UK-China relations: recent developments

Over the last several years, relations between the UK and China have deteriorated sharply.

This paper looks at some of the most significant aspects of the UK-China relationship, but does not attempt to cover all of its components.

Worsening of relations

Several factors have contributed to the worsening of relations.

Domestic policy of the Chinese Communist Party

Firstly, the hardening of the Chinese Communist Party’s (CCP’s) rule over China, including efforts to exert greater control over Hong Kong, and alleged human rights abuses against the Uyghur population in Xinjiang.

These in turn have led to strong criticism by the UK, including the imposition of sanctions. China subsequently retaliated with its own sanctions with several British MPs and peers targeted.

Forceful foreign policy

Secondly, the adoption by China of more forceful rhetoric and more expansive foreign policies. These have led to assessments by the UK Government in its 2021 strategic review of defence and security that China is a “systemic competitor”, and that the that China represents the “greatest state-based threat to the UK’s economic security”.

Cyber attacks and espionage

Thirdly, the UK’s intelligence and security services have warned that China is increasing its espionage and cyber operations, in particular seeking to gain sensitive commercial information. These efforts are in part motivated by China’s efforts to become a world-leader in emerging technologies, encapsulated by its Made in China 2025 industrial strategy.

Relations between China and the UK’s allies

Fourthly, the UK’s major allies, including the United States and the European Union have also identified China as a growing threat, particularly to their economic security.

Strong economic relationship remains

Despite these tensions, the economic relationship between China and the UK remains strong, and the UK remains a popular destination for Chinese students. However, there have been concerns about the effect of Chinese funding in the higher education sector has had on academic freedom and freedom of speech.

The UK Government has also said it seeks to continue to work with China on areas of shared interests such as climate change.

However, since 2021 the government has passed several pieces of legislation to counter state threats, including the National Security and Investment Act 2021. This gave the government powers to block mergers and acquisitions on national security grounds. The government used these powers in 2022 to order a Chinese-owned firm to reverse its takeover of the UK’s largest microchip plant, Newport Wafer Fab.

China had been a major investor in the UK civil nuclear sector; however, the UK has now changed the funding model for new nuclear plants, in part to reduce reliance on overseas investors. In 2022 the government bought out the state-owned China General Nuclear’s stake in the proposed Sizewell C power station.

Future of UK-China relations

The Labour Party’s manifesto commits the new Starmer government to an audit of the bilateral relationship (PDF) to “improve the UK’s capability to understand and respond to the challenges and opportunities China poses”.