BRICS Industrial Intelligence

Bottom Line

This week's key geopolitical development is UK Prime Minister Starmer's visit to China, marking a significant thaw in China-UK relations after years of stalemate, with a series of agreements signed covering trade, agriculture, and investment. Investors should monitor the potential spread of this "selective engagement" model to other European countries, as it will directly impact market access, supply chain diversification decisions, and cooperation prospects in key sectors such as green technology.

Key Developments

First UK Prime Minister Visit to China in Eight Years, Multiple Cooperation Agreements Signed — UK Prime Minister Starmer paid an official visit to China from January 28 to 31, during which both sides agreed to establish a long-term and stable comprehensive strategic partnership and signed 12 intergovernmental cooperation documents covering trade, agriculture, investment, and other fields. Investment Relevance: This directly reduces short-term political risks for UK investments in China, creating a more favorable official environment for financial services (e.g., accompanying HSBC), pharmaceuticals (AstraZeneca), and potential infrastructure projects. This serves as a significant indicator of a shift in European policy toward China from "de-risking" to a more pragmatic "engagement."
China Considers Unilateral Visa-Free Policy for UK Citizens — As one outcome of bilateral cooperation, China is actively considering implementing a unilateral visa-free policy for UK passport holders, allowing for tourism or business visits of up to 30 days. Investment Relevance: If implemented, this policy would significantly reduce the cost and time barriers for business exchanges, benefiting all industries reliant on executive visits, technical exchanges, and market expansion, particularly IT services, high-end manufacturing, and professional consulting.
Experts Comment That Western "Decoupling" Attempt Has Ended — Domestic think tank experts, citing recent intensive visits to China by leaders from the US and multiple European countries, noted that the Western strategy to "decouple" from China has failed, with dialogue and cooperation re-emerging as dominant themes. Investment Relevance: If this narrative gains widespread acceptance in the international business community, it may slow the pace of supply chain relocations by multinational corporations due to political pressure, providing stability expectations for multinationals with significant assets in China. However, targeted restrictions under the "de-risking" framework, such as controls on specific technologies, will persist.
Global and Domestic Gold Demand Hits Record High in 2025 — According to the World Gold Council, driven by geopolitical and economic uncertainties, global gold demand reached a new high of 5,002 tonnes in 2025, with particularly strong demand in the Chinese market at 1,180 tonnes. Investment Relevance: This reflects deep-seated risk aversion in the market, directly benefiting the mining sector, especially gold mining companies. Strong domestic demand also highlights Chinese investors' preference for physical assets amid external uncertainties.

Sector Implications

Sector	Impact	Key Concern
IT	Positive	Improved market access and potential opportunities for cross-border data flow cooperation
Mining	Positive	Risk aversion driving gold demand; diversification cooperation in critical mineral supply chains
Energy	Neutral	Traditional energy cooperation not a focus; green energy technology cooperation may have long-term potential

Details:

IT: The warming of China-UK relations may open a window for limited cooperation in the technology sector, particularly in commercial software, fintech, and digital applications where no major disagreements exist. However, the main lines of high-tech competition and controls involving core semiconductors, AI governance, and data security will not change. Investors must distinguish between the parallel tracks of "commercial cooperation" and "technology security."
Mining: Sustained high gold demand directly supports the profit prospects of gold mining companies. Additionally, under the framework of the "comprehensive strategic partnership," China and the UK may explore cooperation in investing in and developing critical minerals (e.g., lithium, cobalt) in third countries, though this will face stringent national security reviews.
Energy: This diplomatic outcome did not highlight traditional energy (oil and gas) cooperation, limiting short-term impact on energy investments. Long-term, possibilities for cooperation in green energy sectors such as nuclear power, offshore wind, and grid technology may increase, but this depends on complex regulatory coordination and building technical trust.

Geopolitical Pulse

Indicator	Assessment	Trend
Diplomatic Climate	Warming	Improving
Sanctions Risk	Moderate	Stable
Regional Stability	Stable	Stable
Key Dynamic	"Selective Engagement" with the West and Economic Pragmatism	—

Risk Watch

[2-3 geopolitical risks. For each:]

China-UK Cooperation Deliverables Fall Short of Expectations — Despite signing multiple documents, the implementation of specific projects may be constrained by domestic political pressure in the UK, national security reviews (e.g., the National Security and Investment Act), and coordination pressure from international allies, particularly the US. Timeline: Medium-term. Probability: Medium.
Unexpected Escalation of Geopolitical Tensions — The Chinese Ministry of National Defense's strong statement that "any attempt to contain China is doomed to fail" reflects an uncompromising stance on surrounding waters and global strategy. Unexpected friction with third parties (e.g., US allies in the Asia-Pacific) could suddenly intensify, disrupting market sentiment and supply chains. Timeline: Near- to medium-term. Probability: Medium.
Internalization of External Pressure Leading to Policy Tightening — In response to external containment pressure, China may further strengthen domestic regulations and self-reliance policies in areas such as data security, cybersecurity, and industrial subsidies, increasing compliance costs and market uncertainty for foreign enterprises. Timeline: Long-term. Probability: Medium.

Outlook

Key Dates and Events to Monitor:

Late February 2026: German Chancellor Merz plans to visit China. Observe whether Europe's largest economy follows the UK's pragmatic engagement approach and whether a unified EU economic and trade framework toward China will be proposed.
November 2026: US election results. This will have a fundamental impact on the global alliance system and technology control policies toward China, representing the most significant variable for assessing medium- to long-term geopolitical risks.
China's "Two Sessions" in 2026 and important political agendas in the second half of the year: Monitor new industrial and economic security policies issued under the balance of "development and security."