The UK cannot afford to give China the “cold shoulder”, the city minister said on Monday, in comments that would distance the British government from the Biden administration’s protectionist approach.
Addressing financial services providers at the City Week conference at London’s Guildhall, Bim Afolami said it was “crucial” to deal with strategic rivals such as Beijing and that the UK risked losing control of its economic future if it did there is no common ground.
“As with any bilateral relationship, we do not agree on everything, [but] We clearly understand that you simply cannot turn a cold shoulder to an economy that is home to a fifth of the world’s systemically important banks, four of the world’s largest banks and almost a third of the world’s leading global financial centers. It just doesn’t make sense,” he said.
“That’s why it’s in our interest to get involved wherever we can. [It is] It is deeply in our interest to do so.”
Afolami said keeping the door open to Beijing would mean the two countries could jointly address common challenges, including the climate crisis, biodiversity loss and aging populations. “When it comes to China, we think long-term.”
He stressed that the UK “should of course only engage where it is consistent with our interests. But be clear that this is absolutely not the same as withdrawing.”
Afolami added: “If we hesitate too much – as Lord Cameron, the foreign secretary himself, noted two weeks ago – our competitors will determine our future for us.”
The City minister’s comments will help distance Britain from the policies of US President Joe Biden, who last week announced tougher tariffs on $18 billion worth of Chinese goods, including electric vehicles, lithium batteries, critical minerals and semiconductors.
The move is intended to protect U.S. manufacturers from cheap imports from China, but threatens to exacerbate trade tensions between the world’s two largest economies.
Meanwhile, the British government continues to target Beijing and Chinese companies, including fast-fashion company Shein, which is ramping up preparations for a London listing at a time when interest in the British stock market is waning.
Shein, which one of the sources said was valued at $66 billion (£52 billion) in a fundraising last year, reportedly began working with London-based financial and legal advisers to explore a stock market listing earlier this year The New York IPO encountered regulatory hurdles and resistance from U.S. lawmakers. It could be the biggest IPO in London in years.
However, concerns remain about Chinese interventions in the UK. Two weeks ago it was revealed that 270,000 payslip records for almost all members of the British armed forces had been exposed to Chinese hackers.
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Labor has said it will launch a “full review” of Britain’s relationship with China if the country wins the next election.
Britain’s competitive position on the international stage was also discussed on Monday by Julia Hoggett, chief executive of the London Stock Exchange, who continued the group’s campaign for higher executive pay.
Hoggett praised the company’s board members for going out of their way to offer bosses higher payouts this year, even though it proved unpopular with some shareholders. It follows a new wave of anger from shareholders, including at Smith & Nephew and pharmaceutical company AstraZeneca, over multi-million pound pay rises.
“We have seen … a far greater willingness by remuneration committees to engage in what I call a ‘naughty move’ by accepting that some resolutions attract more than 20% of the votes cast against them,” she said during a keynote speech at the City Week event. Companies that are objected to by at least 20% of shareholders must justify their compensation decisions and will be reported by asset management groups.
However, Hoggett suggested that more companies should get involved. “However, I remain convinced that this is more in our hands than we think. As parents, we all know that the step isn’t a step if everyone sits on it.”