Geopolitical tensions fuel concerns for British companies in China, survey finds

Number of businesses looking to expand in the country has declined from 60 per cent last year to 44 per cent, according to poll

The worsening relationship between London and Beijing is among their top worries

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Mainland China is still a top investment destination for British firms, with 39 per cent of those surveyed saying it was their No 1 priority. Photo: Reuters

Published: 8:00pm, 8 Dec 2020Updated: 10:41pm, 8 Dec 2020

British companies in China are increasingly worried that tensions between London and Beijing could dampen their business prospects in the country, according to a new survey.

With economic recovery from the coronavirus pandemic expected to be slow in much of the world and the Brexit deal hanging in the balance, British firms are looking to China. But the so-called golden era in the countries’ relations is over and companies are cautious about expanding in China, where the business environment has become more complicated by geopolitical tensions.

“What we’ve heard from the British businesses is that they undoubtedly are looking very carefully at the state of the bilateral relationship as well as multilateral relationships,” St John Moore, chairman of the British Chamber of Commerce in China, said on Tuesday, citing Beijing’s relations with Washington as another area of uncertainty.

St John Moore, chairman of the British Chamber of Commerce in China, said companies were “looking very carefully” at the state of bilateral relations. Photo: Handout

The chamber’s latest survey involved 256 companies and was conducted from October to November. It found the number of firms seeking to grow their investment in China had declined – 44 per cent of respondents had plans for expansion, compared to 60 per cent a year earlier.

Most planned to invest more in Shanghai, while half were looking to expand in Beijing. Only 13 per cent of the British companies wanted to invest more in Hong Kong.