The Labour government’s approach to relations with China prioritises “diplomatic politeness over the UK’s national security,” a cross-party committee of MPs has found. 

A new report by the Business, Innovation, Science and Trade Committee warned the government’s stance on the world’s second largest economy had put the UK’s security at risk. 

MPs agreed that the government should block sharing sensitive information with China while businesses should adhere to careful rules in dealing with firms from the country. 

The committee recommended that a traffic-light system in trade relations should be put in place, restricting matters related to resilience and defence from China. Some areas of the economy should have extra guidance and mitigations put in place. TechUK officials, who contributed to research, suggested that AI and semiconductor companies could benefit from clearer rules on dealing with China. 

Imports of goods made using forced labour would also be banned as current prohibitions were “not fit for purpose”, according to MPs, who added they were “disappointed” by a “lack of urgency” on addressing the issue. 

Liam Byrne, the prominent Labour figure who chairs the committee, said the government was “making up its China policy as it goes along”, adding that ministers have failed to be consistent and clear about trade-offs. 

“Ministers promised clarity and consistency,” Byrne said. “Instead, we have opportunities missed, risks unmanaged and decisions left until the eleventh hour. Britain must shape its own relationship with China, or risk having that relationship shaped for us in Washington or Beijing.”

“We should welcome trade that builds Britain’s strength. We should stop the trade that puts that strength at risk. That is how we turn engagement into growth, and growth into lasting security.”

The report said: “Low-cost, increasingly sophisticated Chinese connected technology has proliferated in the UK, in everything from smart homes to connected vehicles. This heightens the risk of dependence on Chinese supply chains, opens the possibility that hackers or state actors can remotely control or disable such devices, and creates dangers of exfiltration of vast quantities of UK data to Chinese servers where hackers and state entities may gain access.

“We are disappointed that, in failing to create a register of high-risk jurisdictions, the government has prioritised diplomatic politeness over the UK’s national security.”

The report also warned that “the Government’s stated priorities for the China relationship remain extremely high-level: to safeguard the UK’s national security, pursue economic growth opportunities, and co-operate in addressing global challenges such as health and climate change.

“These priorities have not been translated into clear policies and rules governing how the UK should engage with China.”

Government defends approach on China

Responding to the report, the government’s business department said they had put UK-China relations “on a more stable, balanced, long-term footing, and based it on a clear-eyed assessment of both the opportunities and the risks”. 

Ministers and officials’ line on China depends largely on a manifesto commitment that says: “After 14 years of damaging Conservative inconsistency over China, Labour will bring a long-term and strategic approach to managing our relations. We will co-operate where we can, compete where we need to, and challenge where we must.”

In a ‘China audit’ report last year, the government’s then-foreign secretary David Lammy argued the UK government’s approach would focus on “taking the world as it is, not as we would wish it to be”. The audit was criticised by Byrne on Monday as details were “never published” while the Foreign Office was also singled out for not having “the authority to manage cross-government coordination”.

MPs on the business committee concluded that “the Government’s decision-making record on China has lacked consistency at a time when both British and Chinese businesses have emphasised the need for predictability.

“Business cannot plan for the long term when the Government’s rules and limits are unclear.”

Andy Burnham has given little indication of his views on China and he only spoke to President Xi Jinping in September. 

Former Prime Minister Sir Keir Starmer visited Beijing in January this year, agreeing to lower Scotch whisky tariffs by half. 

The government has come under heavy scrutiny as security officials at the MI5 have urged universities to re-consider institutions with Chinese parties while parliamentarians have come under a “covert and calculated” effort by the country’s authorities in an attempt to convert them into spies.