My Lords, the 2025 UK-China Economic and Financial Dialogue was the first since 2019. The Chancellor was joined by the Governor of the Bank of England, the chief executive of the Financial Conduct Authority, and representatives from Britain’s financial services firms. The dialogue unlocked agreements worth £600 million over the next five years, and secured new agreements on vaccine approvals, fertiliser, whisky labelling, legal services, automotives, and accountancy. In financial services, co-operation was agreed in areas such as capital markets, pensions and sustainable finance. The Chancellor also raised areas of concern to the UK, including trade imbalances, economic security, Russia’s illegal war in Ukraine, and human rights.
My Lords, I thank my noble friend the Minister for his response. I congratulate the Government on breaking the hiatus in the dialogue, which lasted for a long period of five years. Does my noble friend agree with me that the UK indisputably has a world-class financial services industry, which has delivered one-third of the service exports to China? Will he outline what is proposed by the Government to strengthen the relationship between China and the UK in financial services?
I am grateful to my noble and learned friend for his question. He is right: this was the first economic and financial dialogue since 2019. The Chancellor was absolutely clear that we cannot ignore the fact that China is the second-largest economy worldwide, and our fourth-largest trading partner. He is right that financial services are the jewel in the crown of our relationship with China. That is why our financial services were the key focus of the Chancellor’s visit, which secured significant outcomes in terms of a new green bond, new commercial licences and quota allocations, the UK-China wealth connect, and capital markets and financial regulatory co-operation. That co-operation will continue and be strengthened.
My Lords, could the Minister tell us whether the dialogue included a discussion of BRICS Pay? This is the alternate payment system that the BRICS countries have created in order to be able to move away from SWIFT. Obviously, it assists sanctions- busting, and it potentially destabilises the global financial system. What discussions were held on BRICS Pay?
I am aware of the issue raised by the noble Baroness, but I do not believe that discussions took place on that. The Government consider that it is up to each individual country to decide what international agreements it wants to be part of.
My Lords, does the Minister believe that there are any risks at all involved in importing large numbers of electronic vehicles manufactured in China, which would plug the gap in the falling number of Tesla vehicles that are being purchased in the UK?
The Government are committed to attracting investment into the UK to support our world-leading energy ambitions. Investment in the energy sector is subject to the highest levels of national security scrutiny, and we will not hesitate to use our powers to protect national security wherever we identify concerns.
My Lords, what assessment have the Government made of the potential risks associated with increased economic engagement with China? What strategies are in place to safeguard against such vulnerabilities?
I am grateful to the noble Baroness for her question. We must, and will, continue to engage with our international partners on trade and investment to grow our economy, while ensuring that our security and values are not compromised. That means finding the right way to build a stable and balanced relationship with China, one that recognises the importance of co-operation and addressing the global issues that we face, competing where interests differ and challenging robustly where we must.
Given the global financial and AI sector impacts of DeepSeek, what discussions were had about IP exfiltration as part of the national security discussions that the Minister has mentioned?
I note my interest as president of the China-Britain Business Council and as having other China interests. Does the Minister agree with me that in total there are some £40 billion of UK exports going to China each year, including to Hong Kong, and those support 400,000 UK jobs? While the EFD marks a very important re-engagement with China, will he confirm that there will be other ministerial engagements at the top level, including Trade Ministers, to support British business growth?