UK Making Up China Policy 'As It Goes Along', MPs Warn

British MPs have concluded that the UK is making up policy on China "as it goes along" and risks having its China strategy dictated by Washington or Beijing. The Commons business, innovation, science and trade select committee, chaired by Labour MP Liam Byrne, published the findings after investigating Labour's record since the party took office in 2024.

The report's verdict is blunt. Labour's failure to build a coherent China strategy since 2024, it said, "combined the worst of both worlds" for the UK. The government can neither deliver commercial opportunities to British businesses nor control what the committee called "increasing exposure to unquantified, managed risk" in the relationship.

"In 2024, the new government promised a strategic, long-term, consistent UK approach to China. It has not delivered on this," the report stated. "Britain must shape its own relationship with China or risk having that relationship shaped for us in Washington or Beijing."

What went wrong with engagement?

The UK's relationship with China has been marked by a lack of engagement over the last ten years. Keir Starmer made the first official visit in January — the first since Theresa May travelled to Beijing in 2018. The trip was billed as an effort to end the "diplomatic ice age".

Since 2018, China has benefited from an export boom that now fuels fears about deindustrialisation in Britain. That concern sits on top of existing worries about cyber espionage and national security.

The MPs did acknowledge the upside of trading with Beijing. British businesses have profitable operations in China, "are ambitious to grow" and want to learn from the country's "world-leading" innovations. Consumers benefit from low-cost imports while household incomes are squeezed — electric vehicles are the clearest case.

Byrne's criticism of the government's piecemeal approach was sharp. "Britain's businesses cannot plan for the future when the government keeps making up its China policy as it goes along," he said. "Ministers promised clarity and consistency. Instead, we have opportunities missed, risks unmanaged and decisions left until the 11th hour."

Which decisions drew the committee's fire?

The report cited two cases in particular. In March, the government blocked the Chinese firm Ming Yang from building a £1.5bn wind energy plant in Scotland after years of negotiation, citing unspecified security risks. Scotland's first minister, John Swinney, has called on Andy Burnham to reconsider Starmer's decision.

The second case is the emergency takeover of British Steel from its Chinese owners. Both decisions, the report said, "have been characterised by reactivity, inconsistency and opacity".

What does the report recommend?

The committee calls for "clear new rules of the game". Its central proposal is a two-zone system for Chinese investment:

• A "red zone" of industries that would be off-limits to Chinese investment
• A "green zone" where trade with China should be encouraged

Work on a new strategy, the committee said, should be combined with official preparations for new trade remedies against unfair competition, including potential tariffs on EVs — something Downing Street has not ruled out.

Why does the EU matter here?

Byrne framed a China strategy as an urgent concern because "Europe is changing fast" and is "proposing new trade protections as it gets bolder with Beijing and warier of Washington". New EU laws, he warned, "may trap Britain outside EU trade walls, cutting us off from our largest market".

He said the government "should be prepared to consider dynamic alignment" with the EU, including tariffs on EVs, "as the price of securing British firms a place in the EU's Made in Europe project" and to help guard against Chinese dominance. The UK is already under pressure to align with the EU on EV tariffs, but business secretary Jonathan Reynolds has said he will decide in the best interests of the UK.

The EU has not waited. It has already imposed tariffs on Chinese EVs, capped the number of hybrid cars that can be imported from China, and is now considering a Franco-German proposal for a "kill switch" to block imports if China weaponises trade — as it did last year with curbs on exports of rare-earth minerals and chips. "The UK's partners are moving further and faster," the report noted.

The stakes are large. China is on track to surpass last year's record $1.19tn trade surplus with the rest of the world. Its latest five-year plan, covering 2026 to 2030, prioritises the strategic expansion of high-value green exports such as EVs, batteries, wind turbines, hydrogen and solar panels — the very sectors where Britain must now decide whether to build walls or open doors.