LONDON — It’s a far cry from the ice age of U.K.-China relations that
characterized Rishi Sunak’s leadership — and it’s not exactly David Cameron’s
“golden era,” either.
As U.K. Prime Minister Keir Starmer embarks on his Chinese charm offensive
against a turbulent economic backdrop, he has opted for a softly-softly approach
in a bid to warm up one of Britain’s most important trading partners — a marked
departure from his Tory predecessors.
With the specter of U.S. President Donald Trump looming over the visit — not to
mention national security concerns back home — Starmer’s cautious optimism is
hardly surprising.
Despite reservations from China skeptics, Starmer’s trip — the first such visit
by a British prime minister since 2018 — was peppered with warm words and a
smattering of deals, some more consequential than others.
Britain’s haul from the trip may be modest, but it’s just the beginning,
Business and Trade Secretary Peter Kyle — who joined Starmer on the trip — told
a traveling pack of reporters in Beijing.
“This visit is a springboard,” the minister said. “This is not the last moment,
it is a springboard into a future with far more action to come.”
STEP-BY-STEP
On the ground in Beijing, British officials gave the impression that the prime
minister was focused on getting as many uncontroversial wins over the line as
possible, in a bid to thaw relations with China.
That’s not to say Starmer and his team don’t have a few tangible wins to write
home about. Headline announcements include a commitment from China to allow
visa-free travel for British tourists and business travelers, enabling visits of
up to 30 days without the need for documents.
The provisions are similar to those extended to 50 other countries including
France, Germany, Italy, Australia and Japan. The timings of the visa change have
not yet been set out publicly, but one official — who, like others cited in this
piece, was granted anonymity to speak freely — said they were aiming to get it
nailed down in coming months.
“From a business standpoint, it will reduce a lot of friction,” said a British
business representative, adding it will make it easier for U.K. firms to explore
opportunities and form partnerships. “China is very complicated. You have to be
on the ground to really assess opportunities,” they said, adding visa-free
travel “will make things a lot easier.”
The commitment to visa-free travel forms part of a wider services package aimed
at driving collaboration for businesses in healthcare, financial and
professional services, legal services, education and skills — areas where
British firms often face regulatory or administrative hurdles.
The countries have also agreed to conduct a “feasibility study” to explore
whether to enter negotiations towards a bilateral services agreement. If it goes
ahead, this would establish clear and legally binding rules for U.K. firms doing
business in China. Once again, the timeframe is vague.
David Taylor, head of policy at the Asia House think tank in London, said “Xi’s
language has been warmer and more expansive, signaling interest in stabilizing
the relationship, but the substance on offer so far remains tightly defined.”
“Beyond the immediate announcements, progress — particularly on services and
professional access — will be harder and slower if it happens at all,” he added.
WHISKY TARIFF RELIEF
Another victory talked up by the British government is a plan for China to slash
Scotch whisky tariffs by half, from 10 percent to 5 percent.
However, some may question the scale of the commitment, which effectively
restores the rate that was in place one year ago, ahead of a doubling of the
rate for whisky and brandy in February 2025.
The two sides have not yet set out a timeframe for the reduction of tariffs.
Speaking to POLITICO ahead of Starmer’s trip, a senior business representative
said the whisky and brandy issue had become “China leverage” in talks leading up
to the visit. However, they argued that even a removal of the tariff was “not
going to solve the main issue for British whisky companies in China and
everywhere, which is that people aren’t buying and drinking whisky.”
CHINA INVESTMENT WIN
Meanwhile, China can boast a significant win in the form of a $15 billion
investment in medicines manufacturing and research and development from British
pharmaceutical giant AstraZeneca.
ING Bank’s global healthcare lead Stephen Farelly said that increasing
investment into China “makes good business sense,” given the country is “now
becoming a force in biopharma.” However, it “does shine a light on the isolation
of Europe and the U.K. more generally, where there is a structural decline in
investment and R&D.”
AstraZeneca recently paused a £200 million investment at a Cambridge research
site in September last year, which was due to create 1,000 jobs.
Britain recently increased the amount the NHS pays for branded, pharmaceutical
drugs, following heavy industry lobbying and following trade negotiations with
the Trump administration — all in the hopes of attracting new investment into
the struggling sector.
Shadow Trade Secretary Andrew Griffith was blunt in his assessment.
“AstraZeneca’s a great British company but under this government it’s investing
everywhere in the world other than its U.K. home. When we are losing investment
to communist China, alarm bells should be ringing in No 10 Downing Street.”
Conspicuously absent from Starmer’s haul was any mention of net zero
infrastructure imports, like solar panels, a reflection of rising concerns about
China’s grip on Britain’s critical infrastructure.
XI RETURNS
So what next? As Starmer prepares to fly back home, attention has already turned
to his next encounter with the Chinese leader.
On Thursday, Britain opened the door to an inward visit by Xi Jinping, with
Downing Street repeatedly declining to rule out the prospect of welcoming him in
future.
Asked about the prospect of an inward visit — which would be the first for 11
years — Starmer’s official spokesperson told reporters: “I think the prime
minister has been clear that a reset relationship with China, that it’s no
longer in an ice age, is beneficial to British people and British business.”
As Starmer’s trip draws to a close, one thing is certain: there is more to come.
“This isn’t a question of a one-and-done summit with China,” Starmer’s
spokesperson added. “It is a resetting of a relationship that has been on ice
for eight years.”
