Contemporary World (English)

Brexit and the Future of China-UK Relations

- Wang Zhanpeng & Lv Dayong

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.

 ??  ?? For a Britain that pursues economic liberalism and state-building by trade strategy, this tradition in face of the challenge of “Brexit” has gone beyond the geopolitic­al plane, and it is a practical choice for British diplomacy to effectivel­y participat­e in and promote benign interactio­n between major forces in the world system in strategy, economy and people-to-people exchanges. Photo shows that British Prime Minister Boris Johnson chairs the first cabinet meeting after a cabinet reshuffle on February 14, 2020. On February 13, Johnson carried out the reshuffle in which Mr. Rishi Sunak replaced Mr. Sajid Javid as Chancellor of the Exchequer, which was the first change of major cabinet members after Britain officially exited the EU.
For a Britain that pursues economic liberalism and state-building by trade strategy, this tradition in face of the challenge of “Brexit” has gone beyond the geopolitic­al plane, and it is a practical choice for British diplomacy to effectivel­y participat­e in and promote benign interactio­n between major forces in the world system in strategy, economy and people-to-people exchanges. Photo shows that British Prime Minister Boris Johnson chairs the first cabinet meeting after a cabinet reshuffle on February 14, 2020. On February 13, Johnson carried out the reshuffle in which Mr. Rishi Sunak replaced Mr. Sajid Javid as Chancellor of the Exchequer, which was the first change of major cabinet members after Britain officially exited the EU.
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