Global Trade Rebalancing Is Redrawing the Opportunity Map for UK–China Trade

At the World Economic Forum in Davos in 2026, Canada’s Prime Minister Mark Carney framed today’s global landscape as a “rupture” rather than a gentle “transition”. In his view, if middle powers are to safeguard their interests and sovereignty, they must reduce over-reliance on any single partner, strengthen strategic autonomy, and cooperate more closely based on shared values and practical interests to build a more sustainable order that can withstand economic coercion.

Canada Prime Minister Mark Carney delivers a speech at the World Economic Forum in Davos, 2026.

Shortly afterwards, Carney began a four-day official visit to China, establishing a new strategic partnership and calling for deeper cooperation in areas such as agriculture, energy and finance.

Canada Prime Minister Mark Carney meets China President Xi Jinping in Beijing.

As Canada urgently seeks to diversify trade relationships and reduce dependence on the United States, that shift carries clear symbolic weight. A similar rebalancing instinct has since been reflected in the UK’s engagement with China. UK Prime Minister Sir Keir Starmer undertook a three-day visit to China last week, the first by a British Prime Minister in eight years.

British Prime Minister Sir Keir Starmer visits Yuyuan Garden in Shanghai.

Both sides signalled a desire to move beyond a prolonged diplomatic “ice age” and to pursue new trade and investment opportunities. While no comprehensive free trade agreement was concluded, the visit marked a cautious but tangible adjustment in the economic relationship. Agreements in visas, healthcare, green energy and whisky, alongside a restart of high-level dialogue, could make it easier for UK firms to operate in China, while also encouraging more Chinese investment into the UK.

Prime Minister Sir Keir Starmer speaks at the UK-China Business Forum at the headquarters of the Bank of China in Beijing.

What major agreements were reached?

1) 30-day visa-free entry for UK nationals (effective date not yet confirmed)

China has agreed in principle to allow UK citizens to travel to China visa-free for up to 30 days. As part of the wider package, easing entry requirements is expected to support British businesses, particularly service-sector firms seeking to expand in the Chinese market. With the UK economy underpinned by a large services sector, the intention is to deepen links across healthcare, financial and professional services, legal services, education and skills.

The UK exports around £13 billion of services to China each year, and demand continues to grow. As more Chinese companies look to expand overseas, particularly into regions such as Southeast Asia, the UK services sector may find fresh opportunities. UK banks, for example, can support Chinese firms’ international expansion. UK business groups have also noted that sentiment on the operating environment in China has improved compared with recent years. In parallel, UK-based law firms operating in China could see opportunities, as some US firms scale back their presence there.

2) Key commercial cooperation

In pharmaceuticals, UK drugmaker AstraZeneca has pledged a £10.9 billion investment in China over the next four years to expand R&D and pharmaceutical manufacturing, described as its largest single investment in China to date.

In energy, Octopus Energy will enter the Chinese market for the first time, partnering with the Chinese firm PCG Power to develop a digital electricity-trading platform. The project aims to improve power-system efficiency and support China’s push to scale renewable energy. It offers a route into a vast and still-growing market at a time when demand for clean energy and digital trading tools is rising.

In consumer goods, China will cut import tariffs on whisky from 10% to 5%, with effect from 2nd February 2026. The UK government has said the agreement could deliver £250 million to the UK economy over the next five years.

In addition, during the Prime Minister’s visit to China, he met with Pop Mart CEO Wang Ning. At the meeting, Pop Mart outlined its latest expansion plans, confirming that it will open a flagship store on Oxford Street in London’s West End and establish its European headquarters in the city. Wang said the plans are expected to create around 150 new jobs in the UK.

The Prime Minister also met the chairman of the Chinese automotive group Chery, who announced that the company will locate its European headquarters in Liverpool, a sister city of Shanghai. The new Liverpool hub will support R&D, engineering and business development for Chery Commercial Vehicles (CCV), and is expected to create hundreds of jobs.

Keir Starmer, center left, and Chinese Premier Li Qiang, center right, with their business delegations at the Great Hall of the People in Beijing.

Taken together, the visit reopened channels for dialogue and sketched a workable cooperation framework. UK–China economic engagement may now enter a more pragmatic phase: beginning with business travel and trade events, then breaking cooperation into specific sectors, conducting risk analysis and mitigation, progressing to supply-chain alignment and operational coordination, and finally moving towards project delivery.

Which UK businesses should look to China?

Several categories of UK firms are particularly well placed to reassess the Chinese market:

• Branded consumer goods and premium food & drink

• Financial and professional services

• Education, vocational training and talent services

• Healthcare and life sciences

• Green, circular-economy and advanced manufacturing businesses

The two sides have agreed to launch a feasibility study for a “bilateral services trade agreement”. If that process advances, it could be significant for industries such as finance, law, consulting and accountancy. Visa facilitation, meanwhile, reduces friction for short-term visits and early-stage partnership discussions. Over the medium to long term, the most strategically important opportunities may lie in green technology, circular economy solutions, advanced manufacturing and engineering-led delivery models.

China remains in a sustained cycle of industrial upgrading and green transition. Foreign investment in advanced manufacturing, modern services and low-carbon sectors often aligns more readily with local industrial policy, park ecosystems and supply-chain demand. China’s latest Catalogue of Encouraged Industries for Foreign Investment (2025 edition) is due to take effect on 1 February 2026, with a stated emphasis on advanced manufacturing, modern services and green, low-carbon development.

For UK firms, the competitive edge is less about grand concepts and more about whether they can deliver bankable, verifiable and implementable packages, combining process and equipment, digital operations and maintenance, standards and training, carbon data and supply-chain transparency.

Within the broader context of the green transition and advanced manufacturing, CCUS (Carbon Capture, Utilisation and Storage) startups entering the scale-up phase may also find it worthwhile to include China in their market assessments. For many CCUS technology companies, the core challenge in commercialisation is not the capture performance of a single demonstration unit, but the engineering standardisation of equipment and systems, supply-chain maturity, a falling cost curve, and the ability to manufacture and deliver at volume. China’s strengths in equipment manufacturing, systems integration and large-scale production, combined with its continued growth in low-carbon investment, could provide a practical setting for faster product iteration and wider deployment.

However, this does not mean that expanding into China is a low-risk shortcut. Companies still need to assess the complexity of regulation and on-the-ground implementation, intellectual property protection and cross-border compliance requirements. A more robust approach is typically to start with tightly scoped pilot partnerships, then gradually deepen cooperation and local investment within a clear compliance and governance framework.

The challenges remain

Even so, this round of engagement should not be read as a guarantee that long-standing frictions for foreign companies in China have disappeared. Bureaucratic processes, regulatory complexity, differing enforcement practices and limited transparency can still extend decision cycles, slow delivery and add uncertainty to cross-border investment. In practice, the opportunity is less likely to reward the most aggressive market entrants, and more likely to favour those that embed compliance, risk management and governance early in their commercial strategy.

For businesses weighing China, a clear-eyed approach is essential. On the one hand, companies need a high-resolution understanding of the policy and regulatory landscape and, where appropriate, specialist advice. On the other hand, they should be cautious in partner selection and delivery pathways, avoiding the temptation to mistake short-term easing for long-term certainty. As several early movers have observed, sustainable results depend on constructive engagement with regulators and a carefully structured partnership model. Only then can firms capture durable value in the world’s second-largest economy.