What has been the impact on the UK of the ' China effect.'

GDP growth is raising
The AD will shift to the right, so it is demand pull inflation , therefore the export of UK will increase, if the demand of the products is elastic that import from UK,because people can afford more. But the Chinese government need to reduce the inflation, so they will put tariff ,quota or import control to cut the import, therefore the export of UK will decrease when Chinese government protect import.
Consumer spending increase
People have more money, they would like to travel ,study, invest, or start a small business in UK, so the AD of UK shift to the right it lead to UK macroeconomic performance
-Unemployment goes down
-economic growth
-Inflation as well
-balance of payment: high consumer spending injection to the economic of UK.
Capital investment
In this topic, I think we need considered on international trade, because there are a lot of capital investment in China expressed that the market of trade in China is big, investors can gained lots of reward from there, therefore they wanted to invested in China. Also the market is good means we have high AD of this market,even though domestic and international. For example UK's investors know that British like Chinese tea, there is a market in UK of Chinese tea, so they are interested on the market of Chinese tea, and then the will invest the company which is produce this type of tea. Then they will import it and sell this tea in UK. So I think the demand in this variable market of UK will increase. Therefore if the capital investment in China is high , it may because the economic growth of UK.
The manufacturing wages
The manufacturing wages increase rapidly, that means the employees who work in these types of company will get more money, therefore Chinese people who work in UK may forgone their job in UK and come back to China for this job. Not only Chinese employees but also the other countries workers who work in UK may also think about go to China to work. So the productivity in UK will goes down which means the output will decrease but employees of domestic will increase. But it also effect the current account because people may but more imports than domestic goods. Which is current account deficit.
Interest rate
If the interest rate in China increase, it lead to the exchange rate increase, the saving goes up , but the consumer expenditure goes down. The exchange rate increase, people can spend cheaper on some import products for example, some UK brand product. So exports will increase because the value of exports lower, as opposite, the value of imports get higher, so imports will decrease., this is current account deficit. Also with the interest rate rising, it s more difficult to borrow money form bank, thus the Chinese investor may cut or cancel their investment in UK. Therefore some company of UK will face to some problem, for example production capacity is too small, cash flow or build a new market etc. So the UK's government will use budget deficit that is spending more to encourage the small business or help some company deal with their problem. Because of this the government will increase the tax to correct the balance of payment.