London Daily

Focus on the big picture.
Friday, Sep 04, 2026

Britain’s Economic Ties with China Will Dictate the Future of the Special Relationship

Britain’s Economic Ties with China Will Dictate the Future of the Special Relationship

America must use diplomacy to convince its best friend that an injection of the famous British courage in the economic space is necessary for protecting the UK’s sovereignty, security, and values.
President Joe Biden and UK prime minister Boris Johnson were all smiles at the G7 summit last month in Cornwall, England. But now that the fanfare and diplomatic niceties have died down, the United Kingdom and the United States must work to address how the UK’s economic ties with China could diminish the strength of the relationship.

For at least the past three years, democracies across the world have assessed the threat of the Chinese Communist Party (CCP) with new sobriety. That shift has been a long time coming. While the U.S. media routinely savaged the Trump administration for abrogating American leadership, the reality was that America under Donald Trump led on the most important geopolitical issue of the day: standing up to Beijing’s cheating, coercion, and aggression. The shift started with the Trump administration confronting Beijing’s trade abuses and intellectual property theft, and later extended into issue areas such as Huawei’s penetration of Western digital networks, the People’s Liberation Army’s aggressive posture toward the South China Sea and Taiwan, and the CCP’s genocide against Uyghur Muslims in China’s Xinjiang region. China poured fuel on the fire of a growing global skepticism with its Wolf Warrior diplomacy and pandemic cover-up.

The UK, too, although more slowly and less publicly than the United States, has fortunately recognized that the vaunted “Golden Age” of UK-China relations—characterized by an uncritical engagement that reached its zenith under Prime Minister David Cameron—cannot continue apace. In the last two years, the UK has banned Huawei from its 5G networks, supported Hong Kong’s promised freedoms, and approved sanctions on CCP officials responsible for crushing human rights in Xinjiang. Brexit is a wind at the country’s back for continuing a trajectory of vigilance. Now unmoored from the EU’s slow-moving foreign policy bureaucracy (which last month couldn’t even agree on a statement condemning CCP repression in Hong Kong), Johnson’s government is free to pursue its “Global Britain” agenda.

Presumably, that agenda would include exercising greater vigilance against Beijing, an area where there is much room to partner with the United States. Earlier this year the Johnson government released the Integrated Review, a comprehensive articulation of the UK’s goals and intentions in a post-Brexit world. Although the review was padded with platitudes on global engagement, it served the “special relationship”—and America’s foreign policy goals—by calling for a boost in British defense spending, affirming the United States as Britain’s “most important strategic ally and partner,” and calling for a “tilt” to the Indo-Pacific region.

The intellectual thrust of the review was, by and large, the product of John Bew, a historian and foreign policy ultra-realist who, as an advisor at 10 Downing Street, shares the Prime Minister’s view of the UK as a force for good in the world. Other forces in the Tory ranks are driving a tougher line on China, too. Former Party leader Sir Iain Duncan Smith, a co-chair of the Inter-Parliamentary Alliance on China, played a major role in driving the government’s Huawei decision and the suspension of the UK’s extradition treaty with Hong Kong. UK Trade Secretary Liz Truss, a rising Conservative Party star, has demanded that the World Trade Organization refuse to treat China as a developed country, a status that it currently enjoys.

The Biden administration and the U.S. Congress would be wise to cultivate relationships with the Tories to accelerate pressure for change. Johnson has tried to balance national security without angering the country that has just become the UK’s number one source of imports, and the result has been real incoherence. While the Royal Navy has dispatched a carrier group to the Indo-Pacific, for example, the government did little to condemn Chinese cyber intrusions against members of the UK parliament this past spring. When the CCP invoked the draconian Hong Kong National Security Law to force the closure of Hong Kong’s signal redoubt of free expression, the Apple Daily newspaper, the government could only muster a pro forma tweet by MP Dominic Raab in response to the latest evisceration of freedom in the former British territory.

The mission now for the United States is to highlight for its top ally the national security consequences of its economic decisions. The trade relationship is important but ultimately secondary. Like America, China’s democratic neighbors Japan and South Korea have already made the assessment that China is first and foremost a national security risk (with Australia and India not far behind if they aren’t there already). But UK political and business elites still predominantly see China as a source of trade, investment, and university fees.

