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Keir Starmer wants UK Plc to win over China’s Xi without annoying Trump
British Prime Minister Keir Starmer is in Beijing to boost trade with China. He aims to expand export business for British industries. Starmer is navigating a delicate balance between China and the United States. He is accompanied by business and cultural leaders. The UK is seeing a surge in Chinese electric vehicle imports.
UK Prime Minister Keir Starmer arrived in Beijing on Wednesday confident he can do what few leaders have shown the political dexterity to pull off: broaden trade ties with China without annoying President Donald Trump.
“I'm often invited to simply choose between countries,” Starmer said in an interview with Bloomberg before departing London for four days of talks with officials including President Xi Jinping and Premier Li Qiang on Thursday. “I don't do that.”
The UK leader is bringing a delegation heavy on British banking executives — from HSBC Holdings Plc, Barclays Plc and Standard Chartered Plc — and cultural emissaries representing the arts and sports. A range of manufacturers are also making the trip, including Airbus SE, AstraZeneca Plc, Brompton Bikes, Jaguar Land Rover and McLaren Automotive Ltd. Starmer arrived in the Chinese capital mid-morning Wednesday, UK time.
Also Read: UK approves China plan for its largest embassy in Europe despite espionage fears
Starmer's goal of opening up more export business for British industries is the same, whether it applies to the US or China. But his successes with Trump meant catering to a transactional, impulsive US president. China takes a much more methodical approach to deals and decisions that often take years to negotiate.
Sam Lowe, a partner at Flint Global in London and head of its trade and market access practice, said the UK's effort to “split the economy into ‘things we can trade with China' and ‘things we can't trade with China' makes sense” for now.
Longer term, however, those separate tracks will be increasingly difficult to manage in areas such as digital commerce, where the world's biggest economies are jockeying for supremacy and “where concerns around data and access to data spread across every sector,” he said.
Starmer's goal of opening up more export business for British industries is the same, whether it applies to the US or China. But his successes with Trump meant catering to a transactional, impulsive US president. China takes a much more methodical approach to deals and decisions that often take years to negotiate.
Sam Lowe, a partner at Flint Global in London and head of its trade and market access practice, said the UK's effort to “split the economy into ‘things we can trade with China' and ‘things we can't trade with China' makes sense” for now.
Longer term, however, those separate tracks will be increasingly difficult to manage in areas such as digital commerce, where the world's biggest economies are jockeying for supremacy and “where concerns around data and access to data spread across every sector,” he said.
Starmer departs just days after the US president threatened Canadian products with 100% tariffs after Prime Minister Mark Carney's visit earlier this month to Beijing. Carney secured a retreat from an earlier trade scuffle with China: Ottawa will allow some Chinese electric vehicles to be imported annually, in exchange for China lowering tariffs on Canadian rapeseed shipments.
Britain's PM has built a more cordial relationship with the White House, but Trump lashed out at Starmer last week, criticizing his plans to return sovereignty of Diego Garcia — the largest of the Chagos islands that houses a crucial military base — to Mauritius.
To avoid a flareup that endangers the US-UK trade agreement, Starmer aims to downplay Britain's Chinese imports and highlight its services industries. His overarching goal will be to maintain the current stretch of calm with both Beijing and Washington — as well as adhering to domestic priorities of free trade and sustainability.
“President Trump's unpredictability and willingness to reverse course, as we saw on his approach to Carney's trade truce with China and on the UK's Chagos deal, means that Starmer will need to maintain a carefully balanced narrative,” said Allie Renison, director at consultancy SEC Newgate UK and a former trade adviser to the Conservative government.
Beyond the geopolitics, Starmer is presiding over an economy where consumers, feeling squeezed by inflation and concerned about job security, are warming not only to cheap Chinese imports available on e-commerce sites like Temu and Shein, but to higher-priced items that compete with US and European producers.
Unlike the US and the European Union, Britain has no punitive tariff on Chinese electric vehicles. As a result, it has become a leading destination for new models from BYD Co. and Chery Automobile Co., which are rapidly gaining market share against competitors like Tesla Inc.
BYD Boom
BYD nearly quintupled its sales in the UK last year, registering more than 51,400 new cars and pulling ahead of both Tesla, whose sales fell almost 10%, and BMW AG's British marque Mini.
MG, the legacy British brand owned by China's SAIC Motor Corp., had an even better year, selling more than 85,000 new cars. That was more than Land Rover and only just shy of the number of Toyotas registered in the UK.
