UK plc cuts ties with China, says CBI boss

UK plc cuts ties with China, says CBI boss

Thousands of British businesses are cutting economic ties with China en masse, threatening to put further pressure on the cost of living, the head of the CBI business group has warned.

Tony Danker, director general of the CBI, said the directors general were shifting their trade relations from China to other countries in anticipation of a further deterioration in relations between Beijing and the West.

Danker said the UK would have to find new trading partners and rekindle old ones – for example in the EU – if the West cut ties with China. “If the political pundits and the security pundits are right, we all have to be good friends again,” he said.

“Every company I talk to right now is engaged in redesigning their supply chains,” he said. “Because they anticipate that our politicians will inevitably accelerate towards a world decoupled from China.”

Conservative leadership candidates Liz Truss and Rishi Sunak are vying to talk tough on the UK’s China policy.

Danker said companies are restructuring their supply chains in anticipation of hardening anti-China political sentiment.

“We need new strategic alliances around the world,” he said, adding that companies need to build “resilience.” . . In Washington, that’s all they talk about.

Prices would inevitably rise, he warned, but not immediately. “It doesn’t take a genius to think that cheap stuff and cheaper stuff might be a thing of the past.”

Removing China from corporate supply chains “will be more expensive and therefore inflationary and will redefine Britain’s trade strategy… it will no longer be who we sell to but where we source from.

The CBI does not endorse either Sunak or Truss in the Conservative leadership race. Instead, Danker says he’s happy that both candidates seem to understand the need for a positive business strategy.

Johnson said “fuck business” in response to business concerns about the impact of Brexit. Danker joked, “Boris Johnson said he wanted to fuck business, which was a lively suggestion, but we’re looking for a proper relationship.”

He described September 5, when the new prime minister will be chosen, as a potential “moment of reset” for business-government relations after years of Brexit-related tensions.

“We can’t afford old arguments about Brexit or immigration or green [issues]. We need a radical, business-informed growth plan,” he said. “We’ve had a lost decade, and there’s a risk of another lost decade.”

The CBI chief expressed disappointment that some of the Tory leadership candidates had criticized the 2050 net zero target.

Johnson had been a “first-class prime minister” when it came to the green agenda, acknowledging that he would be an engine of economic growth in the years to come, he argued.

“Candidates should be careful. I understand politics, but being a green skeptic now erodes the platform you will have as prime minister for what we believe is the greatest economic and business opportunity for the UK,” he said. . Recognizing green opportunities has not been “awakened”, he added.

Danker suggested that the leadership debate did not reflect current business priorities, but placed an excessive emphasis on corporate tax rates rather than overall corporate tax balances.

As Tory leadership candidates discuss cutting regulations, Danker said CBI members want smarter and faster regulation rather than just cutting red tape for the sake of it.

Lighter regulation in new cutting-edge sectors would be a priority in the years to come, he added.

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