UK-China Trade Figures Up by £4.9 Billion

August 8, 2022 Posted by China Briefing Reading Time: 2 minutes

Current bilateral trade is just under £100 billion as preference for China trade outweighs political negativity.

Despite the political negativity in the UK concerning China, an August 2022 report issued by the UK Department of Trade & Industry has shown that the total trade in goods and services (exports plus imports) between the UK and China was £93.4 billion in the four quarters to the end of Q1 2022, an increase of 5.5 percent or £4.9 billion from the four quarters to the end of Q1 2021. This is despite the UK economy actually shrinking.

It also compares with UK-China bilateral trade figures of £24.52 billion a decade ago and belies the recent anti-China commentary from various sources painting an overly negative picture of China-UK relations, showing that politics isn’t the only relationship directive, and indicates the British businesses are flying the UK flag where politicians are not. Given the UK’s trade issues concerning Brexit, it may be worth reconsidering how the political angle towards China can be better reconciled with the obvious British trade demand.

Of the £93.4 billion, total UK exports to China amounted to £27.1 billion in the four quarters to the end of Q1 2022 (an increase of 7 percent or £1.8 billion compared to the four quarters to the end of Q1 2021), while total UK imports from China amounted to £66.3 billion in the four quarters to the end of Q1 2022 (an increase of 5 percent or £3.1 billion compared to the four quarters to the end of Q1 2021).

China was the UK’s third largest trading partner in the four quarters to the end of Q1 2022 accounting for 6.9 percent of total UK trade.

The most recent figures for outbound investment from the UK into China show investments worth £12.9 billion, accounting for 0.8 percent of the total UK outward FDI stock in 2020. In terms of UK inbound investment from China, Chinese businesses invested £3.4 billion into the UK in 2020, accounting for 0.2 percent of the total UK inward FDI stock.

These figures are backed up by what Dezan Shira & Associates UK has been saying about UK investment into China – the underlying trends remain strong. The firm handles British investment into the PRC and has done since 1992. Grant Williams in the firm’s Shanghai office says, “Contrary to media reports, British investors remain welcome in China and there are plenty of sectoral elements for them to be involved with, especially given China’s huge consumer market. We are able to provide market research facilities, establishment, and tax structuring assistance to UK exporters that require a new look in rethinking a China strategy.”

Direct flights have also now resumed between the UK and China for the first time in two years, while quarantine restrictions are also now being reduced.