Jun Du

Professor of Economics Aston University

Birmingham

Professor Du's main research interest is to understand the driving forces and impediments of productivity enhancement and economic growth.

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Spotlight

Feb 4, 2026

2 min

Aston University economists say Prime Minister can reduce UK trade vulnerability with China visit

Greenland episode exposed UK’s lack of effective response to economic coercion from allies Research shows tariff retaliation would have cost the average UK household up to £324 per year Economists say China visit is “portfolio risk management” – diversification reduces vulnerability. The Prime Minister’s visit to China – the first by a British PM since 2018 – is an opportunity to reduce the UK’s vulnerability to economic coercion, according to new research from Aston University. A policy paper from Aston Business School’s Centre for Business Prosperity analyses the January 2026 Greenland tariff episode, when President Trump threatened and then withdrew tariffs on eight European countries. The researchers found that the UK had no good options: retaliation would have made Britain worse off, while absorbing the tariffs left Europe without credible deterrence. Director of the centre for business prosperity, Professor Jun Du, said: “The Greenland episode was a wake-up call. When your principal security ally threatens economic coercion, the old assumptions about who is safe and who is dangerous no longer hold. “The PM’s China visit should be framed as portfolio risk management – building diversified trading relationships that reduce the UK’s exposure to any single partner. Just as investors don’t put all their money in one stock, countries shouldn’t put all their trade into one basket. A UK with multiple strong partnerships is harder to pressure, whether the pressure comes from Washington or Beijing.” The research found that coordinated UK–EU tariff retaliation would have cost British households up to £324 per year – the worst outcome modelled. But the authors argue that Europe has untapped leverage elsewhere: the US runs a €148 billion annual services surplus with the EU, and mutual investment exceeds €5.3 trillion. Associate professor of economics and co-author, Dr Oleksandr Shepotylo, said: “Tariff retaliation fails because it hurts consumers and distorts the economy – the retaliator suffers similarly to the target. But Europe has cards it isn’t playing. Services, investment screening, and regulatory access are pressure points where Europe can respond effectively.” UK exports to China fell by 10.4% in the year to Q2 2025, with goods exports down 23.1% – the sharpest decline among major trading partners. The researchers argue that this closes off the UK’s largest alternative market at precisely the moment US reliability is in question. The paper identifies three priorities for UK policy: Recognise the permanent incentives behind US tariffs. US tariff revenue hit $264 billion in 2025. Trade negotiations alone cannot resolve revenue-driven policy. Build UK–EU coordination on non-tariff instruments. Services, investment, procurement, and regulation offer leverage that tariffs do not. Treat China engagement as portfolio risk management. Concentration in any single market creates vulnerability. Diversification is not about picking sides – it’s about resilience. Professor Du added: “The question for the Prime Minister is whether to use this breathing space to build resilience – or wait for the next Greenland.” To read the policy paper in full, click on this link:

