Brexit and the Future of China-UK Relations
The United Kingdom formally left the European Union In January 2020. UK’s relations with China are gaining more importance in its foreign strategy. How to cope with the changes brought about by the Brexit and properly handle China-UK relations has also become an urgent issue for China to think about while it makes strategic plans for developing majorcountry relations.
UK’s Choice of Foreign Strategies upon the Background of Brexit
Brexit marks the UK’s continuing efforts to define its international role after the World War II. By Brexit, the UK deviates from its post-war diplomatic tradition of integrating into Europe. As Brexit has brought about revolutionary changes that are fairly profound and extensive to the UK’s domestic and foreign policies, the country has arrived at a moment when it has to choose its foreign policy direction.
To grasp the UK’s foreign strategy direction in the post-Brexit era, the concept of “Global Britain” is a critical reference. This concept emphasizes that the
UK after Brexit will be released from the shackles of European integration and will continue to actively engage and play a leading role in international affairs. However, the concept of “Global Britain” has aroused considerable controversy since its initiation. Some criticized it as a reflection of the British Empire nostalgia, while others criticized it as analgesics prescribed by the British government to mitigate British people’s anxiety over the loss of the country’s supremacy.
Nevertheless, “Global Britain” still reflects the basic consensus within the UK on the future direction the country will take. It remains a long-standing question for debate whether Britain is a major power or a middle power in the international system. Undergoing the shock Brexit, will UK further slide into decadence? Or will it engage in the global system in a more active and constructive way to cushion the shock of Brexit? The UK boasts the diplomatic tradition of overcoming the constraints of its resource to wield greater international influence. It is a realistic choice for British diplomacy to effectively engage in and push forward benign interactions with major powers in the global system in such fields as strategy, economy, culture and people-to-people exchanges.
In 2019, the UK was overtaken by India and became the sixth largest economy in terms of GDP. In perspective of such quantitative indicators as GDP, population, and territory, the UK suffers conspicuous constraint in its pursuit of the major country status. After Brexit, the UK needs to leverage on innovating its foreign relations and exert its influence through the benign interaction with major powers.
At present, the uncertainties presented by Brexit to the UK’s foreign policy haven’t been cleared up and the possibility still exists that the UK and the EU fail to reach agreement in economy, trade and other key sectors after the transition period. However, on the whole, the UK will endeavor to maintain close economic, trade and security cooperation with the EU, but the highly integrated single market, customs union and common foreign and security policy will cease to be accessible.
On UK’s relations with the United States, the special relationship is rela
tively stable, but the room for considerable improvement is quite limited. In comparison, the potential for the UK to advance its relations with the Asia Pacific region, especially with China, is enormous. According to UK-released statistics, UK’s exports to China accounted for 3.5% of its total exports in 2018 and the imports from China made up 6.6% of its total. China is its sixth largest export destination and the fourth largest source of imports. But at the end of the 20th century (in 1999), China ranked only 26th of UK’s export market and the 15th of its import source. As the UK engages in global affairs in a more independent posture, how the UK and China interact on bilateral issues and global governance will be crucial to UK’s efforts to reshape its role as a global power.
Opportunities for Advancing China-UK Relations in the Post-Brexit Era
After Brexit, China and the UK are facing new opportunities for advancing strategic coordination, pragmatic cooperation and people-to-people exchanges.
Firstly, China and the UK will further improve their strategic coordination. During Chinese President Xi Jinping’s visit to the UK in 2015, the two countries upgraded their relations to “a global comprehensive strategic partnership for the 21st Century” and ushered in a “golden era” of bilateral relations.
As the UK gains more independence after Brexit, it enjoys greater potential to wield influence on the international strategic landscape. “Brexit”, in a sense, has prompted adjustment to the interaction among the UK, the US, the EU, Russia and other major powers. China upholds the concept of a community with a shared future for humanity and puts forward the Chinese solution for global governance. China and the UK could use this window of opportunity to build new-type international relations and on this basis, deepen global cooperation in the fields of security, economy, trade and environment.
In the security sector, both as the permanent members of the UN Security Council, China and the UK shoul
der weighty responsibilities on antiterrorism and nuclear non-proliferation among other issues. In economy and trade sector, both countries jointly promote free global trade, uphold multilateralism and push forward the building of an open world economy. In the face of such common challenges as climate change and public health, China and the UK share enormous space for advancing international cooperation.
