During the summer’s Conservative leadership contest, the prime minister declared that China was “the biggest long-term threat to Britain and the world’s economic and national security” and pledged a range of measures to counter its influence.
But at the G20 summit in Indonesia, he significantly dialed down his rhetoric, saying that China was “undoubtedly the biggest state-based threat to our economic security”, but that in national security terms it was a “systemic challenge” rather than a “threat”.
His comments brought the UK into alignment with a recent US assessment, and made clear that Mr Sunak will not pursue predecessor Liz Truss’s plan to upgrade China to a “threat”, alongside Russia, in Britain’s official Integrated Review on security, defence and foreign policy priorities.
Former Conservative leader Sir Iain Duncan Smith, who is among a group of British MPs sanctioned by Beijing, warned the PM against lowering the UK’s guard against China.
“He said in the summer, categorically, that he considered China to be a systemic threat,” Sir Iain told TalkTV . “What we’re seeing here at the moment, I think, is the beginnings of a step away from his original position.
“I hope he’s not about to do a U-turn, it would be completely wrong. And it would become really appeasement of China, which is what’s happening in government at the moment.”
Mr Sunak’s efforts to dial down tensions with Beijing echoed the stance of Joe Biden in his first in-person talks as president with his Chinese counterpart Xi Jinping, in which he attempted to position the relationship between their two superpowers as one of competition, not conflict.
It came as he stressed the need for “dialogue” with Beijing on global issues like climate change, recovery from Covid and Russia’s war in Ukraine.
Speaking to reporters who travelled with him to the summit venue of Bali, the prime minister at one point used the phrase “systemic threat” to describe China, but swiftly corrected himself to “systemic challenge” and used that terminology for the remainder of his comments.
“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,” said Mr Sunak. “I think that view, by the way, is highly aligned with our allies.”
He said it was important for the UK to take action to defend itself against China’s economic influence, citing the National Security Investment Act, which gives the government a greater ability to block Chinese takeovers of businesses of national significance.
But he added: “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.”
The apparent bid to de-escalate tensions came as Mr Biden took a conciliatory tone in his eve-of-summit meeting with Mr Xi in a luxury Bali hotel.
After talks stretching more than three hours, Mr Biden said there need not be a “new Cold War” with China and said he did not believe that Beijing had imminent plans to invade Taiwan.
For his part Mr Xi – travelling abroad for only the second time since the start of the Covid crisis – said that China-US relations “should not be a zero-sum game in which you rise and I fall”.
Instead, he said: “The wide Earth is fully capable of accommodating the development and common prosperity of China and the United States.”
Mr Xi gave no ground on Taiwan, warning Mr Biden that it was “the first red line in US-China relations that cannot be crossed”.
His comments followed tensions surrounding a visit to Taiwan by House speaker Nancy Pelosi in August, which fuelled fears of confrontation over the island, which is self-ruled and enjoys its own close trade relations with the US but is claimed by China.
But, in a welcome diplomatic breakthrough for the West, Mr Xi took a notably tougher stance on Russia, joining Mr Biden in condemning Moscow’s nuclear threats against Ukraine.
Like Ms Truss, Mr Sunak is committed to a refresh of the Integrated Review, and he said that issues relating to China would be considered as part of this.