Observing China is the essential newsletter to understand the UK-PRC relationship, explained in the context of global developments.
Since my last newsletter on 6th August, the United Kingdom’s (UK) signalling of a pivot towards Brussels has stirred debate about what this might mean for Whitehall’s relations with Beijing.
In her annual ‘State of the Union’ speech last month, Ursula von der Leyen, President of the European Commission, stated that the Brussels-Beijing trade deficit – at an eye-watering €1 billion (£836 million) per day in 2025 – has reached a ‘tipping point’. Maroš Šefčovič, European Commissioner for Trade and Economic Security, called the situation a ‘mountain of a challenge’.
However, Britain appears adamant that it will not bow to pressure from Brussels to follow suit on tariffs applied by the European trade bloc on certain products from the People’s Republic of China (PRC), in its pursuit of reviving certain economic arrangements with the European Union (EU).
Meanwhile, during the Autumn Budget announced yesterday by John Healey, Chancellor of the Exchequer, His Majesty’s (HM) Government unveiled a ‘fast-track plan’ for the construction of strategically important data centres in the UK, which includes regulations on local hires, among others. The aim is to maintain Britain’s position as the world’s third-largest Artificial Intelligence (AI) market, behind only the United States (US) and the PRC, while restricting sensitive defence and healthcare data being processed abroad.
Elsewhere, a leading Chinese AI startup made global headlines last week in reports that its founders had participated in an earlier research project partly funded by an institute that MI5 has flagged as having links to Chinese state intelligence. The reporting does not establish whether the founders were aware of the institute’s alleged intelligence connections, nor of any potential intelligence-related use of the research.