Upon the backdrop of “Brexit”, the window period for Johnson Administration to adjust foreign policies and shape UK’s position as a major power coincides with the period of opportunity to advance and materialize the “golden era” of China-UK relations. High-level bilateral interaction should play the leading role and top-level design and communication should be strengthened. The two countries should continue to bring into full play the indispensable role of the annually-held heads of state meeting and such high-level mechanisms as economic and financial, cultural and people-to-people and strategic dialogues.
Secondly, China and the UK enjoy a high degree of economic complementarity and constantly expanding space for pragmatic cooperation. A bilateral free trade area is of high expectation with its breakthrough significance and economic and strategic value. For the UK, reaching a mutually beneficial trade agreement is undoubtedly an important approach to add weight to the legitimacy of Brexit. In the meantime, as its trade talks with the Brussels failed to produce expected outcome, the UK needs to diversify its industrial chain and value chain to adsorb the shock of Brexit.
For China, deepening economic and trade cooperation with such an important developed economy as the UK is of significance to advancing globalization and promoting further opening of the world economy. China and the UK are expected to make new breakthroughs in key areas such as finance, science and technology, where they enjoy remarkable complementarities. After Brexit, London’s role as a global financial center will face a series of challenges.
Germany and France may impose restrictions on the free access of London’s financial institutions into the single market. The City of London has been expanding offshore RMB business in recent years and has developed into the largest foreign exchange transaction hub for offshore RMB. The “ShanghaiLondon Stock Connect” and currency swap deal signed by Chinese and British governments have facilitated bilateral financial cooperation and sped up the internationalization of RMB. A host of measures introduced by China to deepen the opening up of such modern service industries as finance also help create better conditions for British financial institutions to operate in China. In terms of scientific and technological cooperation, China and the UK boast respective advantages in environmental protection, bio-pharmacy, financial technology and artificial intelligence and thus have vast space for investment and R&D cooperation.
In addition, the proactive fiscal policy pursued by the Tories-led British Government after Brexit has opened up new opportunities for pragmatic cooperation between China and the UK. After the general election in December 2019, the Conservative government ended nearly decade-long austerity policy to kick off public well-being and infrastructure projects that had been disrupted by Brexit. The 2020 budget features a substantial increase in infrastructure and public service expenditure. As UK’s Norther Powerhouse, high-speed rail project, nuclear power development and national medical system reform go full steam ahead, they not only unleash plenty of opportunities for Chinese enterprises to participate, but also enable China and the UK to better connect their development strategies and expand bilateral pragmatic cooperation.
Thirdly, cultural and people-to-people exchanges play an increasingly remarkable role in tightening people-to-people bond. At present, the stance towards China is somewhat divided within the UK, but the British government, mainstream business community and think tanks are making ever growing voices calling for cementing relations with China. UK Prime Minister Boris Johnson stated on many occasions the UK is enthusiastic about the Belt and Road Initiative(BRI) and that the BRI means more business opportunities for the UK. The report jointly presented by the China Britain Business Council and the Tsinghua University shows that China-UK cooperation through the Belt and Road Initiative has achieved practical results, especially in tripartite financing cooperation.
China and the UK share the common view to strengthen cultural and peopleto-people exchanges and solidify the public opinion foundation for advancing bilateral relations. China-UK highlevel cultural and people-to-people exchange mechanism is gradually institutionalizing and normalizing. The mechanism has expanded to cover the cooperation in such fields as education, science and technology, health, culture, media, sports, youth, women, civil society, tourism and sub-national cooperation. In the field of basic education, China and the UK have carried out teachers exchange program and China-UK sister school partnership programme. In the field of higher education, China and the UK have made fruitful results in jointly running universities and colleges, such as the University of Nottingham Ningbo China and the Peking University HSBC Business School Oxford Campus. Confucius Institutes are large in scale, strong in teaching staff and textbooks and experienced in cultural and academic exchanges, and thus serve as a comprehensive platform for cultural and people-to-people exchanges and higher learning cooperation. In the field of health care, the two countries regularly hold events such as the ChinaUK Global Health Dialogue, China-UK Life Science and Medicine Summit and China-UK Health Policy Dialogue.
Constraints on Advancing China-UK Relations in the Post-Brexit Era
The interplay between the UK’s diplomatic tradition and the Brexit will also restrict the deepening of China-UK
relations.