It won’t be easy to revise this perspective. The review made clear that the UK government will continue to “pursue a positive trade and investment relationship with China,” and Chancellor of the Exchequer Rishi Sunak’s recent speech in the House of Commons reaffirmed that position, even if it was tempered with a call for a “principled stand on issues we judge to contravene our values.” And powerful commercial interests on both sides of the Atlantic are eager to continue business as usual in China.

So what to do? The UK’s National Security and Investment Act put into law last year gives the government expanded power to review foreign investment deals with national security implications. The Biden Administration must urge the UK to exercise the full extent of those powers. Chinese-owned Nexperia, for example, is in the process of acquiring the Newport Wafer Fab, the UK’s largest semiconductor plant. It seems the Johnson government has failed to appreciate why this is a problem. As one source told CNBC, “This is the largest last remaining advanced semiconductor factory in England being sold to the Chinese and the British government aren’t doing s*** about it.”

Deals like these matter, because a communist surveillance state ought not to control sensitive technology supply chains. Britain shouldn’t cede a crucial piece of technological autonomy. And from a geostrategic standpoint, the CCP has proven it will wield economic leverage in coercive and destructive ways – look at how the CCP stopped Australian imports of wine and beef when Australia simply asked for a real investigation into the COVID outbreak. The U.S. doesn’t want its best friend victimized in similar ways – or worse. What happens, for instance, when Nexperia – with Beijing’s sword at its back – threatens to shut down the chip fab if the UK decides to initiate new trade talks with Taiwan?

There are more steps the U.S. can do bilaterally, beyond urging stronger investment screening. The United States won’t join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership anytime soon, but there’s no prohibitions on quietly encouraging the UK to continue its pursuit of joining a high-standard pact that will reduce its reliance on trade with China. And now that the Biden administration has built some relational capital, why not have Secretary of State Antony Blinken give a speech in the City of London (or on Wall Street, for that matter) to highlight the CCP’s recent retaliation against banking giant HSBC, merely for the bank’s cooperation with a U.S. criminal probe into Huawei? It would send the message to the British financial sector: Even if you love the Chinese market, there’s no guarantee Beijing will love you back.

The Biden administration must also get going on a new free trade agreement between the United States and the UK. Brexit-related complications over the flow of goods and people between Northern Ireland, part of the UK, and the Republic of Ireland, still in the EU, have yet to be resolved. Unfortunately, Biden’s National Security Advisor Jake Sullivan counterproductively, publicly criticized the UK over its stance on Northern Ireland, and the Administration even reportedly ordered America’s acting top diplomat to London to issue a rare demarche to an ally over it. The great danger of no deal isn’t that that Britain will choose China over the U.S. as its preferred economic partner. It’s that Britain will increase its economic dependence on China in ways that will allow the Chinese to silence anti-CCP opinions in the UK and derail the country from taking action on important China-focused human rights and national security issues.

Finally, the British are avowed multilateralists and are genuinely concerned with the protection of the so-called international rules-based order, a favorite line of effort for Team Biden. The presence of Australia, India, and South Korea at the G7 gave momentum to the idea of the D-10, an idea born at the Atlantic Council of a grouping of democracies that can stand together against the CCP’s predations. Cooperation on reforming United Nations bodies and mechanisms that China tries to exploit to its advantage—the International Civil Aviation Organization, the genocide convention, veto power, the hypocritical Human Rights Council, to name a few—would also likely be an idea the British can get behind. Also worth exploring is Robert D. Atkinson’s “NATO for Trade” idea, perhaps useful for consolidating the production of high-end technological components within democratic nations.