Sep 17, 2024

3 min

EU-UK Trade Deal continues to stifle trade with 27% drop in exports since 2021

New report shows persistent stifling effects of the impact of the Trade and Cooperation Agreement on UK-EU trade relations Monthly data show a 27% drop in UK exports and a 32% reduction in imports to and from the EU between 2021 and 2023 Recommendations for policy interventions include to negotiate sector-specific deals, engage with individual EU countries, and work on reducing non-tariff barriers A comprehensive analysis by researchers at the Centre for Business Prosperity at Aston University reveals that negative impacts of the UK-EU Trade and Cooperation Agreement (TCA) have intensified over time. The new report, Unbound: UK Trade Post Brexit, also shows a 33% reduction in the variety of goods exported, with the agricultural, textiles, clothing and materials sectors most affected. To assess the impact of the UK-EU TCA, the authors analysed monthly import and export between the UK and the EU, from January 2017 to December 2023 and separated into preand post-January 2021 when the agreement came into force. The monthly data shows a 27% drop in UK exports and a 32% decline in imports from the EU. Lead author, Professor Jun Du of Aston University says: “The Trade and Cooperation Agreement introduced substantial barriers and there are ongoing and marked declines in the value and variety of UK exports and imports. Without urgent policy interventions, the UK’s economic position and place in the global market will continue to weaken.” The UK-EU TCA redefined trade and investment rules and market access between the UK and the EU. Since it came into force, the UK government has negotiated several trade agreements, but the EU remains the UK’s largest trade partner. Exports for most sectors have decreased since January 2021, although the impact is varied. Agrifood, textile and clothing and material-based manufacturing have been among the hardest hit, with substantial declines in both export value and the variety of products exported. At the same time, some sectors such as tobacco, railway and aircraft manufacturing have seen modest increases in varieties of products exported. On the import side, most sectors have shrunk in both value and variety, particularly agrifood products, optical, textile and material-based manufacturing. A few sectors, for example, ships and furniture, have demonstrated noticeable increases in import product variety. The large variations across different goods categories and EU trade partners underscore the uneven effects of Brexit and the TCA on UK-EU trade dynamics, highlighting the need to understand the nuances and come up with tailored strategies that address the unique challenges of each sector within the new regulatory environment. The researchers make recommendations, outlining how sector-specific negotiations, streamlining customs procedures with digital technologies and reducing regulatory divergence could mitigate some of the impacts. Dr Oleksandr Shepotylo, the report’s co-author says: “Our findings indicate a decoupling of the UK from key EU final goods markets, accompanied by a shift in UK supply chains toward geographically closer EU trading partners for exports and smaller countries for imports. “This shift raises concerns and underscores the urgent need for a strategic reconfiguration of UK supply chains to maintain competitiveness.” Professor Du continues: “The TCA has introduced considerable barriers to UK-EU trade, particularly through increased Non-tariff measures (NTMs). “Addressing these issues through targeted improvements to the TCA is crucial to ensuring that UK businesses remain competitive in the European market. A structured, multi-faceted approach is necessary.” To find out more about these findings, click here.

Apr 26, 2024

4 min

Veterinary deal would increase UK agrifood exports to EU by more than a fifth, research shows

