UK Business and Trade Minister Peter Kyle, on his first visit to Beijing for trade talks since 2018, said China’s economic power makes it “unignorable,” though progress on trade depends on resolving a long-standing embassy dispute. Kyle aims to restart discussions under the UK-China Joint Economic and Trade Commission (JETCO) and hopes to lift trade barriers worth £1 billion over five years, focusing on agriculture, automobiles, and professional services. However, a decision next month on China’s plan to build Europe’s largest embassy in London could threaten these goals, as critics worry it might be used for spying.

Kyle emphasized that China’s opportunities outweigh the risks and should motivate engagement rather than deter it. The Labour government, in office since last July, is keen to strengthen economic ties beyond the EU, attract Chinese investment, and create jobs, especially in northern industrial regions.

Tensions persist over China’s “mega” embassy near the Tower of London and the UK’s plans for a new embassy in Beijing, with officials concerned about potential surveillance due to proximity to key financial districts. Kyle noted that the embassy applications are separate from government control, and stressed the need for modern diplomatic facilities to support 21st-century trade relations.

China, the UK’s third-largest trading partner and fifth-largest export market, imported £42 billion of UK goods last year. Despite challenges, the China-Britain Business Council said both sides remain committed to constructive dialogue and improving market access in sectors such as whisky, automobiles, and agriculture.