^{Photo: Bloomberg}

A diplomatic reset takes shape in Beijing

China and the United Kingdom are taking concrete steps to repair a relationship that has been strained for nearly a decade, with Chinese President Xi Jinping telling British Prime Minister Keir Starmer that Beijing is ready to pursue a long-term strategic partnership with London.

The comments came during Starmer’s four-day visit to China, which began Wednesday and marks the first trip by a sitting UK prime minister since 2017. The visit signals a clear shift in tone from both sides, as they attempt to move beyond years of political friction and rebuild cooperation across trade, investment and innovation.

Starmer described the UK’s approach as an effort to create “more sophisticated” ties with China, emphasizing pragmatic engagement alongside continued attention to national security.

Chinese state media said both governments agreed to expand collaboration in education, healthcare, financial services and scientific research, with a particular focus on artificial intelligence, life sciences and new energy technologies. Beijing also indicated it may consider visa-free access for British citizens, while urging the UK to provide a fair and non-discriminatory business environment for Chinese companies operating in Britain.

From confrontation to cautious engagement

Relations between the two countries deteriorated sharply over recent years. London has accused Beijing of espionage activities and formally designated China as a long-term strategic challenge. Tensions deepened further after China imposed a sweeping national security law in Hong Kong in 2020, drawing strong criticism from the UK, the former colonial power.

Starmer’s visit reflects a recalibration of that stance. While the UK government continues to frame China as a systemic competitor, it is now seeking what officials describe as a “strategic and consistent relationship,” one that balances economic engagement with vigilance over security risks.

In a statement released during the visit, the UK government said it aims to attract fresh Chinese investment and expand bilateral trade, while maintaining safeguards in sensitive sectors such as critical infrastructure, advanced technology and data.

The shift comes against a backdrop of growing uncertainty in global diplomacy. U.S. President Donald Trump’s renewed tariff threats and unpredictable foreign policy have unsettled traditional allies, prompting countries like the UK and Canada to diversify economic partnerships.

Beijing, for its part, has stepped up outreach to Western leaders. In recent weeks alone, China has hosted Canada’s Prime Minister Mark Carney, Ireland’s Prime Minister Michael Martin on the first Irish leader visit in 14 years, and Finland’s Prime Minister Petteri Orpo.

During talks with Starmer, Xi warned that rising unilateralism and protectionism are damaging the global order, urging major economies to uphold international rules and cooperation rather than allowing geopolitics to fragment global markets.

Business diplomacy takes center stage

Starmer arrived in China accompanied by dozens of senior UK executives spanning finance, manufacturing, energy and technology. Addressing the delegation, he encouraged British firms to seize opportunities in the world’s second-largest economy, which remains a critical market for exporters and investors despite slower growth.

The UK government also recently approved plans for a large new Chinese embassy complex in London, a proposal that had been stalled for years due to political and security concerns. The decision is widely seen as another signal of warming ties.

At the same time, the commercial reality on the ground remains challenging. According to the British Chamber of Commerce in China, UK companies have faced a deteriorating business environment for six consecutive years.

In its latest survey of more than 300 British firms, nearly 60% said operating conditions in China had worsened over the past year. Respondents cited economic slowdown, regulatory pressure and geopolitical uncertainty as key obstacles. While few companies are preparing to exit China altogether, many reported becoming more cautious about new investments and expansion plans.

Still, China continues to be viewed as a strategically important market, particularly in sectors such as green energy, advanced manufacturing, consumer goods and financial services.

Trade imbalances and economic realities

Despite renewed diplomatic momentum, the economic relationship remains uneven. The UK’s trade deficit with China widened by more than 18% year over year to approximately £42 billion ($58.1 billion) in the 12 months ending June 2025, underscoring Britain’s heavy reliance on Chinese imports ranging from electronics and machinery to consumer products.

British policymakers hope deeper engagement can help rebalance trade over time, particularly by opening doors for UK services firms, financial institutions and high-value exporters.

China, meanwhile, is keen to attract Western capital as it works to stabilize growth, boost domestic consumption and accelerate its transition toward clean energy and high-tech manufacturing.

A careful path forward

While officials on both sides are emphasizing cooperation, neither government is suggesting a return to the close partnership of the early 2010s. Instead, the emerging framework points to a more transactional relationship, built around selective collaboration in areas like climate, healthcare and innovation, alongside guarded competition in technology and security-sensitive industries.

For Starmer, the visit represents an early test of his foreign policy approach, balancing economic pragmatism with political caution. For Xi, it offers another opportunity to position China as an indispensable global partner at a time when many countries are reassessing their alliances.

As both nations attempt to turn the page, the success of this reset will depend less on diplomatic statements and more on whether businesses see tangible improvements in market access, regulatory clarity and mutual trust.

For now, the message from Beijing and London is clear: after years of tension, China and the UK are cautiously reopening channels, aiming to replace confrontation with structured engagement in an increasingly fragmented global economy.

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