A view of the Canary Wharf business district in London, Britain, October 14, 2020. REUTERS/Matthew Childs
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LONDON, July 30 (Reuters) – British businesses are cutting ties with China over concerns about political tensions, a shift likely to fuel inflationary pressures, the head of the Confederation of British Industry (CBI) said in an interview published by on Saturday. .
“Every company I speak to at the moment is engaged in rethinking their supply chains… because they anticipate that our politicians will inevitably accelerate towards a world decoupled from China,” he was quoted as saying. CBI director general Tony Danker told the Financial Times. Newspaper.
China was Britain’s largest source of imported goods in 2021, accounting for 13% of the total, while it was the sixth largest destination for goods exports, according to official British trade statistics.
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However, British security concerns have grown in recent years, fueled by disputes with China over Hong Kong and other issues. Last week, the head of Britain’s foreign intelligence service, Richard Moore, said China was now his top priority, ahead of counter-terrorism work. Read more
Britain has also increasingly blocked takeovers of Chinese companies on national security grounds. Read more
The two remaining candidates in the Conservative Party leadership race – Foreign Secretary Liz Truss and former finance minister Rishi Sunak – have said they intend to take a tougher stance on China. Read more
Danker said growing US concern about China had also made British companies more wary of being dependent on Chinese suppliers and that going elsewhere would be “more expensive and therefore inflationary”.
“It doesn’t take a genius to think that cheap goods and cheaper goods can be a thing of the past,” he added.
British inflation hit a 40-year high of 9.4% last month, partly due to rising energy prices caused by Russia’s invasion of Ukraine.
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Reporting by David Milliken Editing by Helen Popper
Our Standards: The Thomson Reuters Trust Principles.
