UK-China a balancing act or a decoupling?
In the House of Commons, the government blocked a vote on a ‘genocide amendment’ to the Trade Bill that had threatened to defeat the government. The blocking was described by MPs as ‘cynical to the extreme’.
Exactly what is the UK-China relationship? Is China a risk or an opportunity? UK’s strategy is unclear.
During the Cameron premiership, a UK-China golden era was created, but Huawei, Covid-19, human rights in Xinjiang and Hong Kong have completely changed the UK atmosphere and public sentiment.
Dominic Raab, Foreign Secretary, has been vociferous about the abuse of human rights in Xinjiang. In January, he said, “And our aim is that no company that profits from forced labour in Xinjiang can do business in the UK, and no UK business is involved in their supply chains.” Since 1989, the UK has had a partial arms embargo on exporting specific military goods to China and now extended to HongKong; but Magnitsky-style sanctions on Chinese business have not yet materialised.
On Thursday, China banned BBC World News for alleged serious content violation, apparently the reporting was not true and impartial. It seems China’s regulator, the NRTA objected to the BBC’s report on re-educating women in Uyghur camps in Xinjiang, with gruesome details of heinous rape and torture from detainees who have fled to US via Kazakhstan.
In the House of Commons, the government blocked a vote on a “genocide amendment” to the Trade Bill that had threatened to defeat the government. The blocking was described by MPs as “cynical to the extreme”. David Davis, former Brexit Minister wrote in Conservative Home, “One of the weaknesses of UK’s trade policy is a lack of democratic scrutiny. The government can initiate, negotiate and sign trade agreements without informing Parliament or the public. MPs have no say in setting the mandate for negotiations, and don’t even get a guaranteed debate or vote before they are ratified.”
In the four quarters of Q3 in 2020 total UK to China exports increased by 2.5% to £31.4 billion, and imports decreased by 0.5% to £49.7 billion for the same period. UK reports a reduction to the total trade deficit with China of £18.2billion, thanks to a trade in services surplus. There is significant Chinese investment in the UK in nuclear power infrastructure and telecoms, airports, North Sea Oil, British Steel, Water Gas and Electricity providers and Railways. Chinese companies invest people in the BBC, finance and students (86,000 in 2018-19) in UK universities, as well as in the creative industries. Chinese companies have technology, real estate, manufacturing and pharmaceutical interests in the UK, mostly in London, the North and the Midlands; and London’s financial market has great appeal as the largest foreign exchange hub outside of mainland China.
The UK will surely look at how the US reacts. So far it looks like President Joe Biden and Prime Minister Boris Johnson are in accord. Sounds like they have common goals and interests (climate change, global health and multilateral co-operation, collective defence), the relationship between intelligence agencies is rock solid and UK is still the key ally in NATO, G20 and G7. No sign that President Biden is soft on China, with a specific reference to assertive actions towards Taiwan in the readout of the call to President Xi Jinping. In January, UK applied to join the CPTPP, which gives UK trade terms with US, and with the other members.
Certainly there are enough groups in the UK promoting business, services, trade and commerce with China. The Great Britain-China Centre, sponsored by the Foreign Office, offers legal, political and development expertise on China. The Chopsticks Club provides “knowhow” about doing business in China and networking for Chinese expats in UK. The Conservative Friends of the Chinese is an outreach and engagement programme that “helps to fill the Party’s diversity pipeline and address the shortage of political representation in local and national politics by championing potential British Chinese leaders”. At the moment, there are two
British Chinese Conservative MPs and one Labour. It also has a Parliamentary China Group, formed in 2013 with the Conservative Party leadership, with a view to promoting debate and discussion on China. The 48 Group focuses on helping UK companies understand and benefit from China and its legislative counterpart, the National People’s Congress and has a counterpart organisation in the National People’s Congress in the form of the China-UK Friendship Group. China Chamber of Commerce UK aims to represent China invested business in the UK, protect their interests, and promote the bilateral development of trade and investment between China and the UK. The Department of Education run a Mandarin Excellence programme intended to increase the number of pupils studying Mandarin,
at present 70 schools. And so on…
Misinformation surfaced that Boris Johnson’s chief strategic advisor, Sir Edward Lister was allegedly involved in a conflict of interest over the 2018 acquisition of Royal Mint Court, the new gigantic 5.4-acre Chinese embassy. All sides confirmed Lister did not profit from or take part in the negotiations. From his nonexecutive time at the FCO Lister was acquainted with Ambassador Lui Xiaoming and the expected new ambassador to London, Zheng Zeguang, Vice Minister of Foreign Affairs and a US specialist. With China’s currency objectives and ambitions to dominate the world economy there is a strange irony that this architectural masterpiece that was formerly UK’s Royal Mint will now become China’s HQ in London.
How drastic an uncoupling with China will be possible with the battle to balance trade and investment with a decisive and strategic Global Britain, only Johnson can decide. Until lately, successive UK governments have downplayed the degree that China could pose a threat to national security. The National Security and Investment Bill is due for line-by-line scrutiny in March, and the Integrated Review will define the government’s ambition for the UK’s role in the world and the long-term strategic aims for UK’s national security and foreign policy; these two Johnson initiatives and the 2021 Queens speech will define the trajectory. Johnson wants to go down in history as the Prime Minister who delivered Brexit, beat Covid, launched Global Britain and levelled up society and regenerated the North; how will he tackle China?