First, upon the background of Brexit, the UK’s policy toward China will remain double-sided. Geopolitically, after Brexit, the UK will highlight its role as a global power and a core country in the western hemisphere. In the field of regional security, it will be keen on interventionism. In its diplomacy with China specifically, it will shift between pursuing balanced diplomacy and seeking quick success and instant benefits. The UK might still use “maintaining freedom of navigation” and “upholding rules-based international order” as excuses to increase its presence in the South China Sea through intervention and patrolling. On Hong Kong, Tibetand Xinjiang-related issues, the UK might sometimes act against China’s core interests.
The UK has reservations and is selfcontradictory in economic cooperation. Cooperation in 5G is a typical example. Some British government officials and members of parliament (MP) were against the government’s decision at the beginning of 2020 to open parts of its 5G market to Huawei. Some Tory MPs submitted an amendment to the House of Commons to ban Huawei’s access into the British market, but failed to pass the vote. When the US government imposed new sanctions on Huawei in May 2020, hardliners in the UK continued to pressure the Johnson Administration. In July 2020, The British government announced that the UK will ban Huawei from supplying kit for 5G networks from the end of this year and remove the existing Huawei equipment from British networks by 2027.
In the debate over whether the global trade is “fair” and “free”, the UK stand together with the US and the EU to pressure China on such issues as investment review, opening up of service industry, technology transfer and intellectual property rights. In March 2019, the Foreign Affairs Committee of the House of Commons issued a lengthy inquiry report on China for the first time in many years. The report holds that China’s growth has posed challenges to the western liberal world order and criticizes the UK government for crowding out national security and values for economic considerations.
The “double-sidedness” of UK’s policy toward China is closely related to its international role orientation and diplomatic tradition. The UK identifies itself as a defender of the West-led international order and a core country and this positioning has not changed because of Brexit. UK repeatedly emphasizes on “maintaining rules-based” international order”, with the real intention to prevent China from “writing international rules”, since China is viewed as a revisionist country and a challenger to the existing order. As China rapidly rises as the world’s second largest economy, the UK, like the US and the EU, has lost the superiority of looking down from the heights. They thus describe China’s success in economic and social development as the result of their opening up markets to China and thus demand China to open its market to the outside in all-round way within a short period of time and accept their rules and norms.
Second, the US is a critical third-party factor that disturbs the development of China-UK relations. The UK government’s policy towards China will be affected by both the future development of Brexit and pressure from the US as the special relationship between the two countries evolve. Upon the backdrop of Brexit, the UK government will tilt towards the US when it has to balance its strategic relations with the EU, the US and China and thus the UK-US relations will grow stronger. The US also expects the UK to play a more crucial role in geopolitical containment and trade, science and technology and financial wars against China.
When the US created trade frictions and launched trade wars against China, the US urged its allies to form a “united front” to jointly pressure China on trade. The US stipulates in the trade agreements with Mexico, Canada, Japan and other countries that the US has the right to terminate the agreements if the signatory countries establish free trade zones with such “non-market countries” as China. Therefore, the UK will face such dilemma in the future negotiations on establishing a China-UK Free Trade Area.
On economic and trade relations, the UK, out of economic considerations and domestic public opinions, will take pragmatic approaches and prioritize profits in its policy choices. For the UK, the top concern is to avoid losing its close ties with the EU after Brexit. However, since the UK-US relationship is asymmetric, the UK is merely an insignificant middleman in the US’ strategic consideration and the UK might miss the opportunity to establish benign interaction with other major countries.
Third, populism may become an emerging challenge to the development of China-UK relations. Viewing the process of Brexit, we can see while the populist movements criticized the defects of European regional integration and globalization, the movements also gradually politicized European issues within European countries. UK’s mainstream political parties cater to the populists’ appeals as a response to the challenge populism poses and thus populism has added weight to UK’s foreign policy-making. British populist groups have raised doubts on employment, environmental impact and production capacity of China-UK cooperation projects.
Some British politicians demanded an overnight solution to the trade imbalance with China and turned down China-proposed gradual solution. Their excuse is they will inevitably compromise to the populists politically; otherwise, populist parties may come to power. These populists find scapegoats for domestic economic and social problems and put forward simplified solutions in the name of people. These solutions fail to help the country address problems concerning British people’s well-being and meet the challenges the country will face in regional and global cooperation, but rather deprive the country of the opportunities coming along with globalization and international cooperation.