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UK Seeks to Revive China Economic Ties Amid Taiwan Tensions

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David Lammy Photographer: Peter Nicholls/Getty Images (Peter Nicholls/Photographer: Peter Nicholls/Get)

(Bloomberg) -- Foreign Secretary David Lammy arrives in China on Friday to seek a revival of UK relations with China, even as Beijing carries out military drills around Taiwan and before the British government’s own audit of the bilateral relationship.

Lammy will have talks and dinner with Chinese counterpart Wang Yi in Beijing during his two-day visit, to discuss climate and trade cooperation as well as Russia’s war against Ukraine, before heading to Shanghai to meet British business leaders. The envoy will also raise national security and human rights issues, people familiar with the matter said. The new Labour government’s plan for a deep-dive look at UK-China ties will only get underway this week, three and a half months after Prime Minister Keir Starmer took office.

The timing is awkward, after Beijing ordered its second major military drills around Taiwan since President Lai Ching-te took office in May. China flew a record number of warplanes across a US-drawn boundary in the strait, underscoring the intensity of military pressure it’s placing on Taiwan.

The UK Foreign Office said in a statement the countries will not “always agree” and “have significant differences including on democratic values and freedoms, Hong Kong and support for Russia’s illegal war in Ukraine.”

“Engagement with China is pragmatic and necessary to support UK and global interests,” Lammy said in a statement ahead of his visit. “From stopping Russia’s illegal invasion of Ukraine, to supporting a global green transition, we must speak often and candidly across both areas of contention as well as areas for cooperation in the UK’s national interest.”

Bloomberg also reported this week that senior UK ministers have been informed of widespread and likely successful efforts by Chinese state actors to access its critical infrastructure networks. A spokesperson for China’s foreign ministry said in response that “cyber security issues should not be politicized.”

Starmer’s spokesman, Dave Pares, told reporters that UK agencies have long warned that the most advanced threats to its critical infrastructure come from nation states including China, and that the government “will do what is needed” to keep those interests safe. In response to recent military activity around Taiwan, he said it is part of “an ongoing pattern of escalatory activity that’s not conducive to peace and stability in the Taiwan Strait.”

Without saying whether Lammy would raise the issue with his counterpart, Pares said the UK wants it to be “settled peacefully by the people on both sides of the Taiwan Strait, through a constructive dialog and not through any unilateral attempts to change the status quo.” He also said the UK wants to see the end of what it sees as the politically motivated prosecution of Jimmy Lai in Hong Kong.

Still, the UK’s new Labour government intends to resume an economic and financial dialog, that was paused in 2019 — when the Conservatives were in power — due to China’s crackdown in Hong Kong and tensions over the Covid-19 pandemic. The focus is on economic cooperation, trade and investment, financial sector regulation and development, climate change, science and innovation.

UK officials say Labour wants a more pragmatic, consistent engagement with China and to cooperate where possible on issues including trade and climate change — while also ensuring it can challenge on issues such as human rights. 

“The UK doesn’t want to miss the boat,” said Henry Huiyao Wang, founder of the Center for China and Globalization research group in Beijing, pointing to regular engagement by the US and European Union with China. The visit is the first step toward “warming up” ties and restarting the economic dialog, he said.

--With assistance from Colum Murphy.

©2024 Bloomberg L.P.