A visit to China by Chancellor Phillip Hammond has been called off amid reports a speech by the UK's defense secretary angered Beijing. There were plans for trade talks between Mr Hammond and senior Chinese government figures during the brief visit this week. But last week, Gavin Williamson had indicated the UK's intention to send an aircraft carrier to the Pacific.
An MoD source has denied the visit was scrapped because of the speech. A Treasury spokesperson said: No trip was ever announced or confirmed.
In the speech, Mr Williamson announced the HMS Queen Elizabeth would be deployed to the region, as well as the Middle East and the Mediterranean, on its maiden voyage.
China is currently involved in a dispute over territorial claims in the Pacific. Six countries have competing claims over the South China Sea islands.
Mr Williamson also said that China was developing its modern military capability and its commercial power.
Unconfirmed newspaper reports claimed the Chinese government was unhappy about the speech. But an MoD source told BBC political correspondent Ben Wright it was not the case that the speech had led to the visit being cancelled. The speech was seen and cleared by both Number 10 and the Treasury, the source said.
Prime Minister Theresa May visited China for three days last year in a bid to boost trade and investment. Ahead of the trip, she said her visit would intensify the golden era in UK-China relations.
Speaking at the time, she said she expected China to play a huge role in the economic development which is why she would be deepening co-operation with China on key global and economic issues.
UK trade with China has increased dramatically in recent years, and the government will be hoping to build on that rise after Brexit when the UK will look to complete more bilateral trade deals.
In 2018, China was the UK's fourth largest trading partner behind Germany, the US and the Netherlands, according to HMRC figures for imports and exports. UK-China trade was worth £63.4bn. The UK ran a trade deficit of £21.8bn with the country last year.