For more than two decades of governance under Margaret Thatcher and Tony Blair, the economic development model and public service system in the United Kingdom underwent a profound transformation, and its steady policy orientation served as a regulator within the international order, writes Yi Wang, Head of Global Development Program and Senior Researcher at ANBOUND.
Yet luck does not stay in one place forever.
Since the outbreak of the 2008 global financial crisis and the 2016 Brexit referendum, Britain’s long-standing state of stability has been shattered. As the Conservative Party declined and the Reform Party emerged as a new force, the country’s political landscape accelerated its shift from a two-party alternation toward multi-party competition. The Labour Party returned to Downing Street, but it did not bring the widely anticipated tranquility and prosperity; it ended in the resignation of Sir Keir Starmer less than two years into his tenure. Andy Burnham, the newly elected Labour leader, became Britain’s seventh Prime Minister in nearly a decade.
The roller-coaster ups and downs of British political turnover are, in fact, merely a mirror reflecting long-accumulated problems in its national governance. In recent years, a series of signals both in Britain itself and internationally have sounded alarms for the country’s decision-makers. The economy is sluggish, inflation remains stubborn, and unemployment is rising, with young people facing particular difficulty in finding jobs. Brexit reshaped the direction of British foreign policy, yet to this day, the issue of illegal immigration has not been properly resolved, further exacerbating social tensions. In addition, the Russia-Ukraine war drove up energy costs, and the lives of ordinary people continue to be impacted.
To pull the nation out of chaos, what matters the most is not changing leadership, but recovering a sense of direction. Achieving stability is particularly vital for the economy and society. Frequent changes of Prime Ministers and a policy environment eroded by multiple uncertainties damage the UK’s political credibility and market confidence. Enhancing the effectiveness of national governance requires time and, even more so, consensus. Regardless of who leads the UK government, those in power must prove themselves. They must not only possess a plan, but one that is effective, and they must also deploy sophisticated crisis response measures to swiftly reverse the chaotic situation. Otherwise, any politician could be ousted at any moment.
Promoting Britain’s economic recovery, resolving domestic political tensions, and rebuilding public trust will likely be high-priority goals for the new leadership team. Prime Minister Burnham’s cabinet lineup retains members of the previous government in certain key positions, which to a certain extent can maintain policy continuity.
When it comes to the relationship with China, the core of the new UK government’s China policy is unlikely to change, and it remains necessary to maintain engagement and mutual understanding while expanding economic and trade exchanges.
The service sector is a pillar industry and core advantage of Britain, and its status as a major global exporter of services still needs further consolidation. Trade in services is also an important domain in which China can expand market openness and deepen multilateral and bilateral economic and trade agreements. Institutional dividends, such as tariff reductions and customs clearance facilitation, continue to be delivered, and China’s 15th Five-Year Plan period (2026–2030) will accelerate the opening up and comprehensive cooperation of its service sector with the outside world. In fields such as finance, law, educational services, healthcare, the digital industry, and clean energy, the UK and China can make joint efforts both in service trade and in the construction of economic and trade mechanisms.
Overall, Britain’s policy toward China balances cooperation with security, and differences remain over the stance on China both within and outside the ruling party. The British side has also realized that relations with China are complex, long-term, and strategic. British leaders will likely respond to bilateral relations with political caution, seeking to avoid triggering any escalation of conflict while aiming to engage with all sides appropriately driven by interest. At the same time, the Chinese side still needs to deeply understand Britain’s strategic narrative. Given the significant perceptual gap regarding China in British society, the two countries need to maintain smooth channels of information exchange and strengthen exchanges between academia and think tanks to advance relations. That being said, the UK still places emphasis on maintaining relations with allies such as the United States, achieving synergy in its policy toward China. Therefore, the design of China’s policy toward Britain should also be placed within the framework of major-power relations between the United States and China, rather than viewing the UK as an independent variable. Under the leadership of a more rational, mature, and stable cabinet, the UK government may push the relationship with China toward a new balance within a realist framework, which in turn will also influence the policy expectations of EU member states regarding China.
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