Britain's audit on China relations to be released in June, sources say

By Laurie Chen and Joe Cash

BEIJING (Reuters) -Britain's long-awaited audit of relations with China is expected to be released in early June, two sources familiar with the matter told Reuters, as London seeks to improve commercial ties with Beijing while guarding against perceived security threats.

The Labour government has said the audit would be Britain's first in-depth appraisal of its engagement with China and the role of the world's second-largest economy in its supply chains.

British security services in 2022 labelled Beijing the nation's top long-term threat due to the relative difficulty in deciphering what exactly China wants.

Commissioned shortly after Prime Minister Keir Starmer won power in July 2024, the wide-ranging review comes as the ruling Labour government steps up diplomatic engagement with China after years of tensions under successive Conservative governments over human rights, Hong Kong and restrictions on investment.

The UK Foreign Office did not immediately respond to a request for comment, nor did China's foreign ministry.

Reuters previously reported the audit had been watered down by the Labour government, paving the way for a less critical report that could help Starmer focus on boosting economic engagement.

The content of the audit is likely to be aligned with the forthcoming national strategic defence review, the sources said, a government document assessing the UK's military capabilities to be published in the next few months.

It was initially expected to be released before U.S. President Donald Trump's inauguration but had been delayed.

The report will not herald a major policy shift in the UK government's approach to China, a third source told Reuters. Various government ministries have contributed to the audit, which is being prepared by a team within the Foreign Office.

It is likely to largely repeat the government's "three Cs" strategy towards China: challenge, compete and cooperate, Reuters previously reported.

British finance minister Rachel Reeves and foreign minister David Lammy have visited China in recent months, with trade secretary Jonathan Reynolds expected to make a trip between now and September to revive a key trade dialogue with Beijing, a fourth source said.

Preparations are currently being made for Starmer to visit China later this year, Reuters has reported, in the first trip to the country by a British leader since 2018.

Beijing appreciates the new UK government's more restrained criticism of China, including at last year's G20 summit where Starmer declined to condemn the jailing of Hong Kong pro-democracy activists, Chinese officials previously told Reuters.

However, the relationship still remains dogged by China's contested plans to build a large new embassy in London and the fallout from revelations last December that a Chinese businessman and former close associate of Prince Andrew was suspected by British authorities of spying for Beijing.

(Reporting by Laurie Chen and Joe Cash in Beijing; additional reporting by Andrew MacAskill in London; Editing by Lincoln Feast.)