Philip Hammond warns against rise of 'anti-Chinese sentiment' within Conservative Party

Philip Hammond has warned against an alarming rise of “anti-Chinese sentiment” within the Conservative Party, as he suggested the UK should avoid jeopardising its trading relationship with the world’s second largest economy.

Mr Hammond, who was foreign secretary when David Cameron declared a “Golden Era” of Sino-British relations, said the UK was already “loosening its ties” with the EU in “the name of expanding its global reach”.

“It seems to me this is not a time to be wanting to weaken our trade links with the world’s second largest economy,” he told BBC Radio 4’s Today programme.

Amid escalating diplomatic tensions between London and Beijing over issues such as Huawei’s access to the UK’s 5G network, Chinese investment in nuclear power plants and the the new security law in Hong Kong, Mr Hammond said the government had always been “very frank with the Chinese in private”.

He continued: “We have to find a way, and I think we have done it in the past with many countries, of continuing to trade, continuing to invest and welcome investment from countries with which we have frank disagreements about political issues.”

On the increasing criticism of Beijing from Tory MPs, Mr Hammond said: “I’m concerned about the outbreak of anti-Chinese sentiment within the Conservative Party.

“As I say, it’s always been right to be clear-eyed about the challenges of a relationship with China and frank about the differences we have with China, but that seems to me over the last months to have accelerated into something which is becoming a little bit more alarming.

“At the same time, we are in a position where need to build our trade relationships around the globe, but China is Britain’s third largest trading partner after the EU and the US and I think we need to tread carefully in how we manage this relationship.”

His remarks come after China’s ambassador to the UK warning that stripping the telecommunications giant Huawei from the 5G infrastructure would send a “very bad message” to Chinese companies.

“The China business community are all watching how you handle Huawei. If you get rid of Huawei it sends out a very bad message to other Chinese businesses,” Liu Xiaoming said at a press briefing on Monday.

Mr Johnson's spokesman declined to discuss whether there was anti-Chinese sentiment on the Tory backbenches.

The spokesman said: "We have a strong and constructive relationship with China in many areas but at the same time, where we have concerns, we will raise them and where we need to intervene, we will - such as in Hong Kong."

He said the government wanted the UK to maintain its reputation as an open economy, but added that it was beefing up safeguards to protect critical national infrastructure.

"We have a hard-won reputation as one of the most open economies in the world," said the spokesman. "There is a National Security and Investment Bill which we are bringing forward which wil help protect our national security by strengthening powers to scrutinise and intervene in takeovers and mergers while ensuring the UK remains open for free trade and investment."

The former chancellor under Theresa May’s premiership also said Rishi Sunak must be prepared to let some businesses fail in the aftermath of the coronavirus pandemic.

Speaking before the chancellor announces fiscal measures designed to aid the UK’s economic recovery on Wednesday in an update to MPs, Mr Hammond said: “I think it is important to recognise that the chancellor faces an extraordinarily complex challenge.”

“He’ll want to continue to support businesses and people who are affected by regulatory shutdown in what are otherwise viable businesses,” he said. “But he will also sadly need to facilitate a transition for those businesses and people who are, what they are doing is no longer viable.

“Some businesses will close, some viable businesses will close units – we have already heard the announcement of retailers closing stores – and that’s where a focus on re-training and re-skilling, getting people turned around and ready to go back into the workforce as quickly as possible, will come into it.”