Even before Rishi Sunak signaled the end of a ‘golden era’ of relations with China, a growing number of Chinese firms in the UK had identified deteriorating geopolitical relations are their biggest challenge.
(Bloomberg) — Even before Rishi Sunak signaled the end of a ‘golden era’ of relations with China, a growing number of Chinese firms in the UK had identified deteriorating geopolitical relations are their biggest challenge.
Some 78% of firms polled by the China Chamber of Commerce in the UK said a ‘complex geopolitical landscape’ is the greatest threat to their operations. That’s up from 75% in 2021 and 53% in 2020, according to the body’s 2022 annual report, which was based on a survey of 79 Chinese firms carried out between July and August 2022.
One construction company surveyed said its involvement in infrastructure projects was “encountering particular scrutiny solely as a result of their links to China.” A financial services firm said increasingly negative attitudes was hurting the development of its UK business.
Prime Minister Sunak called China a “systemic challenge to our values and interests” in his first major foreign policy speech in November. Referring to a term coined by David Cameron in 2015 as he pursued closer UK-China ties, the PM said “the so-called ‘golden era’ is over, along with the naive idea that trade would lead to social and political reform.”
The report’s recommendations for Chinese companies operating in the UK include investing in the regions and renewables. It also noted that the London-Shanghai Stock Connect, which has been used by a number of Chinese companies to raise money in London, has seen no reciprocal issuance by UK firms on Chinese markets, bringing into question the long-term viability of the scheme.
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