Keir Starmer Should Rethink Britain’s China Policy

As Keir Starmer begins his first full week in Downing Street as Britain’s new prime minister, his inbox is heavy with foreign-policy challenges, from wars in Ukraine and Gaza to a looming likely second Trump presidency.

High on the new government’s list will also be a more balanced and coherent China strategy to replace the muddle that has marked London’s approach to Beijing over recent years. What began as mercantilist opportunism under Prime Minister David Cameron ended up with ideological belligerence during the brief but disastrous leadership of Liz Truss. More recently, Rishi Sunak seemed simply disinterested. Sunak neither met nor spoke on the phone with Chinese President Xi Jinping. Relations between Beijing and London have been comatose as a result.

Starmer can now put diplomatic ties on a more regular footing. He will have the chance to seek a phone call with Xi—a chance he should take. Labour has then pledged to begin an overhaul of China policy via an “audit” to be launched during its first 100 days in office—one of only a few foreign-policy commitments in its election manifesto. Starmer could also seek a bilateral meeting with Xi at the G-20 summit in Brazil in November. Yet these opportunities to talk to China will be useful only if Britain can first figure out the contours of a more sensible strategy. For starters, that means avoiding the obvious pitfalls China presents to a middle power such as Britain, especially when there is a new leadership at the helm.

Improving ties with Beijing is doable. Relations between the United States and China have ticked up over the last year, albeit from a low base. Indeed, the fact that Washington and Beijing are not currently at diplomatic loggerheads makes it easier for London to fix its own relationship. Australia presents a similar story. Prime Minister Anthony Albanese entered office talking about the need to “stabilize” relations with Beijing. Canberra has since had more regular contact with Beijing, and Albanese last year became the first Australian leader to visit China since 2016.

It would be a mistake for Starmer to frame his own approach to China in terms of “stabilization,” however. Stability might seem a laudable goal at first. But it creates perverse incentives later by tempting governments to duck tough decisions that might annoy Beijing for the sake of stability alone. Britain’s relationship has been notably rocky of late. In April, U.K. authorities charged two British nationals with spying for China. In May, it was revealed that a suspected Chinese cyberattack had hit the British Defense Ministry. In truth, this regular cadence of tensions is now the norm. Relations with China are likely to remain inherently unstable. It would be unrealistic to pretend otherwise.

It would also be a mistake to think that a new approach to China will lead naturally to fresh investment for Britain’s battered economy. For starters, talk of reengagement plays badly with important allies such as Australia and Japan, not to mention the United States. It risks implying that London seeks a return to some prelapsarian moment of warmer ties, which mostly never existed in the first place. More to the point, China is simply unlikely to invest much in Britain. In part, that is because Britain is no longer an easy export base to the European Union. More significantly, Chinese investment in Europe—both the EU and U.K.—plunged to 6.8 billion euros in 2023, its lowest level since 2010, according to Rhodium Group and the Mercator Institute for China Studies. Much of that trickle went to countries, such as Hungary, that take a pliant approach to Beijing. The idea that China will invest large sums if only London plays ball is a mirage.

So, what might a more sensible China policy look like? Labour’s planned audit might sound like a cop-out—like appointing a task force instead of resolving a problem. But given the incoherence of recent British policy, there is merit in a hard analytical look at the complex challenges China presents, not least because these have changed substantially over recent years.

China’s political system has altered since the COVID-19 pandemic, becoming more centralized and opaque. Its economic model is transforming, as Xi plows money into advanced manufacturing, creating vast industrial overcapacity and flooding global markets in sectors such as electric vehicles. Its geopolitical relations have shifted, too, most obviously via closer ties with Russia and provision of military-linked support for Moscow over Ukraine. For the first time, China is seeking to play a significant role in reshaping Europe’s security order—and has thus become much more threatening to British core interests.

