It would be ‘very foolish’ for Britain to disengage with China, Rachel Reeves has said as she attempts to draw a line in the sand with the US over their treatment of Beijing.
The Chancellor told The Telegraph she wanted to look for a deeper partnership with China, rather than creating new barriers.
She added that she would be happy to ride in Chinese-made electric vehicles and has backed fast fashion brand Shein floating on the London stock market.
It comes amid calls to block Chinese companies from running vital industries, after Chinese company Jingye moved to close two blast furnaces in Scunthorpe.
Instead of pushing China away, Ms Reeves is now determined to build bridges following the row that erupted after the government took control of British Steel.
The move puts the Chancellor at odds with the United States and President Trump, ahead of a trip to Washington next week for talks on a US-UK trade deal.
This week, the President announced that China’s retaliatory actions over tariffs would see the country face a 245 per cent tariff on imports to the US.
This includes a 125 per cent reciprocal tariff, a 20 per cent tariff to address the fentanyl crisis, and Section 301 tariffs on specific goods, between 7.5 per cent and 100 per cent.
Rachel Reeves has called for closer ties with Beijing, despite calls from the US for allies to limit dealings with China
The Chancellor’s visit, during which she met Chinese vice-premier He Lifeng, is the first high-level economic meeting between Britain and China since 2019
Labour have pinned hopes on improving economic ties with Beijing as part of Ms Reeves’ scramble to kickstart the UK economy
The Trump administration plans to use the threat of tariffs to pressure trading partners to limit dealings with China, The Wall Street Journal reported.
Washington is also pushing allies not to allow Chinese firms to relocate to avoid tariffs and not to absorb cheap Beijing-made industrial goods.
Earlier this year, Ms Reeves was accused of making Britain a ‘laughing stock’ securing a pitiful £600million from her visit to China.
The Tories said the Chancellor had ‘come back with next to nothing’ from her trip.
Ms Reeves was still celebrating the deal and the money which would be used to boost the British economy.
She added: ‘I was in China earlier this year as part of an economic and financial dialogue. I had with me some of the biggest UK financial services firms, so HSBC, the London Stock Exchange Group, Standard Chartered, Prudential.
‘Those sorts of arrangements are clearly in the UK national interest and that’s how I will approach trade talks or financial dialogues with any country in the world.’
Since Labour took office, Ms Reeves alongside Ed Miliband, David Lammy and Douglas Alexander have all visited China.
Sir Keir became the first Prime Minister in years to hold a phone call with Chinese premier Xi Jinping shortly after he took office and it is understood a visit by the Labour leader could be on the cards in the future.
US President Donald Trump has imposed 245 per cent tariffs on China
Rachel Reeves is set to meet US Treasury Secretary Scott Bessent in Washington next week
A meeting between the two countries in January in Beijing, where it was agreed that Ms Reeves will host He Lifeng, the Chinese vice-premier, in London.
Attempts by Shein to float on the UK stock market have led to controversy, amid allegations the use of forced labour in its supply chain, which the company denies.
The Chancellor said it is for the Financial Conduct Authority to decide, but added that she did want to welcome new listings onto the London Stock Exchange
Asked whether she would back a float if signed off by regulators, Ms Reeves added: ‘We have lost business and we have lost companies in recent years and we’re working closely with the London Stock Exchange to make the UK a more vibrant place to list.’
Ms Reeves also said she would happily ride in a Chinese-made electric car, despite concerns about the risk of spying from Beijing.
She pointed out that London taxis are currently produced in Britain by a Chinese company.
Ms Reeves did clarify however that Chinese investment would be blocked from areas of critical national infrastructure.
Chancellor of the Exchequer Rachel Reeves visiting the British Steel site in Scunthorpe
Chinese fashion company Shein has been criticised for using forced labour in its supply chain
Earlier this week the Chinese embassy criticised MPs for their ‘arrogance and twisted mindset’ over the move.
Another potential problem is plans by China for a new ‘super embassy’ near the Tower of London. President XI has lobbied for planning approval, however concerns about national security have but the project in doubt.
Next week, the Chancellor will be in Washington to meet G20 finance ministers and will have a face-to-face meeting with US trade secretary Scott Bessent.
Ms Reeves said she was still pushing the US to remove the 10 per cent blanket tariff on UK goods imports in the deal, despite speculation to the contrary.
