‘Very low bar’: analysts say Starmer faces slim pickings in China | Chinese economy

Keir Starmer’s visit to China is being billed as an attempt to revive diplomatic relations, but experts have warned that the chances of the prime minister striking a meaningful trade deal are slim, eight years after Theresa May paved the way for an “ambitious” post-Brexit deal that has never been implemented.

The visit to Beijing, which includes a delegation of British companies led by Starmer, chancellor Rachel Reeves and trade minister Peter Kyle, will be the first since a May 2018 visit and will revolve around joint trade and investment efforts.

Downing Street is already treading a delicate diplomatic path; He suggests that issues such as human rights violations, national security or the imprisonment of 78-year-old British pro-democracy campaigner Jimmy Lai in Hong Kong will be raised, while the main focus will be on trade and economic links between China and the UK.

Starmer also said before the flight that this was not about Donald Trump, who threatened Canada with 100 per cent tariffs if it “makes a deal with China”.

In an interview with Bloomberg, the prime minister said China would bring “significant opportunities” for British businesses and insisted he would not be forced to choose between China and the US.

Senior executives of banks and financial services companies, as well as some carefully selected small and medium-sized businesses, are expected to join the trip, along with a delegation from Rolls-Royce, which already has a joint venture with Air China on aircraft engine services.

Starmer will also be under pressure to ensure that China picks up the tab for British Steel in Scunthorpe, which the British state seized control of last year to prevent Chinese firm Jingye from closing the plant.

Sam Goodman, senior policy director at the China Strategic Risks Institute, believes the “bar” for a successful Starmer trip is “very low” and could mean “a series of MOUs” [memorandum of understanding]” on the promise of new investment in financial services and perhaps the auto industry.

Andrew Small, another China watcher and former European Commission adviser, says Beijing is unlikely to provide the economic support Labor wants because margins are disappearing in an overheated economy.

“There’s a sort of South Park panty quality to every single statement from anyone in the UK government about all of this,” says Small, referring to the three-step business plan for the panty-stocking operation in the satirical US cartoon. The first step was to buy the panties, then do nothing but the profit would magically increase.

“You still have this weird overhang of seeing China as an economic opportunity. And if we can figure that out and it’s a major economy and it’s still growing in all these kinds of things, if we just completely move away from the fact that there are very marginal gains to be made in a few areas,” says Small, director of the Asia program at the European Council on Foreign Relations.

Other countries in Europe have also seen their trade dependence on China pose major risks, and figures from the last eight years show China has the upper hand in relations with the UK.

China racks up a record trillion-dollar global trade surplus in 2025 despite Trump’s tariffs.

In the case of the UK, its trade deficit with China has more than doubled from £17bn in 2018, at the time of the May visit, to £42bn by the end of the second quarter of 2025.

“It is trending downward in terms of opportunities and economic benefits,” Small says.

China has demonstrated a willingness to use trade to advance its foreign policy, but its foreign investment policies also see risk mitigation in unexpected ways; this may affect any decisions regarding trading in the UK.

In December, Chinese luxury electric car brand Zeekr delisted from the New York Stock Exchange after just one year, citing an “increasingly complex economic environment.”

Goodman said China wants its companies to be listed in Hong Kong, pointing to the possibility that Shein, which is considering listing on the London Stock Exchange, will now list there.

There are also questions about the asymmetrical quality of China’s investments in the UK and whether they provide jobs.

Small notes that Xi Jinping’s sense of power has only increased in the past year, as his success in confronting Trump on the tariff war gave him a sense of vindication that he could impose export restrictions “without pushback” and that he felt emboldened to use trade as a weapon “quite openly.”

In other words, doing business with China is now a double-edged sword.

In an unpublished paper for the Center for State Administration and National Security at King’s College London, as part of his ongoing work for the Cabinet Office, Goodman cites eight tactics employed by China that weaponize its trade relationships.

These include import bans and anti-competitive investigations into French brandy producers, Google and Nvidia.

Last year, China brought global car production to a near halt after imposing an export ban on Nexperia chips used in Germany, Mexico, the UK and Japan due to a dispute with the Dutch government.

In terms of its relations with foreign countries, “Foreign businesses are seen as fair game and a useful pressure point for China,” Goodman says.