Pragmatism over ideology marks new chapter in China-UK ties

British Chancellor of the Exchequer Rachel Reeves' recent three-day visit to China marks a critical turning point in a relationship oscillating between hope and frustration over the past decade. Reeves' was the first visit of a British chancellor to China since 2019, signaling not just a return to diplomatic engagement but a shift toward strategic pragmatism.

In a world rife with geopolitical uncertainties, especially due to the return of Donald Trump to the White House, the United Kingdom government led by Prime Minister Keir Starmer is sending a clear message: economic growth and stability must be prioritized over ideology.

Lost opportunities and dashed hopes

The last decade of UK-China relations was marked by dashed hopes, with former British prime minister David Cameron's bold "Golden Era" investment plans faltering after political changes and international tensions escalated. Successive Conservative governments were often entangled in the ideological fog of China's human rights record and perceived geopolitical threats, leading to the UK's withdrawal from global economic engagement with China. That was not merely a political misstep, but a lost opportunity for boosting the UK's economic growth at a time when it needed it most.

Fast forward to today: a more prudent approach under Starmer's leadership is giving new life to UK-China relations.

During her visit to Beijing, Reeves reinforced the UK's economic aspirations, saying "Growth is the number one mission of this government. The fiscal rules laid out in the budget are non-negotiable. Economic stability is the bedrock for economic growth and prosperity." Reeves' message echoed the deepening awareness that economic success depends on building robust relationships with the world's key players.

Indeed, Reeves' visit is a recognition of a strategic economic reality. With the cost of government borrowing rising and the pound sterling falling, the stakes have never been higher for the UK's economic stability. Her engagement with China — a relationship critical to both countries' economic health — has delivered tangible results. Amid mounting opposition criticism, Reeves secured agreements worth about ￡600 million ($732.86 million) for the UK economy.

Numbers don't lie

Despite their bumpy political history, economic relations between the UK and China are too significant to ignore, not least because China (including the Hong Kong Special Administrative Region) remains the UK's third-largest trading partner, with bilateral trade reaching ￡103.1 billion in 2024. China is also the UK's sixth-largest export market, with the UK's exports reaching￡38.6 billion last year.

Besides, Chinese investment in the UK has been a cornerstone of the bilateral relationship, as Chinese enterprises invested ￡64.5 billion in the UK, the most significant amount among European countries, between 2000 and 2023.

Also, the UK remains a top destination for Chinese students, who contributed ￡5.4 billion to the UK economy. In 2022-23 alone, more than 170,000 Chinese students enrolled in British universities. This symbiotic relationship has immense untapped potential and, as Reeves emphasized, strengthening UK-China ties is a win-win for both sides.

Reviving the UK-China Joint Economic and Trade Commission, which the previous Conservative government froze, would be a crucial step toward building on these existing economic ties. In this regard, the momentum generated by Starmer's interactions with Chinese President Xi Jinping on the sidelines of the G20 Summit in Rio de Janeiro, Brazil, should be leveraged to the fullest extent.

Strategic areas of cooperation

The strategic imperatives of this new engagement go beyond trade deals and financial partnerships. One of the key areas where the UK and China can collaborate is in the green economy. Climate change and sustainability are priorities for the Labour government, with commitments to realize net-zero emissions and stop the sale of new combustion engine cars by 2030. Here, China has a significant role to play as a global leader in the production of electric vehicles and battery storage technology. The UK, in turn, can create for China opportunities to expand into a stable, growth-oriented market economy.

Energy transition is another common global challenge, with both the UK and China having much to gain from working together on clean energy technologies. With China offering affordable EVs and solutions for energy storage, the UK can meet its ambitious environmental targets, and accelerate its shift toward a green economy, further strengthening bilateral economic relations.

Moreover, the UK's decision to not follow the United States and the European Union in imposing tariffs on Chinese-made EVs and solar panels underlines the country's independent stance, sending a positive signal to Beijing. With the return of Trump to the White House, the US is expected to double down on its protectionist policies, particularly in sectors critical to the green economy, which makes China's role as a stable and reliable partner all the more critical for the UK.

Timely realignment for mutual benefit

With economic uncertainties weighing heavily on the UK, particularly in the wake of rising debt and inflation, the need for diversifying its economic partnerships is more pressing than ever. As Reeves aptly said, the UK's current fiscal position is the worst since World War II, and the need for growth is undeniable.

Given these facts, the UK should remove the ideological constraints that historically defined its relationship with China. As former British prime minister Lord Palmerston famously said, "We have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual, and it is our duty to follow those interests."

As the UK enters a new era of multipolarity, pursuing growth must take precedence over ideological purity. While the US under Trump may adopt an aggressive stance toward China, the UK must avoid following Washington's lead on matters that may not align with its best interests. Instead, it should adopt a sovereign, independent approach rooted in mutual benefit and pragmatism to build a prosperous future.

Reeves' visit to China is a bold first step in the new direction — one where the UK recognizes the importance of economic cooperation for long-term growth and stability. By prioritizing renewed engagement with the world's second-largest economy, the UK stands poised to reclaim its position as a key player in a rapidly changing world order.

The author is a political risk consultant and lawyer based in London who has served as the chairman of the international affairs committee at the Bow Group, which is the UK's oldest conservative think tank. The views don't necessarily reflect those of China Daily.

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