China’s ambassador in London has warned it will not be in the “UK’s economic interests to alienate China” amid escalating tensions between the two countries.

The government U-turned on a deal it had previously made for Chinese tech giant Huawei to develop its 5G technology infrastructure earlier this month, amid pressure from the US.

Tensions have also been stoked by the UK’s condemnation of China’s interference in Hong Kong and accusations of human rights abuses against the Muslim Uighur population in Xinjiang province.

New ‘Cold War’

With talks of a new ‘Cold War’ emerging between China and the US, the UK – which is trying to secure a post-Brexit trade deal with the US – is at a “historic political juncture,” ambassador Liu Xiaoming said.

In an hour-long statement and Q&A broadcast live on Twitter, he said the UK would “pay the price” if it treated China as a hostile state by fully siding with the US.

“China and the UK should have enough wisdom and capability to manage and deal with these differences, rather than allowing anti-China forces and cold war warriors to kidnap China-UK relations,” he said.

Does Global Britain need China?

The tensions have arisen following what commentators have called a ‘golden era’ of relations between the UK and China, with the Cameron government in particular courting a greater economic partnership with the country.

China is the UK’s second largest import partner by country, equal with the US and only behind Germany, representing 9.3% of UK imports in 2019 according to Statista.

Liu said there were “unlimited prospects” for increased trade with China, with the UK now a sovereign trading state having left the EU earlier this year. He mentioned financial services, science and technology, education and healthcare as sectors which could thrive.

However, he warned, “it is hard to imagine a global Britain that bypasses or excludes China,” and that “decoupling from China means decoupling from opportunities.”

Balanced approach

Prime Minister Boris Johnson has called for a balanced approach to UK-China relations, saying he does not want to become a “knee-jerk Sinophobe on every issue”.

However, he is under pressure from both the White House and Tory backbenchers, who are calling for the UK to loosen economic ties.

The government has also said it would ‘reshore’ or diversify’ key supply chains – particularly drugs, medical equipment and PPE – in the wake of the coronavirus.