Starmer's China Visit Yields Few Tangible Wins Amid Economic Realities
Keir Starmer's carefully orchestrated visit to Beijing this week was designed to herald a new era of sophisticated relations between the UK and China, echoing the optimistic Golden Era rhetoric of the Cameron government from 2010 to 2016. However, beneath the diplomatic fanfare, the trip has produced few tangible outcomes, raising questions about its ultimate value for British interests.
A Stage-Managed Affair with Creative Focus
The high-level production of this state visit was notable for its emphasis on the creative industries, with a quarter of the UK trade delegation comprising representatives from theatre, museums, and orchestras. This reflects the government's strategic prioritisation of the cultural sector in its industrial strategy, yet it also highlights a potential mismatch with economic realities.
In contrast, only nine representatives from financial services and wealth management attended, suggesting a cautious industry assessment of China's economy and the likelihood of genuine market access after years of unfulfilled promises.
Deteriorating Trade Dynamics Since 2018
Since the last UK Prime Ministerial visit to Beijing in 2018, the trade deficit with China has doubled, while the UK's market share for goods and services in China declined last year after remaining stagnant since 2014. Despite framing China as a natural growth partner, it accounts for a mere 0.2 per cent of foreign direct investment in the UK, starkly contrasting with the USA's contribution of one-third of all foreign investment.
The UK public is acutely aware of the high costs of missteps in Chinese investment, such as the £2 billion spent on removing Huawei from the 5G network or the £700 million paid to China Nuclear General to exit Sizewell C. Past successes have not endured, with the Chinese owner of Lotus cutting 42 per cent of its UK workforce last year, and Astrazeneca executives facing imprisonment in China on fraud allegations.
Limited Outcomes and Security Concerns
Similar to recent visits by Canadian and French leaders, Starmer's trip yielded sparse concrete results. Announcements included non-binding Memorandums of Understanding, visa-free travel extensions for UK nationals (already granted to Europeans a year ago), and a migration cooperation agreement targeting criminal gangs. A five per cent reduction in UK whiskey import tariffs is estimated to be worth £250 million over five years, comparable to recent government spending on British Steel's partial nationalisation.
Meanwhile, Astrazeneca announced £15 billion in Chinese investment, relocating manufacturing and R&D away from the UK despite risks to personnel and intellectual property. This trip appears more as an ice-breaker for future engagement, rather than a catalyst for immediate economic growth, which Starmer has emphasised as his government's primary goal.
Future Challenges and Policy Criticisms
The government now faces the challenge of addressing critics who argue that national security concerns are being overlooked, and that promised Chinese investments and trade have not materialised. With China's move towards economic self-sufficiency and a projected increase in global manufacturing share, future deals must navigate a complex landscape of patchy track records and geopolitical tensions.
