In the last decade, Britain’s relations with China have been on a rollercoaster. In 2015, during the visit of Chinese leader Xi Jinping to the UK, then chancellor George Osborne was able to declare the two countries were in a “golden era”. He did this with the conviction that with a growing economy and rising middle class, China offered plenty of opportunities for Britain. But by 2022, Rishi Sunak had declared the “end of the golden era”. And in 2023, deputy prime minister Oliver Dowden labelled China Britain’s greatest economic security threat, to align closer with the position of the US, and through fears of deeper Chinese espionage and interference in the outside world. Seldom had a diplomatic boom-bust cycle happened so rapidly and so completely.
In view of extremes such as these, to see a return to unvarnished, largely conventional engagement looks like a revolution. In the past, Rachel Reeves turning up in Beijing for a high-level economic dialogue, as she did over the weekend, would have attracted little notice. China is, after all, still the world’s second largest economy and accounts for about a fifth of global GDP. Its middle class, despite recent domestic economic turbulence, constitutes one of the most dynamic and sought-after consumer groups on the planet. But in 2025, such a visit looks like radical action because of the dramatic deterioration that occurred in the final years of the Conservative administration.
If the hyperbole of the “golden era” was a little too much, the shrill anger and demands for almost total decoupling after the pandemic set in during 2020 went too far the other way. China and Britain have never been easy partners. Their history of argument and clashing goes back at least to the early 19th century and the period of the Anglo-Chinese wars. But they have always talked with each other and always sought to have a relationship.
These days, the rows are about Hong Kong, Xinjiang, China’s behaviour in the South China Sea and its attitude towards Taiwan. These all stand out as perennial points of disagreement. What has changed, however, is the amount of leverage that London has in trying to get Beijing to take notice of anything it says. Chinese leaders are not dismissive of the UK. They understand Britain as a close security ally of the US, a fellow member of the UN security council permanent five, and a significant player for finance and some forms of technology. But the reality is that they have a bigger picture to focus on and a limited to nonexistent appetite for being lectured by a power they see as smaller and weaker than they are.
A great deal of the turbulence in the Britain-China relationship recently can be put down to issues outside Britain’s direct control. The first Trump presidency and the trade wars caused the start of geopolitical divisions that continue to this day. The US and China are in a period of deep competition and disagreement. The UK and everyone else exist in the shadow that casts.
Also the pandemic and what was seen as its mismanagement by China caused major problems for its international image. In the UK, polls show that perceptions of China deteriorated rapidly around that time. These issues were exacerbated by the hardline Chinese management of Hong Kong because of Britain’s ongoing interests with the city, and its generally nationalist and populist style of politics today.
But even in the roughest moments, only the most dogmatic in Britain argued against some form of engagement. Reeves’s visit to China attracted criticism. But for her to not go there at some point would have been even less defensible. Britain’s stagnant growth, the barriers to more traditional markets like Europe because of Brexit, the neverending challenges of poor productivity – all of these mean that the risks of not engaging with China to see what investment and trade might be possible are higher than the risks of doing so.
The reality in early 2025 for Britain can be easily stated. Chinese investment here has remained essentially static, from 0.1% of stocks a decade ago to about 0.2% today. In 2024, China was Britain’s fifth-largest trading partner, but much of that is through imports here rather than UK-China exports. China spends about 20 times more on research and development than Britain. And despite rising fees, the 150,000 Chinese students at British universities still make a massive contribution to the sector. Seeing more Chinese finance companies working in London would bolster its credential to continue as a major international finance hub. And while the Chinese electric vehicle (EV) manufacturer BYD has a presence in Britain, seeing more companies like this in sectors such as high-speed rail or automotives or renewable energy would at least offer a basis for getting access to Chinese knowhow and capital. And getting improved access to their domestic market would still be a great step forward.
Britain doing better in its relations with China doesn’t mean going head over heels for total alignment. The two countries will never be close allies and will always disagree on as much as they agree. But they can definitely create a more pragmatic, even-tempered relationship. Reeves’s visit secured £600m of deals. The Xi visit in 2015 apparently produced more than 50 times this amount. But in view of the almost complete inactivity in recent years, at least this was something. And one thing is for sure: China might possibly listen to a country that has at least some joint economic links and trade with it. But it won’t give a second’s attention to a place with no links at all. Britain needs to deal with China. It is folly to think otherwise.
