China-UK Relations Turn New Page with Raft of Deals Following Starmer Visit

The UK is the latest in a growing list of Western countries that are seeking to reset ties with China as global geopolitical tensions threaten the stability of supply chains and investment flows. Following Prime Minister Keir Starmer’s recent state visit to Beijing, the two countries reached a series of modest but symbolically significant agreements that mark a new era in UK-China relations and send a positive signal to the business community despite ongoing skepticism within Westminster. 

British Prime Minister (PM) Keir Starmer has ushered in a new era of UK-China relations by embracing a “pragmatic” approach that will seek closer trade and economic ties while maintaining distance in matters of politics and national security. 

During his official state visit to Beijing on January 29 – the first by a British leader in eight years – the PM met with President Xi Jinping and other members of China’s top brass with the aim of reviving relations following almost a decade of disengagement. 

Bringing with him an entourage of over 50 representatives from British businesses and cultural institutions, Starmer hailed a series of major “wins” for British citizens and businesses, including visa-free travel for Britons, a cut in import duties on Scottish whisky, and billions of pounds worth of investment deals. 

Xi echoed the positive sentiment, stating that the meetings “open a new chapter of cooperation” that will “benefit both the people of the two countries and the world”. Noting that 2026 marks the start of China’s 15th Five-Year Plan, Xi also urged further cooperation in areas such as education, healthcare, finance, and services, as well as expanding joint research in artificial intelligence, bioscience, new energy, and low-carbon technologies. 

Notwithstanding the modest scope of deals reached, Starmer’s trip marks an important turning point in the bilateral relationship and signals positive momentum for businesses of both countries by laying the groundwork for broader agreements in the future.

Visa-free travel for UK citizens to China

During his visit, Starmer announced that he had secured visa-free entry for British citizens to China, enabling up to 30 days of travel in the country without having to first apply for a tourist visa.

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UK citizens would normally have to apply for a tourist visa in their place of residence abroad before traveling to China, or avail of one of China’s short-term transit visas, though these are valid for shorter periods of time and are only issued under specific circumstances. 

Since 2023, China has implemented a unilateral visa-free policy for citizens of certain countries in an effort to boost inbound tourism following the COVID-19 pandemic. The policy was recently extended to the end of 2026 and now covers a confirmed 48 countries. 

At the time of writing, the Chinese side has not yet officially confirmed the expansion of the visa-free policy to the UK; however, the meeting readout from the Ministry of Foreign Affairs (MoFA) states that “the Chinese side is willing to actively consider implementing unilateral visa-free entry for the UK”. A similar announcement was made following Canadian PM Mark Carney’s visit to China earlier in January, but this has also yet to be officially implemented by the Chinese side. 

Reduction of import duties on Scottish Whisky 

In a press release issued on January 30, Downing Street stated that China has agreed to cut tariffs on whisky from 10 to five percent, which it claimed would be add an estimated £250 million (US$342.5 million) to the UK economy over the next five years. This has been confirmed by the Customs Tariff Commission (CTC) of the State Council, with the provisional rate taking effect February 2.

China has previously implemented a five percent import tariff on whiskies, which is half the most-favored nation (MFN) rate. However, the 10 percent MFN rate was restored in the CTC’s 2025 Tariff Schedule, meaning whiskies have been subject to the higher rate since January 1 of that year. 

China offers major growth potential for whisky makers as rising income levels and changing lifestyles foster a new generation of enthusiasts. However, shipments from the UK fell sharply in 2024 – recording a 31.2 percent drop from 2023 – and failed to recover in 2025, likely due to the opposing pressures of high inflation in the West driving up production costs and deflationary trends in China dampening demand for premium products. The tariff cut could provide a boost to UK distillers by cutting prices for Chinese consumers. 

Expansion of market access and investments 

According to Downing Street, the visit by the business delegation helped to secure “billions of pounds worth of export and investment deals for the UK”, which include £2.2 billion (US$3 billion) in export deals worth and around £2.3 billion (US$3.2 billion) in expanded market access over five years, as well as “hundreds of millions worth of new investments”.

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Under one of the confirmed deals, Pop Mart – the maker of the viral collectible Labubu doll – will establish its regional hub in London as well as seven stores in the UK, creating over 150 UK jobs, according to the government. 

Additionally, the Chinese car maker Chery has confirmed it will establish its European headquarters in Liverpool, while the Chinese battery maker HiTHIUM has pledged a £200 million (US$274 million) investment in energy storage in the UK, creating 300 jobs.  Asymchem, a Chinese pharmaceutical CDMO, have also announced an expansion of UK operations, adding 150 high-skilled jobs over the next five years. 

