Rachel Reeves has been accused of making Britain a ‘laughing stock’ with her visit to China as critics poured scorn on the £600million investment she secured in Beijing.
The Tories said the Chancellor had ‘come back with next to nothing’ from her trip to Beijing, which she ploughed ahead with despite fresh alarm at her economic plans.
Increases in the Government’s borrowing costs have sparked fears that Ms Reeves will be unable to meet her debt and spending targets.
This could require either tax rises or deeper spending cuts when she delivers a fiscal statement at the end of March.
But Ms Reeves ignored calls for her to cancel her trip to China and take emergency action to deal with the soaring borrowing costs, which has invoked memories of Britain’s 1976 debt crisis.
Her visit, during which she met Chinese vice-president Han Zheng and vice-premier He Lifeng, is the first high-level economic meeting between Britain and China since 2019.
Relations with Beijing cooled under the previous Tory government amid anger about China’s actions in Xinjiang, Hong Kong and over Taiwan.
But Labour have pinned hopes on improving economic ties with Beijing as part of Ms Reeves’ scramble to kickstart the UK economy.
The Chancellor was this weekend warned that support for her position has ‘evaporated’ within Labour as concerns grow at her tax and spending policies.
In his latest column for the Daily Mail, former PM Boris Johnson said it was time for Ms Reeves to ‘collect her P45’ as he accused her of ‘losing the trust’ of bond markets.
At meetings on Saturday, Ms Reeves hailed her trip as a ‘significant milestone’ in Labour’s re-engagement with China, saying she had agreed deals worth £600million to the UK economy over the next five years.
Speaking after her meeting with Mr He, the Chancellor said: ‘The outcomes we have agreed today represent pragmatic co-operation in action.
‘They represent common ground being found on areas like financial services, trade, investment and the climate.’
She added that ‘re-engagement’ with China ‘already sets us on course to deliver up to £1 billion of value for the UK economy’.
The agreements reached on Saturday include deals on financial services, agri-food and cultural exports, along with other areas.
But former Tory leader Sir Iain Duncan Smith told The Sun: ‘We are the laughing stock of the Western world.
‘Europe is toughening up on China and America is going to toughen up on China, so we are going to be the odd one out.’
Fellow Conservative MP Gareth Davies, the shadow financial Secretary, said: ‘She’s flown halfway across the world, and come back with next to nothing to show for it.’
A leading City adviser told the newspaper: ‘There’s a whiff of desperation about it. I’m amazed they think £600million over five years is a good thing.’
As well as the backlash at Ms Reeves’ China trip, the Chancellor is under mounting pressure within her own party over her economic strategy.
She has come under regular attack from businesses over her tax-hiking Budget in October, with claims it has choked off growth.
One Labour MP told The Telegraph: ‘The Government’s whole strategy depends on growth. But there is a lack of confidence.
‘Growth depends on low energy prices, confidence, investment in infrastructure and she has done the exact opposite.’
They added: ‘The support for her has evaporated – even those who supported her at first are now wavering.’
Another Labour MP told the newspaper: ‘I don’t think we can continue like this until the end of the year, let alone for another four years.
‘The whole shtick was about growth and now we are coming up against the harsh reality’.
Tory shadow chancellor Mel Stride this morning claimed he would ‘most definitely not’ have gone ahead with a planned trip to China if he was in Ms Reeves’ position.
He said the Chancellor should instead be ‘trying to give some sense that this Government gets the depth of the problem’ on the gilt markets.
Asked about Conservative former PMs and chancellors that visited China during the last government, Mr Stride told the BBC: ‘They weren’t going to China at a point that our economy was in significant distress.
‘And it is completely wrong for the Chancellor at a point that we have this stress in the bond markets, with the consequences that I set out for people right up and down the country, their living standards, their businesses, their livelihoods, and so on.
‘The Chancellor should be here at her station, reassuring markets and trying to give some sense that this Government gets the depth of the problem and it has some clear plan.’
He added: ‘I would most definitely not be in Beijing or Shanghai at the moment talking to the Chinese, cap in hand for some kind of deal, trade arrangements, etc, at a time that these kind of momentous things are happening around the UK economy.’
