China can help UK manufacturers upgrade: BCC EAC member

While the large services firms on the delegation already have China operations, compliance capacity and established relationships, the strategic value of this reset should be creating pathways for the firms that don’t yet have alternatives, i.e., the small and medium enterprises (SMEs) currently over-exposed to increasingly unreliable Western markets and least equipped to navigate a complex new market without support, Jun, who is with the Centre for Business Prosperity at Aston University, wrote in a blog.

The cost of energy doesn’t only constrain manufacturing, it increasingly constrains artificial intelligence (AI). Physical AI infrastructure requires energy at scale: data centres, compute capacity, the hardware that underpins the AI economy. All are bottlenecked by energy costs that make Britain uncompetitive, he wrote.

“China’s expertise in building energy capacity quickly and at scale is precisely the kind of practical cooperation a ‘sophisticated relationship’ could enable. This is the opportunity that could matter most for UK competitiveness over the next decade,” he noted.

British thinking about China should evolve from two existing ‘passive’ mindsets—as a source of cheap labour and as a large but regulated consumer market—to a third model: complementary innovation, he suggested.

“The relationship is evolving from making things, to making things together, to innovating together….China provides engineering capability and application scenarios at scale; the UK provides foundational research and global education networks. This is not zero-sum competition but mutual reinforcement,” Jun said.

“Three things would turn this reset into lasting results. First, a dedicated SME pathway for China market entry, building on the institutional frameworks now in place. Second, policy attention to the practical barriers businesses actually face—cash flow, not geopolitics. Third, an energy infrastructure strategy that recognises AI competitiveness depends on it,” he added.

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