The state of the special relationship is strong, and the United States is privileged to enjoy an alliance as robust as this one. But meaningful cooperation will become harder in a post-Brexit world if Chinese money can constrain the UK from joining with the United States in confronting CCP aggression, malign influence, and human rights abuses. America must use diplomacy to convince its best friends that an injection of the famous British courage in the economic space is necessary for protecting the UK’s sovereignty, security, and values. A special relationship that is able to do less is a realistic consequence of inaction.
Newsletter

Related Articles

0:00
0:00
Close
Scottish Tech Company PureLifi Enters Administration With More Than 40 Job Losses
Scottish Government Names Alyn Smith Innovation and Education Minister
Green Party Co-Leader Zack Polanski to Contest By-Election for Keir Starmer’s Former Seat
Palestine Action Activists Appeal Terrorism-Related Prison Sentences
PwC Report Highlights Persistent Regional Spending-Power Divide Across Britain
UK Names Hundreds of Employers for Minimum Wage Violations
UK Commits £400 Million to International Tropical Forest Fund
UK Extends £2 Bus Fare Cap Across England Through 2027
UK Warns Travellers as US-Iran Tensions Disrupt Middle East Security and Shipping
Andy Burnham Faces Kemi Badenoch in First Prime Minister’s Questions
Kemi Badenoch Names Andrew Griffith Shadow Chancellor in Conservative Reshuffle
UK Treasury and Markets Focus on Fiscal Headroom Ahead of Autumn Budget
UK Government Reverses Early Release Plans for Serious Violent and Sexual Offences
UK and France Review Border Cooperation After 48,000 Small-Boat Crossings Prevented
UK Growth Outlook Weakens as Inflation and Energy Costs Rise
Breeding Tropical Mosquitoes Discovered in East London
Sadiq Khan Agrees to Search of Digital Communications in Palantir Lawsuit
Scottish Protesters Call for Moratorium on AI Data Centre Expansion
Uber Drivers Bring London Class Action Over Algorithmic Management
Reform UK Accepts £4 Million Donation From Cryptocurrency Billionaire Pardoned by Trump
Justice Secretary Tightens Early Release Scheme to Exclude Manslaughter Offenders
Kemi Badenoch Reshuffles Conservative Team as Reform UK Pressure Grows
British Mortgage Rates Rise as Global Bond Sell-Off Pushes Up Borrowing Costs
UK Records Hottest Summer on Record in 2026
UK Government Urges Households to Stock Essential Supplies Ahead of Severe El Niño Risk
UK Prepares Targeted Sanctions Over Israeli Settlements in West Bank
Reform UK Faces Electoral and Police Scrutiny Over Foreign Donation Allegations
UK and France Expand Channel Migration Cooperation as Trade Tensions Surface
UK Marks Merchant Navy Day With Tribute to Civilian Seafarers
Burnham Pays Tribute to Two Police Officers Killed on Duty in Northern England
Booking.com Left Fake Downing Street Listing Online for Two Months, Which Says
Burnham and Macron to Review UK-France Cooperation on Channel Crossings
UK Business Confidence Improves Slightly but Investment Concerns Persist
Burnham Faces Pressure Over Future North Sea Oil and Gas Licences
Burnham Pushes Wider English Devolution Through ‘Number Ten North’
British Chambers of Commerce Raises 2026 UK Growth Forecast to 1%
Keir Starmer Resigns as Holborn and St Pancras MP, Triggering By-Election
UK Chancellor Faces Tighter Budget Headroom as Long-Term Borrowing Costs Rise
UK Government Weighs Thames Water Nationalisation as Financial Crisis Deepens
Prime Minister Andy Burnham Faces First Commons Questions Over Tax and Spending Plans
Eleven British Seafarers Receive Merchant Navy Medal
Which? Creates Fake 10 Downing Street Rental Listing to Expose Booking.com Vetting Weaknesses
BP Appoints New Chairman in Effort to Stabilise Leadership
Aberdeen Sells Hydrogen Bus Fleet at Heavy Loss After Green Transport Experiment
UK Records Hottest Summer on Record as Climate Change Intensifies Extreme Heat
Scotland Pledges to End Temporary Accommodation for Children and Build 111,000 Affordable Homes
DNO Agrees $396 Million Deal to Acquire Capricorn Energy
Uber and Wayve Launch UK’s First Supervised Autonomous Ride-Hailing Service in London
Britain Expected to Avoid New US Tariffs Targeting European Union
Middle East Conflict Pushes UK Energy Costs Higher and Revives Inflation Concerns
×