UK government is “making up China policy as it goes”, MPs warn in scathing 102-page report
The Commons Business, Innovation, Science and Trade Committee has accused the Labour government of failing to deliver the strategic, long-term approach to China it promised in 2024, warning that reactive, inconsistent decisions are putting both the economy and national security at risk.
The British government is making up its China policy as it goes along, exposing the country to economic and national security risks, MPs have warned in a new 102-page report published on Monday by the House of Commons Business, Innovation, Science and Trade Committee.
The committee, chaired by Labour MP Liam Byrne, accused ministers of failing to deliver on the promise made after the 2024 general election to implement a strategic, long-term and consistent approach to China. Instead, the report said, the government's track record has been characterised by reactivity, inconsistency and opacity, leaving businesses unable to plan and the public unsure whether safeguards are adequate.
In one of its sharpest lines, the committee said Britain must shape its own relationship with China or risk having that relationship shaped for it in Washington or Beijing. Byrne put the point bluntly, saying Britain's businesses cannot plan for the future when the government keeps making up its China policy as it goes along, and that ministers had promised clarity and consistency but delivered opportunities missed, risks unmanaged and decisions left until the eleventh hour.
The report points to a series of decisions it says illustrate the problem. Chief among them is the last-minute blocking, in March, of plans by Chinese firm Ming Yang to build a 1.5 billion pound wind turbine factory in Scotland, after years of negotiation, on unspecified national security grounds. The committee also cited the nationalisation of British Steel from Chinese ownership as another decision taken late and without a clear framework.
A second central complaint is the government's handling of its own China audit. The audit was completed in June 2025 but has never been published, the committee said, meaning Parliament, businesses and the security community have been asked to trust a strategy they cannot read. The re-engagement with Beijing, including the prime minister's visit, has therefore proceeded without a finalised strategy, in the committee's view.
The stakes are large. The committee put UK trade with China at 107.2 billion pounds and trade with Hong Kong at 32.3 billion pounds over the four quarters to the end of the first quarter of 2026, a combined 139.5 billion pounds. It warned of a tendency to prioritise diplomatic politeness over national security, exposing the country to unquantified, unmanaged risk, including the transfer of sensitive data and technologies and growing dependence on Chinese supply chains.
The report pays particular attention to connected technology in critical infrastructure. It noted that Chinese manufacturers account for up to 79 per cent of the global market for cellular internet-of-things modules, the components that let everything from vehicles to payment terminals communicate over mobile networks, and it cited a Norwegian investigation into a Chinese-made Yutong bus in which remote access to equipment connected to the battery and engine was found to be possible. Ministers should identify and progressively replace connected technology made in high-risk countries in essential services, the committee said, starting with vehicles used by government, defence and the emergency services.
To replace improvisation with rules, the committee proposed a three-tier system: a red zone of sectors off limits to Chinese trade and investment on national security and sovereignty grounds, a safeguarded middle tier where risks can be managed, and a green zone where trade should be encouraged. It also called for a ban on goods made with forced labour, urgent talks with telecoms companies to monitor data transmitted between connected vehicles and foreign manufacturers, and a tariff regime ready to deploy if China refuses to rebalance its economy, continues to subsidise its industry unfairly, or fails to offer reciprocal market access.
The committee also demanded clearer accountability: published China policy objectives, clarity about which ministers are responsible, and an annual report to Parliament on progress. The government has two months to respond formally to the report, and the committee's recommendations will now test whether ministers accept that their approach needs what the report calls a fundamental rethink.
What happens next will be watched in Beijing, Washington and Brussels as well as in London. If the government adopts the red-zone framework and the tariff preparations, it would mark a harder, more rules-based turn in Britain's China policy; if it rejects them, the committee's charge that policy is being made up as it goes will remain on the record, and businesses trading across the 139.5 billion pound relationship will be left, as Byrne warned, planning in the dark.
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