A behind-the-scenes struggle over UK policy towards China has begun, with Liz Truss, the trade secretary, backing plans, opposed by the Foreign Office, to give the British courts a role in determining whether genocide is happening in Xinjiang province. MPs are due to vote in the new year on the Lords’ all-party amendment to the trade bill, which would give the courts a preliminary role in determining whether a genocide is being committed by a country with whom the UK might sign a trade deal. The Foreign Office (FCDO) is opposed to giving UK courts preliminary power to determine whether genocide is occurring in Xinjiang, or elsewhere, saying this decision rests with competent international courts rather than national governments. But it is claimed Truss is content to back the measure. The Foreign Office is due to present a new cross-government approach to China in the new year. It is focusing on setting stricter obligations on firms trading in Xinjiang to ensure their supply chains do not involve slavery. China has denied repeated claims that Uighur Muslims have been held in detention or re-education camps. Nigel Adams, a Foreign Office minister, told MPs he feared an “asset flight” if ministers rushed to impose sanctions on Chinese officials for their role in the detention of Uighur Muslims in Xinjiang. Adams warned of a risk to the British economy from moving towards individual human rights sanctions against Chinese officials. He said sanctions had to be developed in a responsible way, adding: ‘“It is not right to speculate or rush into the measures. There is a pretty good chance you are going to see asset flight if that is the case.” The minister warned MPs there would be consequences if British firms used forced labour, and promised a cross-government response in the new year. Ministers are looking at civilian fines for companies that do not show due diligence and a corporate duty to prevent human rights abuses. There was “credible, troubling and growing evidence” of forced labour taking place on a significant scale in Xinjiang, said Adams. The province provides more than 20% of the world’s cotton. With two Commons select committees, the foreign affairs select committee and the business select committee, looking into allegations of breaches of international humanitarian law in Xinjiang, British fashion chains are moving to clear up their supply chains. Adams said: “All businesses involved in investing in Xinjiang or with parts of their supply chains in Xinjiang should conduct appropriate due diligence to satisfy themselves that their activities do not support, or risk being seen to support, any human rights violations or abuses.” The Lords’ cross-party amendment, tabled by the Labour peer Lady Kennedy, the former Tory cabinet minister Lord Forsyth and the crossbencher Lord Alton, proposed that the high court should have the power to determine whether the evidential hurdle of genocide is met. It would be for the government to decide if such a ruling required it to withdraw from a prospective trade agreement. The measure is being supported by the former Conservative party leader Iain Duncan Smith. Minsters said in September they would update the Modern Slavery Act 2015 in the new year to possibly include the introduction of civil penalties for companies’ non-compliance, including lack of due diligence. Work on the duties required of businesses, especially the fashion industry, to clean up their supply chains, has not been completed, but ministers insisted they had recognised that the law was too weak and seen as a box-ticking exercise by many firms. As it prepares a broader policy on China, the government is also waiting to see whether the Biden administration in the US will drop the aggressive anti-China rhetoric and economic measures of the Trump government. Jake Sullivan, expected to be the new US president’s national security adviser, has already asked the EU not to go ahead with a planned EU-China investment agreement without first consulting the US. In a tweet, he urged “early consultation with our European partners on our common concerns about China’s economic practices”. The EU external affairs commissioner, Josep Borrell, had said an agreement was likely to be made by the end of 2020, but many critical of China regard any such deal as a setback for those wanting labour rights to be part of the EU trading relationship. A Department for International Trade (DIT) spokesperson said: “These reports are untrue. DIT and the FCDO are completely aligned on our policy towards China.”