Last November, UK Prime Minister Sunak delivered his inaugural foreign policy speech, asserting that the "golden era" of UK-China relations had come to an end. He criticized the strategies of previous UK governments towards China and firmly opposed a short-term gains approach in policies concerning China.
Sunak's predecessor, the UK's third female Prime Minister Truss, had consistently advocated for China to be directly labeled as a "threat" in the UK's comprehensive defense and security review.
However, with the looming possibility of a UK economic downturn this year, the government has been subtly adjusting its stance on China.
In March, the UK government released its latest comprehensive review of defense, security, development, and foreign policy. The report identified China as a "systemic challenge" rather than the "threat" terminology that Truss had advocated for.
The report suggested that while China poses systemic challenges to almost every aspect of national life and government policy in the UK, the direction of UK-China relations isn't set on a predetermined course. The UK's approach will encompass protecting national security, strengthening alliances, and engaging with China.
Regarding engagement, the report emphasized the UK's intent to maintain an "open, constructive, predictable, and stable relationship" with China. While ensuring that the UK's critical supply chains aren't overly dependent on China and safeguarding national security, the Sunak administration believes that a "positive trade and investment relationship" with China would be mutually beneficial.
Before the report's official release in February, UK Foreign Development Minister James Cleverly met with Chinese officials during the Munich Security Conference, expressing a desire to enhance mutually beneficial cooperation with China.
In April, during a foreign policy speech in the UK Parliament, Cleverly called for establishing a "robust, constructive" bilateral relationship with China. By the end of August, Cleverly visited China, marking the first visit by a UK Foreign Minister to China since July 2018.
Building on these developments, European edition of Political News reported on October 16, citing information from UK government officials, that the Sunak administration is quietly formulating plans to restart key trade dialogues with China after a five-year hiatus.
The source revealed that the Sunak administration is considering several options to enhance economic ties with China, with the resumption of ministerial-level trade dialogues being one of them.
One option is to restart the UK-China Joint Economic and Trade Commission (JETCO) talks, established in 1996. The JETCO meetings, which previously occurred annually and involved ministerial-level officials and top business executives from both countries, were suspended due to deteriorating UK-China relations over the Hong Kong issue. The last meeting took place in 2018.
One UK official noted that Cleverly's August visit to China laid the groundwork for normalizing economic relations between the two countries. Another official hinted that if the JETCO meetings were to resume, they might initially involve deputy ministers rather than ministers.
This isn't the first time the UK government has planned to restart the JETCO meetings.
Before stepping down, former UK Prime Minister Johnson had planned to restart trade dialogues with China in early 2022, when Sunak was the Chancellor of the Exchequer.
Johnson's planned dialogues included the JETCO meetings, and it was revealed that Johnson personally pushed for the resumption of these meetings.
Back then, as Chancellor, Sunak also sought to restart the UK-China Economic and Financial Dialogue, established in 2008 but not held since June 2019. Officials at the time said Sunak was keen to resume the dialogue in 2022 and was concerned about the UK potentially adopting a tougher stance on China.
However, Johnson and Sunak's plans faced opposition from hardline Conservative MPs. Johnson, already facing criticism for attending parties during COVID-19 lockdowns, resigned as Prime Minister and Conservative Party leader in July of that year, and the plans to restart trade dialogues with China were shelved.
Truss, who succeeded Johnson as Prime Minister and held a tough stance on China, continued to label China as a threat to the UK even after her brief 49-day tenure. She urged Sunak not to restart the JETCO meetings and the UK-China Economic and Financial Dialogue.
Similar to when Johnson planned to restart trade dialogues with China, if recent reports are confirmed, the Sunak administration will also face significant pressure from hardline Conservatives.
For Sunak, reviving the UK economy is crucial for his tenure as Prime Minister. The UK is China's third-largest trading partner in Europe, its second-largest investment destination, and its third-largest source of foreign investment. China is the UK's largest trading partner in Asia. In 2022, bilateral trade between the UK and China reached $103.3 billion.
In his New Year's address this year, Sunak made five promises to UK voters: to halve the inflation rate to 5.3% by year's end, achieve economic growth, ensure a reduction in national debt, reduce waiting times for the National Health Service, and combat illegal immigration across the English Channel.
By the end of September, UK media assessed Sunak's ability to fulfill these promises. Except for combating illegal immigration, the other four promises are in doubt.
In particular, there's uncertainty about halving the inflation rate. The Bank of England predicted in August that the UK's inflation rate would drop to 5% by year's end. However, unexpected wage growth might slow the decline in inflation.
The UK's Consumer Price Index (CPI) rose by 6.7% year-on-year in August, a slight decrease from July's 6.8%. Influenced by the unexpected cooling of inflation data, the Bank of England announced a pause in interest rate hikes.
Achieving economic growth by year's end seems even more challenging. The UK's GDP fell by 0.5% month-on-month in July, exceeding the expected 0.2% decline and marking the largest drop since December 2022. The service, construction, and manufacturing sectors all contracted.
The country's economy rebounded slightly in August, with a month-on-month GDP growth of 0.2%. However, contractions in the manufacturing and construction sectors were more significant than expected, and the GDP rebound mainly benefited from school reopenings and the service sector. There are still concerns that the UK's economy might enter a recession in the third quarter.
Ruth Gregory, Deputy Chief UK Economist at Capital Economics, believes the UK's GDP rebound in August was mainly due to short-term factors. She still predicts negative growth for the UK economy in both the third and fourth quarters. Two consecutive quarters of negative growth would mean the UK is in a technical recession.
Recent polls show that Sunak's ruling Conservative Party continues to trail the opposition Labour Party in popularity. A survey released last weekend by polling firm Opinium Research showed Labour's support rate rising further to 44%, up two percentage points from the previous week, while the Conservatives remained at 28%.
UK media widely expects Sunak to announce general elections in November 2024.