A veterinary deal would increase agri-food exports from the UK to the EU by at least 22.5%, say researchers Agri-food exports overall are worth £25 billion to the UK economy, but the two years since the new trading rules were put in place have seen a fall of 5% in exports to the EU from 2019 levels, during a period where the sector has otherwise grown. Team from Aston University and University of Bristol have analysed trade deals and export figures worldwide to estimate impact of a new veterinary deal on UK–EU exports A veterinary deal with the European Union could increase UK agricultural and food exports by over a fifth, according to new research. The team, from Aston University’s Centre for Business Prosperity and the University of Bristol, analysed the agricultural and veterinary aspects of trade deals around the world to estimate their impact on exports. They then modelled the potential impact of different types of agreement on UK exports to the EU. Veterinary Agreements specifically focus on regulations and standards related to animal health and welfare, as well as to the safety of animal-derived products such as meat, dairy, and seafood. They aim to align, harmonise, or recognise veterinary requirements and certifications, and reduce the number of inspections between countries to facilitate the safe and efficient trade of live animals and animal products. The EU–UK Trade and Cooperation Agreement (TCA), implemented in January 2021, eliminates tariffs and quotas but does not remove non-tariff barriers to trade. These can be particularly burdensome for agricultural and animal-derived food (agri-food) exports, involving complex rules and requirements, production of extensive documentation and veterinary checks. The UK agri-food sector is a cornerstone of the UK economy, with exports worth £25 billion and employing 4.2million people. Although the sector is growing overall, exports to the EU shrank in 2022 by 5% compared to 2019, in part due to the new trade arrangements. This has led to calls for an EU–UK veterinary agreement from business and agri-food organisations, including the Confederation of British Industry, British Chambers of Commerce, UK Food and Drink Federation, Chartered Institute of Environmental Health and British Veterinary Association. Analysing data from the World Bank on 279 trade agreements and export statistics from over 200 countries, the researchers found that shallow agreements, that went little further than provisions already covered by World Trade Organisation (WTO) rules, had significant negative impacts on agri-food exports. However, where trade agreements went beyond WTO provisions to include more commitments on sanitary and phytosanitary (SPS) measures (which aim to protect countries against risks relating to pests, diseases and food safety) and were legally enforceable, they had a robust, positive impact on exports, particularly exports of animal products and food. Applying this to the UK–EU relationship, the team estimate that a veterinary agreement that went beyond the existing TCA provisions would increase agri-food exports from the UK to the EU by at least 22.5%. Imports from the EU would also increase by 5.6%. In the 203 countries studied for the research, positive effects of deep trade deals that included provisions on agriculture took between 10 and 15 years to manifest. But the UK might not have to wait so long, according to report co-author Professor Jun Du, Director of Aston University’s Centre for Business Prosperity. “There is no blueprint out there that mirrors the UK–EU relationship. Most veterinary agreements are agreed as part of a trade deal between countries that haven’t previously had close alignment and it takes a while for the benefits to take effect. “Until recently, the UK had frictionless agri-food exports to the EU, so it’s possible that a supplementary veterinary agreement to reduce some of the frictions created by Brexit could allow trade that previously existed to pick up again quite quickly.” However clear the economic arguments, the legal and political barriers to a veterinary agreement still remain. The researchers address these in their report, suggesting that the best format for the additional measures would be as a supplementary agreement to the TCA. The key question for the UK government in negotiating such an agreement would be what the EU demanded in return. “The closest model is the EU-Swiss relationship, which sees Switzerland largely follow EU law,” said report co-author from the University of Bristol, Dr Greg Messenger. “That’s unlikely to be an option for the UK. As we wouldn’t expect to eliminate all paperwork, we could both agree that our rules meet each other’s standard for phytosanitary protection. As most of our rules are still essentially the same as the EU, that wouldn’t require any major change, though we’d have to agree a greater level of coordination in relation to the development of new rules.” The report was written jointly by Professor Du, Dr Messenger and Dr Oleksandr Shepotylo, senior lecturer in economics, finance and entrepreneurship at the Centre for Business Prosperity, Aston Business School.

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Biography

Jun Du is Professor of Economics at Aston Business School. Jun is an applied economist whose main research interest is to understand the driving forces and impediments of productivity enhancement and economic growth, from multi-level dimensions of individuals, firms, industries, regions, governments, and their interplays, in both developed and emerging economic contexts (China in particular). She has expertise in applied econometric methodologies using micro-data from both developed and developing countries. Jun held a visiting research fellowship in Stockholm School of Economics and is linked with Chinese Social Science Academy. She is also a research fellow in Advanced Institute of Management, and member of several professional bodies. Jun published in International Journal of Industrial Organization, Research Policy, Journal of Productivity Analysis, Entrepreneurship Theory and Practice, Journal of Law, Economics and Journal of Business Venturing and International Journal of Business Studies. Her research has received external funding from the Economic and Social Research Council (ESRC), Leverhulme Foundation, NESTA foundation, and various UK government agencies including UKTI, DTI and BIS, local governments (Manchester, Birmingham and West Midlands local authorities), as well as from the private sector. She led the productivity research projects in the Business Demography Research theme in the UK Enterprise Research Centre (ERC), and currently the Director of the Lloyds Banking Group Centre for Business Prosperity (LBGBP) leading on projects on the UK firm international trade, innovation and productivity.

Areas of Expertise

Economics

Trade

Education

University of Leicester

PhD

Economics

2006

Cardiff Business School

MSc

International Economics, Banking & Finance Cardiff

2002

Inner Mongolia University

Economic Management

1999

Media Appearances

Are individualistic societies worse at responding to pandemics?

The Conversation online

2020-10-13

UK Prime Minister Boris Johnson recently suggested that coronavirus infections are higher in the UK than Germany or Italy because Britons love freedom more, and find it harder to adhere to control measures.