Labour has already sketched out the rough framework it plans to use to address this. In its election manifesto, it talks about a three-part approach: “We will co-operate where we can, compete where we need to, and challenge where we must.” This could, of course, mean pretty much anything, depending on where the emphasis lies among the three. Then-British Foreign Secretary James Cleverly developed a similar triptych in a speech at Mansion House in London last year, where he launched a “protect, align, and engage” strategy for Britain to protect itself from threats, align closely with allies, and engage with China on select issues. This approach was sensible, although it ended up being unbalanced, with nearly all efforts going into the “protect” portion and much less on alignment and engagement.

Whatever the policy framework, Starmer’s immediate inbox is likely to feature a range of China-related problems. He will face pressure from his party to speak up on human rights issues from Hong Kong to Xinjiang. There will be challenges related to Chinese interference in domestic affairs. There are festering diplomatic issues too, not least a simmering row over China’s plans to relocate its embassy, which has been blocked by a local London council, much to Beijing’s displeasure. Yet by far the most important twin objectives lie in pressing Beijing to limit its support for Russia in Ukraine and persuading it to reform its export-dependent economic model. Starmer will likely need to introduce tariffs on subsidized Chinese EVs, as both the United States and the EU have already done. He will in turn have to face down likely Chinese retaliation, including tit-for-tat tariffs targeting sensitive sectors, potentially including Scottish whisky.

Middle powers such as Britain cannot solve these issues alone. Starmer will therefore have to cooperate closely with Washington and other close partners in Europe and Asia. But he may also be able to find limited areas where Britain can cooperate with China. Artificial intelligence is one example. Last year’s AI Safety Summit at Bletchley Park was a rare success for Sunak, in part because he was able to persuade China to take part, which helped develop a common approach to AI safety that included both Beijing and Washington. Much the same is true on climate and sustainability. Labour’s manifesto talks loftily about turning Britain into a “clean energy superpower”—an aim that will be difficult to achieve without Chinese green technologies.

It takes two to put diplomatic relations on a more normal footing, of course. Here, Starmer should not be naive about China’s objectives. Beijing now views foreign policy overwhelmingly through the prism of great-power competition with Washington. It is thus suspicious of Britain, which it views, entirely correctly, as a loyal U.S. ally. Beijing’s main strategic aim in talking to London will thus be to tempt it away from Washington, just as it seeks to drive wedges between Washington and the EU—an obvious trap Starmer should be able to avoid. All that said, China’s recent improved relations with middle powers such as Australia and Japan suggest that Beijing is at least willing to respond to diplomatic overtures.

Here, Germany provides a useful template. In April, Chancellor Olaf Scholz undertook a strategically disastrous trip to China. He largely refused to criticize Beijing in public in an apparent attempt to win concessions behind the scenes. Unsurprisingly, he returned to Berlin with little to show for it, beyond demonstrating that a softly-softly approach to China rarely works. A better model came last month via German Vice Chancellor Robert Habeck, who also visited Beijing. Habeck spoke openly about China’s support for Russia and its economic policies, having carefully coordinated his approach with partners in Washington, Brussels, and elsewhere. But he also managed to secure China’s agreement to enter talks with the EU on EVs.

Habeck’s tough but low-key approach provides a reasonable template for Britain, which also needs to avoid the temptation to overcommunicate China policy. Truss gave plenty of high-profile speeches bashing Beijing that produced nothing useful. Instead, Labour’s audit provides a good chance to quietly re-evaluate recent changes in China’s economic and geopolitical strategy. It could also provide a chance to address the alarming lack of China expertise within the British government apparatus. London could do worse than establishing the equivalent of the U.S. State Department’s Office of China Coordination—informally known as the China House—launched to coordinate Washington’s tougher approach to Beijing. Starmer will also have to make plenty of difficult China calls, beginning with the likely EV tariffs. Even with more regular diplomatic access, the relationship is thus likely to be rocky. But a more balanced, better informed, and less comatose approach ought to be within reach.