RISHI Sunak appeared to tone down tensions with China calling them a “systemic challenge” - as he leaves open the chance of meeting President Xi at the G20 summit.
The Prime Minister drew a sharp contrast compared to his predecessor Liz Truss who was set to classify the country as an 'official threat'.
Mr Sunak had previously said that for too long countries had “rolled out the red carpet” and turned a blind eye to their underhand activities.
But he outlined how the UK must work WITH China to deal with the most pressing issues such as climate change or dealing with Russia over Ukraine.
The stance is likely to draw criticism from several anti-China Tory MPs who have highlighted the country's security and human rights abuses.
The PM, speaking on his way to the G20 summit in Indonesia, said: “I think that China unequivocally poses a systemic threat — well, a systemic challenge — to our values, and our interests and is undoubtedly the biggest state-based threat to our economic security, let me put it that way.
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“That’s how I think about China. That’s what I said over the summer, that’s why it’s important that we take the powers that we need to defend ourselves against that.
“For example the National Security Investment Act is a good example of that.
“But I also think that China is an indisputable fact of the global economy and we’re not going to be able to resolve shared global challenges like climate change, or public health, or indeed actually dealing with Russia and Ukraine, without having a dialogue with them.”
When pushed on whether he was ready to reclassify the country as a threat, he added: “My view is that China poses a systemic challenge to our values and interests and it represents the biggest state-based threat to our economic security.
“I think that view, by the way, is highly aligned with our allies.”
The UK is set to present its Integrated Review by the end of the year updating its defence and foreign policy positions.
David Cameron spoke of a 'golden era' of relations with China when he was in Downing Street.
Mr Sunak's views appeared to echo that of US President Joe Biden who met President Xi ahead of the summit on Monday.
Biden said he wasn’t looking for another Cold War ahead of tensions surrounding Taiwan.
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Speaking on the eve of the G20, Mr Sunak left open the possibility of meeting President Xi during his time at the two-day summit.
Mr Sunak also didn’t rule out sending arms to Taiwan. He said: “We’re looking at all of these policies as part of our refresh of the integrated review.
“Our policy on Taiwan is obviously there should be no unilateral change to the status and there should be a peaceful resolution to that situation.
“We stand ready to support Taiwan as we do in standing up to Chinese aggression.”