UK Chancellor Defends China Ties Amidst US Trade Tensions

Rachel Reeves, the Chancellor, has voiced her support for maintaining a strong economic relationship with China, arguing that it would be unwise to isolate the world's second-largest economy. She emphasized that fostering a robust partnership with Beijing is crucial, and she would not erect trade barriers simply to satisfy the demands of former US President Donald Trump, particularly in light of his imposition of tariffs.

Reeves is scheduled to visit Washington next week to discuss a potential trade partnership between the UK and the US. She also extended an invitation to entrepreneurs seeking to relocate their businesses from the US due to the tariffs. The Wall Street Journal has reported that the US government might restrict Chinese companies from relocating to avoid tariffs or importing inexpensive goods from China. Reeves, however, stated that she would not emulate Trump's approach, reaffirming her commitment to a strong relationship with Beijing.

The Chancellor highlighted her recent visit to China as part of an economic and financial dialogue, accompanied by representatives from major UK financial services firms. The aim of the visit was to enhance the operational capabilities of UK financial services companies in China, including securing more licenses and quotas for British businesses. She emphasized that such arrangements are in the UK's national interest and would guide her approach to trade talks and financial dialogues with any country.

Despite her support for economic engagement, Reeves clarified that China would be excluded from certain critical national infrastructure projects. This stance comes amidst the ongoing attempt to nationalize British Steel, which would transfer ownership from its Chinese parent company, Jingye. The move would also prevent China from funding the construction of the Sizewell C nuclear plant in Suffolk. This decision has drawn criticism from the Chinese embassy in London, which expressed strong disapproval and warned of potential risks to future investment.