While weakening consumer confidence and growing geopolitical tensions have cast a pall over many foreign businesses in China, British wine club operator 67 Pall Mall is undaunted.
The company is preparing to launch its first mainland Chinese club in a century-old Shanghai mansion originally built by a British merchant, aiming to attract up to 1,500 members paying annual fees of Rmb50,000 ($6,900).
“I have looked at probably 20 other sites around the city,” said founder Grant Ashton. “I genuinely believe China is open for business.”
Ashton is far from alone in his optimism. While their US and EU rivals pursue growth under the shadow of China’s high-level trade disputes with Washington and Brussels, the mood among UK businesses is being buoyed by a dramatic thaw in diplomatic relations between Beijing and London.
After years of strained ties, especially after Beijing imposed a national security law in Hong Kong 2020 that clamped down on political freedoms in the former British territory, the UK Labour government has prioritised a reset with China that emphasises trade and investment ties.
From folding-bicycle specialists Brompton to consumer conglomerate Reckitt, there has been a steady flow of investment announcements by British companies in the world’s second-largest economy.
Unlike the US and EU, the UK has not imposed sweeping new tariffs on Chinese goods or launched urgent trade investigations. In January, after visiting British chancellor Rachel Reeves met vice-premier He Lifeng, London said “re-engagement with China” would drive “up to £1bn of value for the UK economy”.
The UK government welcomed new Chinese licences and quotas for British financial services businesses HSBC, Schroders, Aberdeen and Aspect Capital, and noted that pork processors previously blocked from exporting to China during the coronavirus pandemic had been allowed to resume sales in December.
“With [Reeves’] recent trip to China and a little bit more noise around co-operation and collaboration, from a business perspective, that gives us a little bit more confidence,” said Mark Keane, founder of Scottish cashmere clothing maker Kiltane, which is considering its first bricks-and-mortar store in the country.
The Sino-British diplomatic warming is still in its early stages and just one factor in a fast-evolving Chinese corporate landscape of great importance to UK business.
Some of the country’s biggest financial services players and other major businesses such as London-listed aero-engineering group Rolls-Royce have long had a major presence in China, while UK-based Merlin Entertainments last month opened the world’s biggest Legoland in Shanghai and clothing brand Barbour has been opening new stores.
“Today China is by far our largest market,” said Christoffer Sellin, chief commercial officer of Brompton, which already has stores in Beijing and Shanghai and plans to open one in Shenzhen next year. Brompton owners in China had held hundreds of “community rides”, he said, adding: “The bike is a ticket into a social group”.
Other companies, many associated with heritage or legacy products and popular with Chinese tourists in the UK, are exploring the country’s ecommerce market, which is by far the world’s largest.
UK luxury food retailer Fortnum & Mason launched a new store on Chinese social media app Xiaohongshu earlier this year. Kitty Wang, founder of ecommerce and marketing company Shopperholic which is working with Fortnums in China, said she had received enquiries from 10 UK businesses so far in 2025, more than any previous year. “The temperature has changed,” she said.
Foreign businesses entering mainland China must contend with price wars, slowing growth momentum, an unfamiliar online landscape and wider business access issues.
James Muirhead, chief commercial officer at Scottish Leather Group, which already produces for car interiors in mainland China, visited Shanghai earlier this year partly in search of new customers in the auto and aviation industries.
“The price competitiveness of these vehicles is extremely ruthless,” Muirhead said, admitting his company “cannot match some of the homegrown leather price points” — but pointing to “the luxury side of interiors” where it could compete.
Scottish Leather was currently in very close talks with a lot of Chinese carmakers, he added. “We know we’re competing on a global stage.”
Some UK companies are seeking closer integration with what is the world’s dominant manufacturing hub. Reckitt, the consumer goods group behind Durex and other brands, is building a research and development centre in Shanghai, set to open next year, in line with a wider “China for China” shift among foreign companies.
The UK is set to be the country of honour at a trade fair in the coastal city of Xiamen in September, a status that has raised hopes of the first UK-China joint economic trade commission since 2018. Such a commission would present another opportunity to secure deals for British businesses.
“There’s a long list of market-access issues that is now being looked at, that will hopefully open up more commercial activities,” said Tom Simpson, managing director at the China-Britain Business Council in Beijing, citing Chinese tariffs as well as Beijing’s treatment of professional qualification businesses and legal and accountancy firms.
Within mainland China, economic uncertainty has added to pressure on consumer spending. But British companies will balance that against modest growth prospects at home.
“I don’t think wine as a category in China is any weaker than anywhere else,” said Ashton of 67 Pall Mall, who expects to benefit in the “longer run” from a shift in Chinese demand away from baijiu and other spirits.
Shanghai, in particular, had “quite a vibrant economy” and local authorities that were keen to collaborate, he said. “I’m being guided by people who have a vested interest in making sure this building works economically.”
Stuart Dunn, executive director of the British Chamber of Commerce Shanghai, said government favour could make doing business in China much easier.
“In China it moves from the top down,” Dunn said. “If senior ministers and the political environment [are] happy then people are going to do business with you.”
