Let China build electric cars in UK, Tory ex-chancellor tells Rachel Reeves ahead of trade trip
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Despite ‘spy’ scandal, Philip Hammond says Britain should now adopt a ‘pragmatic approach to Beijing’. China should be encouraged to build electric cars and renewable energy technology in the UK as part of a new pragmatic trading relationship that would benefit both countries, a former Tory chancellor has said ahead of a landmark visit by Rachel Reeves to Beijing early in the new year.
Philip Hammond, who was chancellor from 2016 to 2019, and the last UK minister to take part in formal economic discussions with China before the process was abruptly ended, told the Observer that while Reeves should never “compromise security for trade”, there were vital economic sectors where deals could be struck.
“Chinese advances in electrical vehicle technology and renewable energy technology do actually offer us a route to delivering on our strategic objectives such as electrification,” Hammond said. “Why wouldn’t we encourage the Chinese to build renewable energy technology and electrical vehicles in the UK, just as the Japanese did in the 1980s?”.
At the same time, Jim O’Neill, a former chairman of Goldman Sachs Asset Management and an ex-Treasury minister who made his name by identifying the rise of four leading emerging market economies – Brazil, Russia, India and China – also said Chinese production of electric cars in the UK should be considered.
“If we are genuinely interested in developing trade relationships more to help us achieve stronger growth, then we have to balance the competing interests proportionately – security, defence and the desire for growth,” O’Neill said. “We need to approach it [by thinking about] how they might genuinely benefit more from our strengths, and how we can benefit from theirs. And in making this decision, does it compromise the non-economic interests? The production of electric cars in the UK is an obvious area to explore.”.
