisions left until the 11th hour.” The committee cited the decision in March to block the Chinese firm Ming Yang from building a £1.5bn wind energy plant in Scotland after years of negotiation because of unspecified security risks. Scotland’s first minister, John Swinney, has called on Andy Burnham to reconsider Starmer’s decision.
That decision, along with the emergency takeover of British Steel from its Chinese owners, “has been characterised by reactivity, inconsistency and opacity”, the report said. Work on a new strategy, the committee said, should be combined with official preparations for new trade remedies to counter unfair competition, including potential tariffs on EVs, something Downing Street has not ruled out. The report calls for “clear new rules of the game” and recommends the designation of a “red zone” for industries that would be off-limits for Chinese investment and a “green zone”, where trade should be encouraged.
Byrne said a China strategy was an urgent concern as “Europe is changing fast” and “proposing new trade protections as it gets bolder with Beijing and warier of Washington”. The new laws “may trap Britain outside EU trade walls, cutting us off from our largest market”. Byrne said the government “should be prepared to consider dynamic alignment” with the EU include tariffs on EVs “as the price of securing British firms a place in the EU’s Made in Europe project” and to help guard against China dominance.
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