How to do business with China

Amid reports of Chinese spies in Westminster, we learn that Huawei – the telecoms manufacturer western governments shun for fear of cyber espionage – has launched a smartphone containing microchips more advanced than anything China was previously thought capable of making. Some analysts say China is now ahead of the US in tech fields ranging from AI to robotics, while, in the auto sector, BMW chief executive Oliver Zipse (announcing plans to make electric Minis at Cowley from 2026) described Chinese electric carmakers with improved battery technology as an ‘imminent threat’ to his industry in Europe.

In response, Rishi Sunak – after a brief and no doubt deeply oblique meeting with Chinese Premier Li Qiang at the G20 summit – defended dialogue with Beijing, not least because it had allowed him to express ‘strong concerns’ about the spy story. Business Secretary Kemi Badenoch added that without access to Chinese technology: ‘We wouldn’t be able to get to where we want to get to on net zero.’ Backbench warrior Sir Iain Duncan Smith, in contrast, warned against ‘thinking about China as a business problem’ when the reality is a sinister geopolitical threat.

Who’s right? Is the pursuit of trade with the world’s second economic power an obvious necessity and the only path to grown-up bilateral relations? Trade in this context inevitably means vastly more Chinese goods in our markets than UK goods or services in theirs, but that’s a challenge facing ‘global Britain’ everywhere. Until the day China attacks Taiwan, opinion will divide over engagement vs stand-off – unlike Russia where, as I wrote recently, every western firm is under pressure to withdraw. But then Russia, if we can live without its gas, has nothing the West needs.

So what advice can I offer those well-meaning City ambassadors who trek back and forth to China – in the mode of the late Sir David Brewer, a jovial former lord mayor who made more than 100 expeditions in search of insurance biz? Be acutely sceptical of everything you’re told, leave your mobile and laptop behind – and pack a very long spoon.