UK–China Trade Relations: What This Means For Procurement and Supply Chains

The UK has taken a significant step towards strengthening its economic relationship with China, securing a series of trade and investment agreements worth billions during Prime Minister Sir Keir Starmer’s visit to Beijing.

The four-day trip marked the first visit by a British Prime Minister to China in eight years and signals a deliberate effort to reset relations with the world’s second-largest economy, despite growing geopolitical pressure from the United States.

A renewed focus on trade and growth

Meeting with Chinese President Xi Jinping on January 29, 2026, both leaders committed to building a more stable, long-term strategic partnership aimed at boosting trade, investment, and collaboration in key sectors.

Sir Keir Starmer emphasised that economic growth at home is closely tied to how the UK engages with major global markets, particularly as businesses look to expand supply chains and access new opportunities internationally.

The Prime Minister was joined by a large delegation of almost 60 British businesses and cultural institutions, underlining the commercial importance of the visit and the government’s intention to translate diplomacy into tangible economic outcomes.

Implications for procurement and supply chains

Several of the agreements reached have direct relevance for UK procurement professionals.
One of the most notable outcomes is the reduction of Chinese tariffs on Scotch whisky. Duties are set to be halved; a move expected to generate hundreds of millions of pounds in value over the next five years. For buyers and suppliers, this means lower landed costs, improved margins and greater competitiveness for UK distillers operating in a fast-growing consumer market.

In pharmaceuticals, AstraZeneca’s announcement of a multi-billion-pound investment to expand research, development and manufacturing operations in China highlights deeper supply chain integration between the two countries. For procurement teams, this raises important considerations around supplier risk, regulatory compliance and sourcing strategies as reliance on Chinese production capacity increases.

The energy sector also featured prominently, with Octopus Energy partnering with China-based PCG Power to launch a digital electricity trading platform. The collaboration reflects China’s dominant position in renewable manufacturing and presents opportunities to reduce costs across UK energy procurement, particularly in solar, wind and battery technologies.

Renewables, net zero and strategic dependency

Clean energy and low-carbon technology emerged as central themes during the talks. China’s scale and expertise in renewable manufacturing could play a crucial role in helping the UK meet its net zero targets, including full decarbonisation of the National Grid by 2030.

However, this opportunity comes with clear risks. The UK currently imports the majority of its renewable components, with a large proportion sourced from China. While this supports rapid deployment, it also exposes supply chains to disruption from trade restrictions, political tensions or manufacturing slowdowns.

For businesses, this reinforces the need to balance cost efficiency with resilience, diversification and long-term supplier strategy.

US concerns add geopolitical pressure

The UK’s renewed engagement with China has not gone unnoticed in Washington.

US President Donald Trump publicly described the UK’s decision to deepen trade ties with Beijing as “very dangerous”, echoing earlier warnings issued to Canada over similar discussions with China. While the remarks were brief, they underline the potential consequences for the UK’s relationship with the US, particularly at a time when tariffs remain a favoured policy tool for the White House.

In response, UK ministers have pushed back strongly, arguing that ignoring China’s role in the global economy would be unrealistic. Downing Street also confirmed that the US had been informed of the visit and its objectives in advance.

A delicate balancing act

The UK government’s approach appears to be one of selective engagement: leveraging China’s manufacturing strength and investment capacity while maintaining safeguards around critical infrastructure and sensitive technologies.

This strategy is not without precedent. The UK has previously restricted Chinese involvement in areas such as 5G networks and continues to take a cautious stance on national security and intellectual property protections.

For UK businesses, the evolving relationship presents both opportunity and uncertainty. Expanded access to Chinese markets and supply chains could support growth and innovation, but geopolitical tensions may introduce volatility, regulatory complexity and renewed trade barriers.

What this means for employers

As international trade relationships shift, organisations will need procurement, supply chain and commercial professionals who can navigate complexity, manage risk and adapt quickly to changing global conditions.

Demand is already growing for talent with experience in:

• International sourcing and supplier management

• Regulatory and compliance frameworks

• Risk and resilience planning

• Energy and sustainability procurement

At Huntress, we’re seeing employers place increasing value on professionals who understand the wider geopolitical context, not just the numbers on a contract.

Looking ahead

The success of the UK–China agreements will depend on how effectively political commitments translate into long-term commercial partnerships. While opportunities in trade, energy and pharmaceuticals are clear, the UK must continue to balance economic ambition with strategic caution.

As global trade remains highly sensitive to political shifts, businesses should prepare for both the upside and the uncertainty that comes with deeper international engagement.

UK-China trade is complex, but your procurement decisions don't have to be. Reach out to our Procurement team to stay ahead of risks and gain the best opportunities for your business.

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