Economic engagement with China: trade, investment, competition, coercion?
In the second oral evidence hearing of the BTC’s inquiry on China and the UK economy the Committee turns to the risks of economic engagement with China in the areas of competition, economic coercion, supply chain risks and investment security.
Meeting details
China’s traditional image of a low-cost manufacturing exporter has been supplanted as it moves to a position of global leadership in high tech R&D in life sciences, renewable energy and electric vehicles. In 2023, China became the largest exporter of cars, and US carmakers and politicians alike are reportedly eyeing President Trump’s current visit to China with huge trepidation. While the US sector is currently protected by 100% tariffs that some lawmakers insist are non-negotiable, President Trump himself has opened the door to Chinese investment in US auto manufacturing.
Faced with the competitive might of a country that has gone from “factory to laboratory”, some EU firms are looking to form partnerships in China. But this opens the huge risk of ceding expertise to their greatest competitor.
Across three panels, the Committee will ask witnesses to assess the form and level of these risks to UK industry and markets. Should the UK Government follow the EU in putting measures in place to level the playing field for UK firms? Or, at a time when many British households are under growing financial pressure, should we be welcoming an influx of low-cost and increasingly sophisticated Chinese goods into the UK?
Rt Hon Liam Byrne MP, Chair of the Committee, said: “The era when economic engagement with China could be treated as merely a matter of trade is over. China is now a systemic competitor across advanced manufacturing, green technology, artificial intelligence and critical supply chains.
“That creates opportunities for British consumers and exporters, but it also raises difficult questions about market distortion, economic coercion, technology transfer and strategic dependency. The Committee’s task is to examine whether Britain’s rules, institutions and industrial strategy are now fit for the future to protect fair competition and our economic security in this new and riskier age”