A significant week for the UK’s international relationships, as the government made overtures towards improved ties with China and reopened trade talks with India for the first time since the general election. Elsewhere, Japan saw an unexpected export boost and we previewed some of the political insights you can expect from the Import Export Show.
The big picture: China’s relations with the UK were in focus this week, after UK prime minister Sir Keir Starmer and Chinese leader Xi Jinping met at the G20 summit in Brazil.
Starmer said he will seek “strong” ties while taking a “pragmatic” approach to the Asian nation, and pledged that the UK would be a “predictable, consistent, sovereign actor” in the relationship. Xi, meanwhile, said “we will break new ground in the China-UK relationship”.
It was not only the UK where China’s foreign policy came to the fore – the FT reported yesterday (21 November) that a Chinese state-backed firm will launch a competitor to the Starlink satellite internet service in Brazil. The announcement came as Xi made a visit to the Latin American nation to sign a renewed partnership alongside its president, Luiz Inácio Lula da Silva.
Jie Zheng, chief executive of the Chinese firm SpaceSail, said the company was “committed to being a long-term partner to Brazil”, after Starlink owner Elon Musk was rebuked by the Brazilian government earlier this year for alleged misinformation on his Twitter/X social media platform.
Good week/bad week: Japan’s exports grew by more than expected last month, despite growing uncertainty in some important markets. Bloomberg reports that, in October, Japanese exports rose 3.1% year-on-year, rebounding after disappointing September figures. This unexpected surge was fueled by increased shipments of chip-making machinery and medical goods. The country continues to run a trade deficit, however.
It was a less positive week for UK industry, which recorded its first contraction in 13 months on Friday (22 November). The S&P flash purchasing managers’ index fell below the 50 threshold – hitting 49.9 – which indicates economic contraction in the sector.
In addition to a knock in business confidence, following chancellor Rachel Reeve’s announcement of a hike in employer national insurance contributions in her first Autumn Budget, a decline in manufacturing sales, attributed to weaker global demand and “intense competition in export markets,” also led to poorer performance.
The week in customs: Another instalment of Customs Corner covered new rules for those importing research and diagnostics samples into the UK from the EU, those importing animal by-products from the EU no longer needing to abide by a 1 February 2025 deadline to apply for specific import authorisations from the Animal and Plant Health Agency and a new deposit repayment service being trialled by HMRC.
How’s stat: 30%. That's how much the price difference between US and European liquified natural gas (LNG) widened over the course of the past year, according to a report by Reuters. Producers are diverting more of their supplies to export terminals and the US’ largest LNG exporters are expecting a surge in profits over the winter months.
The energy source has become more significant in recent years and European nations diversify away from Russian oil and gas, as part of sanctions imposed following Russia’s invasion of Ukraine in 2022.
Quote of the week: “My message to any business in Greater Manchester looking to make their exporting ambitions a reality, we want to help, and hope that the new hub will pave the way to get more businesses trading right around the world.”
Business and trade secretary Jonathan Reynolds, who was announcing a new Enhanced Trade Partnership between the Department for Business and Trade (DBT) and the Greater Manchester Combined Authority. The scheme will offer “unparalleled targeted support” for SMEs, according to the government.
What else we covered: We previewed the Import Export Show’s panel discussion on how 2024’s year of elections has set the stage for a reshaping of global trade. Incidentally, you can still sign up to attend the 3 December event here.
This week featured a host of stories on the UK’s future trading relationships in light of one of those elections: the re-election of former US president Donald Trump.
As well as Starmer’s China reset, there were suggestions that the UK would have to choose between drawing closer on trade to the US and aligning instead with the EU. One senior Trump adviser suggested getting closer to a “socialist” EU would limit the prospects of improving trade relations with the US.
The UK also reopened trade negotiations with India for the first time since this year’s general election, with Starmer stating that “a new trade deal with India will support jobs and prosperity in the UK”.
True facts: A monumental day of the year for global politics over the years. As well as the assassination of John F Kennedy (1963), it is also the day Margaret Thatcher resigned as UK PM (1990), the day Angela Merkel first became German chancellor (2005) and Charles de Gaulles’s birthday (1890).