Export controls, UK minister visits, and a booming pet economy

Welcome to China in 5, from the British Chamber of Commerce in China.

Each week, we bring you up to speed with what’s caught our eye in the China-sphere in five(ish) minutes.?Grab a coffee, take a break, and dive in!

Export and Inbound Investment Restrictions on the Horizon? Deputy Prime Minister Oliver Dowden at Chatham House

What’s the background? On Thursday, April 18th, the UK’s Deputy Prime Minister Rt Hon Oliver Dowden CBE MP delivered a speech on the country’s de-risking pathway at Chatham House. With the UK government understood to be preparing the release of a new policy on export and import controls, Dowden’s speech can be seen as a key prelude to prepare domestic and international stakeholders for future action on British economic security policy. Ultimately, the speech made limited headway in clarifying government commitments, with policy implications for businesses remaining ambiguous.

Fact 1 In line with the UK’s proposed de-risking pathway, Dowden announced upcoming updates to the National Security Investment Act (NSIA). Businesses can expect greater clarity on areas of risk and restriction for inbound investment, as well as exemptions to mandatory reporting requirements.?

Fact 2 ?Enhancement of export controls was also announced as a priority, with focus on new technologies. The UK’s ‘Anti-Coercion Toolkit’ will be strengthened through reinforcement of civil service capability, resilience assessments and boosted multilateral engagement.

Fact 3 With plans to extend the NSIA framework to outward direct investment, Dowden announced further risk assessment and government-industry coordination. This will include coordination with universities to assess issues of research in sensitive technologies and foreign funding.

Following numerous recent Beijing visits by British lawmakers, the Deputy Prime Minister’s speech underscores a context of heightened engagement between the UK and China. While acknowledging the necessity of aligning economic and national security interests, Deputy Prime Minister Dowden's recent speech may be interpreted by businesses as lacking substantive action. Concerns linger over regulatory ambiguities, especially regarding universities' dependence on Chinese funding. As the UK navigates an increasingly interdependent global system, the disruption and opportunities presented by emerging technologies must be addressed comprehensively and coherently, with consistent industry-government collaboration. Streamlining regulations and fostering dialogue remain vital in this politicised landscape. – Juliette Odolant , BritCham Policy Associate

UK Asia Pacific Minister visits China with focus on courting business

What’s the background? Anne-Marie Trevelyan made a rare ministerial visit to China, arriving in Shanghai on 19 April before making her way to Beijing via Tianjin. Interestingly, the trip was predominantly business focused despite Trevelyan sitting in the Foreign Office. Trevelyan used the trip to call out opportunities for collaboration with China, with lots of focus seemingly on the UK working with China to find solutions for the current situation in Ukraine and the Middle East.

Fact 1 Treveylan’s trip was the first by a British Foreign, Commonwealth and Development Office (FCDO) minister since James Cleverly’s 2023 short visit in August 2023, with a longer trip allowing her to meet key stakeholders.

Fact 2 Following the trip Trevelyan travelled to Hong Kong, becoming the first FCDO minister to visit the city since 2018.

Fact 3 Treveylan met with VM Deng Li to discuss topics “across the breadth of the UK-China relationship”, including the ongoing situations in the Middle East and Ukraine as well as climate change.

This week’s visit was welcomed by the Chamber and businesses here. The trip came amid growing political tension between China and the West after US and EU investigations into Chinese overcapacity. Trevelyan used it as an opportunity to get a better understanding of perspectives on the ground in China, with businesses providing a vital source of information on the market to help the government develop policy. The Chamber was grateful for her visit to the office, where we could raise member concerns first-hand and better understand how the government can support businesses in the market here. – Harry Bell , BritCham Policy and Advocacy Manager

Coffee break read: China's pet economy is booming

Why we like it: The fully-booked pet care centres in China approaching the May Day holiday are reflecting on the nearly 40-dollar-market, projected to reach a whopping 60 billion dollars by 2026. As the furry-friendly cafes and malls boom in China’s major cities, the national fertility rate meanwhile has quickly been approaching 1. There were only 15 million babies born last year, the lowest since 1950, leaving an estimated 0.5 billion population by the turn of the century. So it seems that the growing expenditure and market segments of the pet market is pointing to an unsettling economic sentiment among the younger generations. Still, it’s a happy boon for Chinese pets!

Podcast of the Week: Building a Path Forward?– Peking University's Yu Tiejun on US-China Scholarly Recoupling

Why we like it: In a challenging geopolitical environment, links in areas outside security, politics, and economics become all the more important. This podcast from CSIS explains the importance of links between the US and China in one crucial area – education. The conversation between Scott Kennedy and Yu Tiejun from Peking University's Institute of International and Strategic Studies dives deeper into how these two leaders in their field were impacted by international educational exchanges, as well as the state of affairs for US-China educational links right now. For more reflection, the report that the podcast covers, "U.S.-China Scholarly Recoupling: Advancing Mutual Understanding in an Era of Intense Rivalry" is worth a read, too – its 27 essays dive deeper into the benefits of transnational educational cooperation between the two superpowers, as well as offering concrete and practical ways that roadblocks to greater academic links can be overcome.

And finally...

Speaking of international exchanges, we found this read from Sixth Tone on Marco Polo's legacy in China well worth a read. The piece interviews Rong Xinjiang, who has spent the last 13 years producing a definitive edition of "The Travels of Marco Polo" in Chinese - and he's still working on it! Diving deeper into scepticism of Marco Polo's existence, the lack of Chinese records on the explorer, and lots more besides, we found it to be an intriguing read on this important historical figure.

Thanks for reading China in 5! Have thoughts about what you'd like to see, suggestions for our coffee break reads, or a favourite podcast you want to share? Let us know below, or reach out via our website at britishchamber.cn.