Starmer Wants UK Plc to Win Over China’s Xi Without Annoying Trump

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Beyond the geopolitics, Starmer is presiding over an economy where consumers, feeling squeezed by inflation and concerned about job security, are warming not only to cheap Chinese imports available on e-commerce sites like Temu and Shein, but to higher-priced items that compete with US and European producers.

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Unlike the US and the European Union, Britain has no punitive tariff on Chinese electric vehicles. As a result, it has become a leading destination for new models from BYD Co. and Chery Automobile Co., which are rapidly gaining market share against competitors like Tesla Inc.

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BYD Boom

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BYD nearly quintupled its sales in the UK last year, registering more than 51,400 new cars and pulling ahead of both Tesla, whose sales fell almost 10%, and BMW AG’s British marque Mini.

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MG, the legacy British brand owned by China’s SAIC Motor Corp., had an even better year, selling more than 85,000 new cars. That was more than Land Rover and only just shy of the number of Toyotas registered in the UK.

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“Almost all the brands are here, so all have a place in this market,” Victor Zhang, Chery’s UK director, said in an interview. “This is also good for consumers” who are embracing the vehicles not just for their affordability but also their reliability and brand perceptions. 

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He said Chery wants to broaden its reach to 130 or 140 dealerships in the UK this year from about 100 currently, including an expansion in Northern Ireland.

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Starmer will hope this openness, and his government’s decision to approve China’s new embassy in London, ultimately help Britain’s services sector, said David Henig, director of UK trade policy at the European Centre for International Political Economy. “That, however, is probably the limit to what can be achieved given the risks of US wrath and domestic concerns centered around security.”

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It’s not just autos. Shop online in the UK for a new smartphone on Argos, a unit of J Sainsbury Plc, and you’ll find Apple iPhones and Samsung models alongside much cheaper offerings from Xiaomi Corp., the Hong Kong electronics company initially banned in the US on national-security grounds before being given a reprieve.

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No such stigma against Chinese products exists among many British consumers. Apple and Samsung still dominate but Chinese competition is intensifying.

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“In the UK market, consumers are welcoming any good brand that gives them high quality and value for money,” said Celine Tang, retail and e-commerce sector lead with the China-Britain Business Council, a group that promotes UK-China trade and investment.

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As Chinese manufacturers transition from little-known mass-producers of goods to distinct international brands on par with established leading names, British consumers are an ideal market because its shoppers “are always looking for other options and alternatives,” she said.

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In the US over the past decade, China’s rising bilateral trade imbalance was the chief catalyst of a bipartisan backlash that helped give rise to Trump’s protectionist trade policies. 

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By contrast, the UK remains largely open to Chinese trade despite a growing deficit driven by phones, computers and cars. China is gaining on Germany as the largest single source of Britain’s imports.

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Recently, UK public opinion has warmed toward China, according to YouGov polling released over the weekend. Its Jan. 21-22 survey showed the share of respondents who view China as a friend or a friendly rival rose to 27%, up from 19% in an October survey. The only other country from a list of 15 that showed any noticeable move was the US, whose friendliness factor fell to 52% from 69%.

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It’s unclear what Starmer will bring home from the trip. He could ask for Chinese investment in a popular, job-producing industry such as cars or battery manufacturing, though that may risk the ire of the White House.