Also Read: BYD weighs India expansion as hundreds of car orders pile up
Bloomberg
“Almost all the brands are here, so all have a place in this market,” Victor Zhang, Chery's UK director, said in an interview. “This is also good for consumers” who are embracing the vehicles not just for their affordability but also their reliability and brand perceptions.
He said Chery wants to broaden its reach to 130 or 140 dealerships in the UK this year from about 100 currently, including an expansion in Northern Ireland.
Starmer will hope this openness, and his government's decision to approve China's new embassy in London, ultimately help Britain's services sector, said David Henig, director of UK trade policy at the European Centre for International Political Economy. “That, however, is probably the limit to what can be achieved given the risks of US wrath and domestic concerns centered around security.”
It's not just autos. Shop online in the UK for a new smartphone on Argos, a unit of J Sainsbury Plc, and you'll find Apple iPhones and Samsung models alongside much cheaper offerings from Xiaomi Corp., the Hong Kong electronics company initially banned in the US on national-security grounds before being given a reprieve.
No such stigma against Chinese products exists among many British consumers. Apple and Samsung still dominate but Chinese competition is intensifying.
“In the UK market, consumers are welcoming any good brand that gives them high quality and value for money,” said Celine Tang, retail and e-commerce sector lead with the China-Britain Business Council, a group that promotes UK-China trade and investment.
As Chinese manufacturers transition from little-known mass-producers of goods to distinct international brands on par with established leading names, British consumers are an ideal market because its shoppers “are always looking for other options and alternatives,” she said.
Bloomberg
In the US over the past decade, China's rising bilateral trade imbalance was the chief catalyst of a bipartisan backlash that helped give rise to Trump's protectionist trade policies.
By contrast, the UK remains largely open to Chinese trade despite a growing deficit driven by phones, computers and cars. China is gaining on Germany as the largest single source of Britain's imports.
Recently, UK public opinion has warmed toward China, according to YouGov polling released over the weekend. Its Jan. 21-22 survey showed the share of respondents who view China as a friend or a friendly rival rose to 27%, up from 19% in an October survey. The only other country from a list of 15 that showed any noticeable move was the US, whose friendliness factor fell to 52% from 69%.
It's unclear what Starmer will bring home from the trip. He could ask for Chinese investment in a popular, job-producing industry such as cars or battery manufacturing, though that may risk the ire of the White House.
Speaking to reporters on the flight to Beijing, Starmer said he was pursuing new arrangements that would make it easier for British businesspeople to travel to China. “I hope we can make some progress, but I'm not going to get ahead of myself,” he said when asked if he would strike a visa-free deal this week.
The trip could also see China give the go-ahead for the UK to rebuild its dilapidated embassy in Beijing. When senior ministers visited previously, diplomats hastily painted over the walls and sprayed air freshener to hide the cracked facade and plumbing issues, one official said. Rats have also been spotted at the embassy, they added.
The prime minister could certainly do with a win as rivals in his governing Labour Party eye his job. Starmer told Bloomberg the public had given him a personal mandate to lead Britain for five years, signaling to his critics that he wouldn't bow to the pressure.
Nonetheless, Trump's trade officials would likely frown on any sign that Britain is opening the floodgates to Chinese investment. Last week US Trade Representative Jamieson Greer said that while the impact of the Canada-China trade announcement was “overblown,” he indicated that allowing Chinese investments in Canada may cross a line.
Bloomberg
Starmer's trip, running Wednesday through Saturday, will be the first visit of a British prime minister to China in eight years and another chance to reset a relationship that's run hot and cold.
‘Golden Age'
Back in October 2015, former UK Prime Minister David Cameron and China's Xi clinked pint glasses to toast a “golden age” of UK-China relations. The backdrop was The Plough at Cadsden, a 16th-century pub that's popular among walkers along The Ridgeway, Britain's oldest road, and just a short drive from Chequers, the country retreat for UK leaders.
Four months after that photo op, Cameron announced the Brexit referendum would be held in June 2016. Several months later, the pub was reportedly purchased by a Chinese investor who had planned to export its cozy charm and develop English pubs across China.
More recently, The Plough's future looks as uncertain as the UK's place in the new world order.
On Saturday, locals and hikers walking along the muddy trail stopped to admire the old brick building with a few empty beer kegs sitting outside. The Plough's garden furniture is deteriorating, and an antique sign visible in the Cameron-Xi event is absent. The townspeople said they're not really sure what's next for it.
Since the holidays, the only thing they've heard is it's closed indefinitely for renovations.Add as a Reliable and Trusted News Source Add Now!
Source: EconomicTimes
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