Implementation a “big problem” for any Brexit deal, UK inquiry told

Global Trade Review online

2020-06-11

Jun Du, professor of economics at Aston Business School, says UK firms “seem to be defying conventional theories of trade gravity”, whereby most companies trade with markets that are geographically close.

Brexit: UK's smallest firms divert £10bn in exports away from EU

The Guardian online

2020-06-01

Jun Du, professor of economics at Aston Business School, said: “This evidence suggests that UK exporters are jumping before they’re pushed – finding alternative markets worldwide for their products even before we know the outcome of the current UK-EU trade negotiations and any potential new barriers.

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Articles

Selection, Staging, and Sequencing in the Recent Chinese Privatization

The Journal of Law and Economics

Jun Du, Xiaoxuan Liu

2015-08-01

Selection in privatization is the decision-making process of choosing state-owned enterprises (SOEs), prioritizing and sequencing privatization events, and determining the extent of private ownership in partial privatization. We investigate this process in the important but rarely studied case of China. Using the SOE population for 1998–2008, we track 49,456 wholly state-owned firms and identify 9,359 privatization cases. Our econometric analysis concludes that privatization selection is a complex decision-making process in which local governments balance various economic, financial, and political objectives. In the recent Chinese privatization, firm performance relates to the selection, staging, and sequencing in privatization in an inverted-U fashion. The worst- and the best-performing SOEs are more likely to remain state owned, more likely to maintain higher levels of state holding when privatized, and less likely to be privatized later. These patterns suggest a privatization reform slowdown and underlying changes in the privatization policy.

Subsidies, rent seeking and performance: Being young, small or private in China

Journal of Business Venturing

Jun Du, Tomasz Mickiewicz

2016-01-01

Entrepreneurs in emerging market economies operate in weak institutional contexts, which can imply different types of government. In some countries (e.g., Russia), the government is predatory, and the main risk faced by (successful) entrepreneurs relates to expropriation. In other countries (like China) this kind of risk is lower; nevertheless the government is intrusive, and the rules of the game remain fluid. The implication of the latter for entrepreneurs is that they are more likely to spend time and resources on influence (rent seeking) activities rather than on productive activities. We illustrate this type of government by focusing on the distribution of subsidies in China. We present a simple formal model that explores not only the direct effects of rent seeking for a company but also externalities under a situation of policy-generated uncertainty in the distribution of subsidies. We explore how these effects differ for the entrepreneurial sector (young, private and small companies) compared with other sectors. We posit that while the performance of private companies is more affected than the performance of state firms, the impact of government-induced uncertainty on young and small companies is actually less pronounced. Our empirical analysis, based on a unique large dataset of 2.4 million observations on Chinese companies, takes advantage of the regional and sectoral heterogeneity of China for empirical tests.

Explaining intermittent exporting: Exit and conditional re-entry in export markets

Journal of International Business Studies

Michele Bernini, Jun Du & James H. Love

2016-08-22

Intermittent exporting is something of a puzzle. In theory, exporting represents a major commitment, and is often the starting point for further internationalization. However, intermittent exporters exit and subsequently re-enter exporting, sometimes frequently. We develop a conceptual model to explain how firm characteristics and market conditions interact to affect the decision to exit and re-enter exporting, and model this process using an extensive dataset of French manufacturing firms from 1997 to 2007. As anticipated, smaller and less productive firms are more likely to exit exporting, and react more strongly to changes in both domestic and foreign markets than larger firms. Exit and re-entry are closely linked. Firms with a low exit probability also have a high likelihood of re-entry, and vice versa. However, the way in which firms react to market conditions at the time of exit matters greatly in determining the likelihood of re-entry: thus re-entry depends crucially on the strategic rationale for exit. Our analysis helps explain the opportunistic and intermittent exporting of (mainly) small firms, the demand conditions under which intermittent exporting is most likely to occur, and the firm attributes most likely to give rise to such behavior.