MPs urge clear UK strategy on China amid trade and security concerns

Britain risks allowing Washington or Beijing to determine its relationship with China unless ministers establish a coherent strategy, a parliamentary committee has warned. An investigation by the Commons business, innovation, science and trade select committee concluded that Labour had failed to deliver the consistent, long-term approach it promised after taking office in 2024.

The committee found that the government's approach was failing both to secure commercial opportunities for British companies and to control growing risks in dealings with China. Its chair, Labour MP Liam Byrne, said uncertainty was undermining businesses' ability to plan. He also warned that Britain could lose access to major manufacturing contracts as the European Union changes its trade policies.

Diplomatic engagement between Britain and China has been limited over the past decade. Keir Starmer's official visit in January was the first by a British prime minister since Theresa May travelled there in 2018. The effort to improve relations has coincided with concern that China's export growth could weaken industry elsewhere, alongside longstanding worries about cyber espionage and national security.

The report nevertheless recognised significant benefits from trade with China. British businesses have profitable operations there and want to expand while learning from Chinese innovation. Inexpensive imports, including electric vehicles, also help consumers facing pressure on household incomes. The committee argued that a clearer policy was needed to manage these opportunities alongside the risks.

Among the decisions criticised was the government's move in March to prevent Chinese company Ming Yang from building a £1.5bn wind energy plant in Scotland. The project was blocked over unspecified security concerns following years of negotiations. Scotland's first minister, John Swinney, has urged Andy Burnham to reconsider Starmer's decision. MPs also highlighted the emergency takeover of British Steel from its Chinese owners, describing the handling of these cases as reactive, inconsistent and lacking transparency.

The committee recommended dividing industries into a red zone closed to Chinese investment and a green zone where trade would be encouraged. It also called for preparations for measures against unfair competition, potentially including tariffs on electric vehicles, an option Downing Street has left open. Business secretary Jonathan Reynolds has said any decision on those tariffs will reflect Britain's best interests.

Byrne said Europe's changing approach made a British strategy urgent. He warned that new EU trade protections could leave UK companies outside barriers surrounding their largest market. He urged ministers to consider closer alignment with EU measures, including electric vehicle tariffs, to secure participation in the bloc's Made in Europe project and help counter Chinese dominance.

The EU has already placed tariffs on Chinese electric vehicles and limited hybrid car imports from China. It is also considering a Franco-German proposal to block imports if Beijing uses trade as a weapon. Meanwhile, China is heading towards a surplus exceeding last year's record $1.19tn. Its plan for 2026 to 2030 prioritises expansion in high-value green exports, including electric vehicles, batteries, wind turbines, hydrogen and solar panels.