A number of UK companies have also announced new investments and joint ventures in the Chinese market. These include the pharmaceutical company AstraZeneca, which has committed a £15 billion (US$20.6 billion) investment to expand R&D programs in China, and the Welsh supplements manufacturer Cultech, which is entering into a partnership with China Resources to generate £90 million (US$123.3 million) in exports. On January 30, the British energy company Octopus Energy Group, whose CEO was part of the business delegation, announced a joint venture with the Chinese investment company PCG Power.

In the last year Glasgow Prestwick Airport has also opened three direct cargo routes to China, which is worth £76 million (US$104.1 million) in new business and support exports of Scottish goods such as salmon and seafood, according to Downing Street.  

China was the UK’s seventh largest export destination and second largest source of imports for goods in 2024.1 While bilateral trade has seen healthy growth since the COVID-19 pandemic, year-on-year flows have been volatile with significant swings recorded in recent years. Two-way trade in goods grew to a high of £103.3 billion (US$127.7 billion) in 2022, according to the UK’s Office for National Statistics (ONS), jumping almost 20 percent from the previous year, but has declined in subsequent years. UK exports to China also surged to 31.8 billion (US$39.3 billion) in 2022 but have slumped in the years since, falling to just under £20 billion in 2024 – equivalent to pre-pandemic levels.  

While bilateral trade has fallen over the past three years, UK-China foreign direct investment (FDI) flows have been on an upward swing. In 2024, the UK’s total FDI stock in China reached £16.5 billion (US$21.8 billion), increasing £7.3 billion (US$9.6 billion) from 2023. This huge jump in the UK’s FDI position in China can be partly attributed to the closing of major deals in 2024, such as AstraZeneca’s US$1.2 billion acquisition of the Chinese biopharma company Gracell Biotechnologies. 

While specific figures are not yet available, China’s Ministry of Commerce has reported that UK FDI flows into China increased by 15.9 percent year-on-year in 2025, showing that the momentum is continuing. 2026 is likely to  see further increases thanks to the raft new deals announced in recent days. 

Resetting UK-China relations 

While Starmer’s visit did not give rise to any broader bilateral trade or investment agreements at this time, the trip marks an important turning point in UK-China relations. 

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The two countries have had a frosty relationship ever since fallout from the 2019 Hong Kong protests ended the “golden era” of relations that date back to the handover of the territory in 1997. In the years since, subsequent governments have adopted an increasingly China-skeptic stance and strived to dismantle Chinese investments in UK critical infrastructure and cut cultural and diplomatic ties under the guise of national security.

UK-China relations have warmed since Starmer took office in mid-2024, with a regular stream of meetings and dialogues taking place between senior government figures over the last 18 months. A year before Starmer’s Beijing trip, the UK Chancellor of the Exchequer Rachel Reeves met with Chinese Vice Premier He Lifeng in Beijing where they jointly chaired the UK-China Economic and Financial Dialogue, an initiative that until then had been inactive for six years. In a June 2025 visit to the UK, senior CCP official Yuan Jiajun met with National Security Adviser Jonathan Powell and attended a series of business-focused events. Powell later visited Beijing where he met with Chinese Foreign Minister Wang Yi. 

Starmer’s official visit to China has cemented the UK’s new trajectory. Speaking at a House of Commons debate on February 2, he stated that the UK is ending its period of isolationism by pursuing closer ties with China and other trade partners, calling the years of distancing from China “eight years of missed opportunities”.

Beyond business deals and visa-free travel, Starmer’s trip to China, which he has taken in defiance of intense criticism at home, has resulted in the revival of several platforms for cooperation, including the resumption of bilateral security dialogues, the establishment of the China-UK Financial Working Group, and the formation of a high-level bilateral climate and nature partnership.

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In his address to the House of Commons, Starmer also claimed that China has agreed to lift sanctions on six sitting UK parliamentarians that were imposed in 2021. As of writing, this has not been officially confirmed by the Chinese side and will apparently not be granted in exchange for the reciprocal lifting of sanctions that the UK has placed on Chinese officials. 

The renewal of active bilateral relations is heavily focused on trade and investment opportunities, giving a positive signal to businesses in both countries. Starmer and his government has emphasized a “pragmatic, careful and confident relationship with China” that will seek to silo trade and economic cooperation from ongoing national security and political concerns.  

Nonetheless, Starmer has previously insisted that the UK is not returning to the “golden era” of relations, indicating certain areas of relations could remain strained. Speaking to the House of Commons, he underscored that national security is “non-negotiable” and that the government remains “clear-eyed about the threats coming from China in that regard”. Moreover, the enduring prevalence of China skepticism in Westminster, and in particular among opposition parties, means that any future deals are likely to come under intense domestic scrutiny. Sustained pressure at home could also sway the government to take a sterner stance on certain issues – such as Chinese investment in critical infrastructure – raising the risk that possible diplomatic tensions could spill over into economic matters.

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