A review of Britain-China relations will be postponed until the Prime Minister visits Beijing for the first time next month, the Guardian has learned, amid a spat over an alleged spy who befriended Prince Andrew.
Rachel Reeves is set to visit China in early January as part of the Labor government's charm offensive. The visit will focus on financial services and Municipal Affairs Minister Tulip Siddique will accompany the prime minister.
This will raise fears among China hawks that ministers will resist pressure to bring business dealings with China under greater scrutiny.
Such pressure intensified after the removal of businessman Yang Tengbo, who ran the Duke of York's Pitch@Palace project in China and who security officials say has ties to an arm of the Chinese state. On Monday, Yang asked a court to lift the anonymity order so he could challenge the “baseless” allegations against him, insisting he was not a spy.
As part of Labor's manifesto commitments, the government is carrying out a cross-Whitehall audit of the UK's relationship with China, which was originally due to be published at the same time as Mr Reeves' visit.
However, a Foreign Ministry official confirmed that the audit had been postponed to this spring. Only some of the findings will be made public.
Two sources familiar with the review said they expected the review to make policy recommendations such as improving the government's ability to deal with China.
Ministers are under pressure to declare China a threat to national security by including it in the “enhanced” phase of a new system for registering foreign lobbyists. But banks and other financial services companies are concerned about the impact this will have on their operations.
The Foreign Influence Register is part of security law reforms announced by the previous Conservative government, requiring people working for foreign governments to declare their role or face criminal prosecution. Similar systems have been introduced in the United States and Australia.
There is a basic declaration level, called the political influence layer, and an enhanced layer for countries deemed to be a threat to national security, which likely includes Russia, North Korea, and Iran.
MI5 and Home Office officials are said to believe it is important to also designate China as an increased risk. Former security minister Tom Tugendhat said on Monday that security services were “very clear” that without it the plan was worthless.
No10 sources said Mr Starmer had not yet made a decision but instinctively believed he would not do anything that would stifle growth or prevent a easing of relations with China.
People who worked in the Treasury and Home Office under former Conservative chancellor Rishi Sunak said the plan was almost ready to be announced just before he called a general election this summer. spoke. The strengthened tier includes China.
A former government official said it was up to Mr Starmer to decide how to designate China. They said Mr Sunak had “sent to his side” but the election was called just as the Treasury was preparing relief measures.
“When HMT [the Treasury] We don't want anything to happen, but we're very good at throwing sand in the car and slowing things down,” the source said. “They were trying to figure out how to do it in a way that didn't destroy the City.”
Another Conservative Party official said: “It took a lot of work between the Home Office and the Treasury to get to the point where we could make an announcement…External concerns weren't necessarily fully resolved.In the end… Decision of the relevant minister.
“What's happening now is that Treasury is still holding that policy on hold because the Treasury wants to make sure that concerns about financial services that have ties to China are protected… The Treasury, as an investor, will have a lot of external representation, and this will continue.” [had] It has an atrophic effect. ”
Whitehall officials expect the China designation to not be resolved until the spring, with the system becoming operational in the summer. Security Minister Dan Jarvis has promised to enact regulations in parliament in the new year, saying the plan is “not ready to be implemented as claimed”.
A former cabinet minister involved in the debate over the system under the Conservative government said there was strong opposition within the Treasury and suggested officials would raise similar concerns under a Labor government. “The Home Office, as usual, didn't think twice about it. You can't say that people who come to China for talks have to fill out paperwork and prove that they're not spies,” they said. said.
“The question is whether the UK wants to grow. They need to realize that China is not the same as Russia. It is right for the UK to take a balanced approach to China, the world's largest It's one of the largest economies in the world, and it's very powerful. Despite the rhetoric, that's exactly what Americans do.”
The Chinese Embassy in London on Monday accused some MPs of having a “twisted mentality towards China” and said “anti-China claims” were “defaming China and threatening the Chinese community in the UK”. “This is an attempt to target China and undermine normal people-to-people exchanges between China.” And England.”
