Relations between the United Kingdom (UK) and Hong Kong have become more complicated and contested following a number of recent developments. Even so, bilateral investment and trade continues to surge.

Hong Kong returned to news headlines in the UK in the first quarter of this year as the Hong Kong Special Administrative Region government proposed legislation under Article 23 of the Basic Law (the “mini-constitution” for Hong Kong). The Safeguarding National Security Ordinance was passed by the legislative council in mid-March. The British government response was critical: Foreign Secretary Lord (David) Cameron said the legislation “undermines [the] implementation” of the Sino-British Joint Declaration of 1984, under which the handover of Hong Kong was agreed. Both the central Chinese government in Beijing and the local Hong Kong government rejected this, citing the constitutional requirement for the law and similar legislation in the UK.

In April, the Foreign, Commonwealth and Development Office issued its regular six-monthly report to parliament, covering the second half of 2023. The Foreign Secretary’s Foreword continued the critical tone of recent reports, attacking the previous National Security Law passed in 2020, and again accusing Beijing of breaching the Joint Declaration. More recently, Hong Kong-related arrests in the UK under the UK’s new National Security Act have seriously sharpened the sense of confrontation. The allegations relate to the apparent pursuit of certain Hong Kong “dissidents” in the UK and the alleged role of Hong Kong’s Economic and Trade Office in that, though the lack of public detail in these cases mean it is too early to judge how strong they are and what the longer term impact will be. The case has already led to the tragic, apparent suicide of one of the defendants.

However, these are not the only features of the UK’s recent approach to Hong Kong. Some complexity and nuance was on display in a visit to Hong Kong in April by Anne-Marie Trevelyan, the junior foreign minister responsible for relations with the Indo-Pacific. In the first visit by a foreign office minister since 2018, Trevelyan reinforced the critical political messages, but her agenda and comments broadened the scope to include a wider range of issues beyond the security legislation and related cases, to areas such as the financial sector.

Other tentative signs of engagement have included the visit to Hong Kong last year by the British investment minister, and several visits to the UK by senior officials from Hong Kong. In particular, it seems that London wants to take advantage of Hong Kong’s open economy and continued strength as an international financial centre, something which can also benefit the Hong Kong economy and, hence, its population.

The basis for this approach can be seen in some data. In 2023, Hong Kong was the UK’s 18th largest trading partner globally, with trade in goods and services over GBP25 billion, close to total British trade with Japan. Hong Kong has long been the second largest market for British goods exports in the Indo-Pacific, after the Chinese mainland (the two are considered separately as Hong Kong SAR is a separate customs territory under the “one country, two systems” arrangement). The UK has a considerable trade surplus: in 2023 this was GBP6 billion. Investment flows are substantial too. In 2021, there was GBP77 billion of British foreign direct investment in Hong Kong and stocks of Hong Kong investment in the UK were GBP16 billion.

Beyond trade and investment, Hong Kong remains a major source of international students in the UK, fifth on the list in 2021/22, with around 17,000 students, higher than the number from any EU country. Given Hong Kong’s relatively small size – a GDP of US$370bn in 2023 and a population of around 7.5 million – it therefore plays an outsized role in the UK’s interactions across Asia. The intensity of British trade with Hong Kong over time (calculated using World Bank data) is higher than with any other economy in the Indo-Pacific region. In spite of all this, Hong Kong is rarely mentioned in British discussions of the post-2021 policy “tilt” to the Indo-Pacific.

These features of the UK’s relations with Hong Kong formed the basis for a strong, positive relationship for more than two decades after the handover of sovereignty in 1997 (and indeed, before 1997). However, since the unrest in Hong Kong in 2019, and the passage of national security legislation in 2020, politics has taken charge. The British government’s stridently critical response to the 2020 National Security Law included the launch of the British National (Overseas) visa scheme, under which some 200,000 have applied to leave Hong Kong for the UK. Since then, a sense of opposition has dominated British policy towards Hong Kong.

This is unlikely to change much, not least because of the influential Hong Kong lobby in the UK, which was critical of the Trevelyan visit. But the economic and cultural ties show that there are a number of other fundamental drivers for the relationship, and there may be alternative policy options. Balancing these in the pragmatic tradition of British diplomacy will prove difficult, though there is perhaps some realisation in London that whatever the UK does, Hong Kong’s national security legislation is not going to change, nor is Beijing’s desire to maintain its influence.

While there is limited public discussion around these issues in British policy circles, the UK is not the only traditional partner of Hong Kong facing these dilemmas. A recent report by the Washington-based Center for Strategic and International Studies was strongly critical of Hong Kong on the same political issues that have concerned British politicians. But it also called for a reevaluation of the US approach, suggesting that “policy should be rooted in a pragmatic understanding of what strategies are likely to be most productive (or counterproductive) for U.S. interests and Hong Kong’s autonomy and resilience, rather than symbolic measures.” London does not get too distant from Washington in foreign policy, so watching the US approach is key for the UK.

There is now a British general election due on 4 July, and many are waiting for the next government. At the moment, there is little indication that Labour’s approach to China (including Hong Kong) would be substantively different, were it to win, as the polls suggest it will. It will certainly face similar structural pressures on China policy, including the relentless political pressure to take a negative stance on Hong Kong.

Nonetheless, a new government offers an opportunity to rethink policy, and Labour has promised to “audit” UK-China ties. The next government could consider pursuing a more pragmatic approach to Hong Kong to reflect better the overall balance of British interests.

Tim Summers is Assistant Professor of Chinese Studies at the Chinese University of Hong Kong. His research focuses on the international relations and political economy of contemporary China. Tim’s recent publications include two books, China’s Hong Kong: the politics of a global city (Agenda, 2019 & 2021) and China’s Regions in an Era of Globalisation (Routledge, 2018).

This article is published under a Creative Commons License and may be republished with attribution.