By David Lawder and David Milliken
WASHINGTON (Reuters) -Britain needs to take a “hard-headed, economic realist” approach to relations with China in order to do a better job of boosting trade while minimizing risks to national security, British finance minister Rachel Reeves said on Friday.
Reeves, speaking to Reuters at the International Monetary Fund and World Bank annual meetings in Washington, said the U.S. had been able to boost exports to China while taking a tough line on Beijing’s economic and trade practices.
“They take … a hard-headed, economic realist position that there are opportunities as well for U.S. firms and working people in the U.S. to be able to export all around the world. And I want that for British businesses too,” Reeves said on her first trip to Washington since becoming finance minister.
Britain’s finance ministry is working on reviving high-level meetings with China that last took place in 2019, with Reeves considering travelling to Beijing in early 2025. Chinese state media reported that its government supported closer dialogue too.
Unlike the U.S. and the European Union, Britain has no plans to impose tariffs on Chinese-made electric vehicles.
British Foreign Secretary David Lammy visited China last week on a two-day trip during which he said the government would prioritize national security in economic ties, but that 95% of business was not in an area where that was a major concern.
Relations with China under the previous Conservative government were soured by clashes over human rights, Beijing’s crackdown in Hong Kong and allegations of Chinese espionage on British soil.
The Labour administration, which took power in July, has commissioned a government-wide audit of the UK-China relationship and has said it would be “clear-eyed” when it comes to China, given allegations of Chinese cyber-hacking and spying.
Chinese inward investment to Britain needed to be looked at on a case-by-case basis, Reeves said.
“In projects like nuclear energy, if we develop another nuclear power plant, that will not be with Chinese money,” she said. “However, there are other parts of the economy where we do welcome Chinese investment, and it can help bring additional investment and jobs to the UK.”
China is Britain’s sixth-largest trading partner, accounting for 5% of goods and services trade worth 86.5 billion pounds ($112 billion), while Britain has a 1.2% market share of Chinese trade.
“There are big opportunities for UK firms to export more and to trade with China, including financial services,” Reeves said.
Last year, Reeves said in a speech in Washington that China was “unbalancing the old global order” and had “undercut and ignored” trade rules.
Asked if she still held those views now that she was in government, Reeves said Britain should not rely on countries that did not share its values to provide its basic needs.
“My desire to build a more secure and resilient economy certainly hasn’t changed as an important part of the economic policy of this government,” she said.
($1 = 0.7708 pounds)
(Writing by David Milliken; Editing by Paul Simao)
