New Business and Trade Committee inquiry: China and the UK Economy - what is the prize, and what is the price?
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“If the government won't publish a China strategy, Parliament must
fill the gap” Today, as China's National People's
Congress opens in Beijing, the Business and Trade
Committee launches a major new inquiry into China and the
UK economy. Over the next week, Chinese
legislators are expected to approve the country's
economic plan for the next five
years. China's industrial strategy to...Request free trial
“If the government won't publish a China strategy, Parliament must fill the gap” Today, as China's National People's Congress opens in Beijing, the Business and Trade Committee launches a major new inquiry into China and the UK economy. Over the next week, Chinese legislators are expected to approve the country's economic plan for the next five years. China's industrial strategy to date has succeeded in fostering a dynamic innovation ecosystem - heavily steered and supported by the state. Chinese firms have risen to global leadership in industries including batteries, electric vehicles and solar panels and are pushing into frontier technologies. In October last year, China expanded its export control regime for rare earth elements on which many sectors of the global economy rely. As home to one of the world's largest consumer markets, China is a crucial engine of global demand. But state subsidies have created a manufacturing surplus larger than that of Japan and Germany combined. China's policy makers are not expected to take meaningful measures to rebalance the economy. China is the UK's fifth biggest trading partner. The UK bought around £69 billion worth of Chinese goods last year, including machinery, telecoms equipment and consumer items. British exports to China include everything from tourism and higher education to cars and whisky. Chinese-owned firms employ over 57,000 people in the UK. China has financed tens of billions of pounds' worth of investment in UK businesses and projects this century. Relative to the size of its population and economy, the UK has been the top destination among G7 nations for these investments. But, as BBC Panorama reported last November, some of that investment may have given Chinese firms access to UK military-grade technology. Ahead of the first state visit to China since 2018, Prime Minister Keir Starmer said the UK approach to China had gone from “golden age to ice age” but that “like it or not, China matters to the UK”. The Government has embarked on a policy of “pragmatic engagement” with China, aimed at “creating new opportunities for British businesses to deliver jobs and growth for the British people.” But there are some very real concerns about the impact UK engagement is already having on UK economic security, and the BTC haspreviously concluded that the UK's economic security regime is not fit for purpose. The Government has also declared its intention to strengthen UK national security, including economic security, against the challenges posed by China. Rt Hon Liam Byrne MP, Chair of the Committee, said: "We cannot ignore China. And we cannot pretend China is standing still. China is changing fast - building global leadership in batteries, in electric vehicles, in solar panels, and now pushing hard into the frontier technologies that will define the century ahead. That creates new risks to our security and new prizes for our traders. “Getting the balance right is going to need a far more hard-headed approach to getting engagement right. Right now, the UK risks flying blind because we don't know enough about what we're risking, or what we're gaining. So if the government won't publish a China strategy, Parliament must fill the gap. That's why today we're launching our inquiry: China and the UK Economy — what is the prize, and what is the price? We intend to find out." So what is the prize, and what is the price? How big are the risks of boosting trade and investment ties? How sharp is the Government's policy toolkit to deal with them? What can we learn from how allies are engaging with China? How can UK firms compete with Chinese state-supported rivals? Do the UK's economic links to China make us vulnerable to coercion? Could widespread use of leading Chinese tech – apps, electric vehicles, connected devices – compromise sensitive data and systems? How can we ensure - and insure - against those risks? The inquiry is now open for evidence. If you're a British firm doing business with China, a Chinese firm doing business with the UK, or if you have expertise on any of the questions here, please submit evidence via the inquiry portal by Friday 10 April.
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