Rachel Reeves said trading with China was in the UK’s national interest as she promised a “pragmatic” approach to relations with Beijing.
The Government has come under pressure to take a tougher stance on China following allegations about spying and attempts by Beijing to wield influence at the heart of the British establishment.
The Chancellor said the Government would put “national security first”, but it was also in the UK’s interests to seek investment from the Asian economic powerhouse.
Such a move could damage business relations with China at a time when the Government is seeking a better relationship with Beijing.
Ms Reeves is expected to visit China in the new year for talks with vice premier He Lifeng, following a meeting between Sir Keir Starmer and Chinese leader Xi Jinping in November.
The Chancellor said: “I think it’s most important that we always put our national security first, and this Government, under Keir Starmer’s leadership, will always do so.
“Our relationship with China will be a pragmatic one, which is in our national interest.
“And so, of course, to challenge where appropriate, and to ensure that our national security is protected.
“But, like other countries around the world, we should trade and seek investment when it is in our national interest to do so, and that will be the approach of this Government.”
The Guardian reported that a wide-ranging review of UK-China’s relations will be delayed until after the Chancellor’s visit to the country.
Mr Yang has insisted he has done nothing wrong ad it was “entirely untrue” to claim he was a Chinese spy.
Meanwhile on Tuesday, judges ruled that MI5 had “legitimate reasons” to warn MPs about Christine Lee, a lawyer accused of working for the Chinese government.
The Security Service warned that it believed she had engaged in “political interference and activities” for a branch of the Chinese Communist Party in an alert that came in January 2022 after a series of donations to Labour MP Barry Gardiner.
Ms Lee said she believed the interference alert issued about her was for a “political purpose, namely to serve the interests of the Conservative party” and brought legal action, along with her son Daniel Wilkes, against the Security Service.
But three judges at the Investigatory Powers Tribunal (IPT) unanimously dismissed both claims.