Tag - Medicines manufacturing
The World Health Organization has recommended the use of novel weight-loss drugs
to curb soaring obesity rates, and urged pharma companies to lower their prices
and expand production so that lower-income countries can also benefit.
The WHO’s new treatment guideline includes a conditional recommendation to use
the so-called GLP-1s — such as Wegovy, Ozempic and Mounjaro — as part of a wider
approach that includes healthy diet, exercise and support from doctors. The WHO
described its recommendation as “conditional” due to limited data on the
long-term efficacy and safety of GLP-1s. The recommendation excludes pregnant
women.
While GLP-1s are a now well-established treatment in high-income countries, the
WHO warns they could reach fewer than 10 percent of people who could benefit by
2030. Among the countries with the highest rates of obesity are those in the
Middle East, Latin America and Pacific islands. Meanwhile, Wegovy was only
available in around 15 countries as of the start of this year.
The WHO wants pharma companies to consider tiered pricing (lower prices in
lower-income countries) and voluntary licensing of patents and technology to
allow other producers around the word to manufacture GLP-1s, to help expand
access to these drugs.
Jeremy Farrar, an assistant director general at the WHO, told POLITICO the
guidelines would also give an “amber and green light” to generic drugmakers to
produce cheaper versions of GLP-1s when the patents expire.
Francesca Celletti, a senior adviser on obesity at the WHO, told POLITICO
“decisive action” was needed to expand access to GLP-1s, citing the example of
antiretroviral HIV drugs earlier this century. “We all thought it was impossible
… and then the price went down,” she said.
Key patents on semaglutide, the ingredient in Novo Nordisk’s diabetes and
weight-loss drugs Ozempic and Wegovy, will lift in some countries next year,
including India, Brazil and China.
Indian generics giant Dr. Reddy’s plans to launch a generic semaglutide-based
weight-loss drug in 87 countries in 2026, its CEO Erez Israeli said earlier this
year, reported Reuters.
“U.S. and Europe will open later … (and) all the other Western markets will be
open between 2029 to 2033,” Israeli told reporters after the release of
quarterly earnings in July.
Prices should fall once generics are on the market, but that isn’t the only
barrier. Injectable drugs, for example, need cold chain storage. And health
systems need to be equipped to roll out the drug once it’s affordable, Celletti
said.
Europe’s pharmaceutical lobby group has criticized Donald Trump’s decision to
impose up to 100 percent tariff on drugs coming from overseas, calling it the
“worst of all worlds.”
But it’s not clear what rate products from the EU would face.
The U.S. president announced Thursday evening that brand-name or patented
pharmaceutical products will be subject to tariffs from Oct. 1 — unless a
drugmaker is building a manufacturing plant in the United States.
“‘IS BUILDING’ will be defined as, ‘breaking ground’ and/or ‘under
construction.’ There will, therefore, be no Tariff on these Pharmaceutical
Products if construction has started,” Trump wrote on Truth Social.
“Tariffs increase costs, disrupt supply chains and prevent patients from getting
life-saving treatments,” said Nathalie Moll, director general of the European
Federation of Pharmaceutical Industries and Associations (EFPIA), whose members
include Novo Nordisk, Pfizer and AstraZeneca.
Products from the EU should in theory only be subject to a maximum 15 percent
tariff, after the European Commission negotiated a knocked-down rate in its deal
with Washington in July.
Trump’s latest post raises questions about how binding the EU-U.S. trade deal
is, which limits branded medicines’ tariffs. The deal agreed in July between the
pair also sees cheaper generic medicines exempt from the tariffs.
Olof Gill, deputy chief spokesperson for the European Commission said the EU
does not expect its industry to pay more than 15 percent.
“This clear all-inclusive 15% tariff ceiling for EU exports represents an
insurance policy that no higher tariffs will emerge for European economic
operators,” Gill said. “The EU is the only trade partner to achieve this outcome
with the US.”
Ireland’s Trade Minister Simon Harris said the EU-U.S. trade deal made it
“absolutely clear” that a tariff applied to branded drugs from the EU would be
capped at 15 percent.
The post also raises the question about whether the United States could tariff
individual companies in the same sector at different rates.
Although the Trump administration has signaled time and again that it doesn’t
pay much heed to rules-based trade, governments can’t simply slap a higher
“regular” tariff on one foreign company and a lower one on another under World
Trade Organization rules. Duties are usually applied uniformly to all exporters
from a given country, or target a specific product altogether — such as steel or
medicines — in case of dumping or unfair subsidies.
Moll said that “tariffs on medicines, however excessive, would create the worst
of all worlds.”
She urged Brussels to reopen negotiations with Washington, saying they should
discuss “how the EU can improve its support towards the cost of global research
and development in a way that doesn’t harm patients in the EU and the US.”
“The EU and US continue engaging towards implementing the Joint Statement
commitments, while exploring further areas for tariff exemptions as well as
wider cooperation,” Gill said.
Earlier this week, an official from the Commission’s DG TRADE also said that the
EU would continue to push for exemptions to the U.S. tariffs for pharmaceutical
and medtech products.
Several companies have already said they will increase investment by building
new plants in the U.S. in recent months, with Johnson & Johnson and Eli Lilly
among those all committing to spend in the country.
The story has been updated with Ireland’s position.