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British businesses turning away from China, industry group says

Economic Indicators Jul 30, 2022 06:55AM ET
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© Reuters. FILE PHOTO: A view of Canary Wharf business district in London, Britain, October 14, 2020. REUTERS/Matthew Childs

LONDON (Reuters) - British businesses are cutting ties with China due to concerns about political tensions, a shift that is likely to stoke inflationary pressures, the head of the Confederation of British Industry (CBI) said in an interview published on Saturday.

"Every company that I speak to at the moment is engaged in rethinking their supply chains ... because they anticipate that our politicians will inevitably accelerate towards a decoupled world from China," CBI Director-General Tony Danker was quoted as telling the Financial Times newspaper.

China was Britain's biggest source of imported goods in 2021, accounting for 13% of the total, while it was the sixth-largest destination for goods exports, according to Britain's official trade statistics.

However, British security concerns have risen in recent years, fuelled by disagreements 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.

Britain has also increasingly blocked Chinese takeovers of companies on national security grounds.

Both the remaining candidates in the Conservative Party leadership contest - Foreign Secretary Liz Truss and former finance minister Rishi Sunak - have said they intend to take a tougher line on China.

Danker said growing U.S. concern about China had also made British companies more wary about being dependent on Chinese suppliers, and that going elsewhere was would be "more expensive and thus inflationary".

"It doesn't take a genius to think cheap goods and cheaper goods may be a thing of the past," he added.

British inflation hit a 40-year high of 9.4% last month, partly because of the surge in energy prices caused by Russia's invasion of Ukraine.

British businesses turning away from China, industry group says
 

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Comments (4)
Peter Andersen
Peter Andersen Jul 30, 2022 10:06AM ET
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China Russia same same propaganda long them out make the west bigger
Peter Andersen
Peter Andersen Jul 30, 2022 9:13AM ET
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Yeah lucky some has eyes
Joe Rizzuto
Joe Rizzuto Jul 30, 2022 8:10AM ET
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good for Britain, china has proven to be anti-west. all western countries especially the u.s. must pull back manufacturing from China.
Brad Albright
Brad Albright Jul 30, 2022 8:10AM ET
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I hope you are paying attention to the, so far successful, efforts to bring more manufacturing back to America and which party is leading on the issue.
Edward Gerety
EdwardTjGerety Jul 30, 2022 8:10AM ET
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Brad Albright Trump. He pushed more firms to bring manufacturing back to the USA.
gab nea
gab nea Jul 30, 2022 7:51AM ET
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due to western businesses greed , companies went to china for cheaper products and decimated us manufacturing for profits. they though china was democratizing. now that china has shown its red communist colors, we should send them back to their dark isolated days!
Edward Gerety
EdwardTjGerety Jul 30, 2022 7:51AM ET
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This is a half truth. As Democrats pushed overpaid union jobs and outrageous EPA rules firms took Democrats up on their offer to start China First Policies. Democratic ideals have always been keep them dumb and poor so that they don’t know how [Democrats] are screwing them over.
 
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