History tells us we should trust China at our peril
IT’S A SOBERING thought that, within just 20 years, China will overtake the US to become the world’s largest economy. And it’s a fact which hasn’t been missed by Foreign Secretary Jeremy Hunt. “Jeremy knows that by 2035 the world’s largest economy will no longer be our special ally, the US,” said a source close to him last week. “It won’t even be a democracy and we have to prepare ourselves for this.”
This stark reality has left Britain trying gingerly to keep its balance on the tiger’s tail, as we struggle to find the line between trade and real security fears. Trade is winning.
When David Cameron was still prime minister, he launched a charm initiative with Beijing. President Xi Jinping was afforded an “ultra royal” welcome during a rare state visit in which he was extended lavish pageantry and a stay at Buckingham Palace.
The “kowtow approach”, as it became indelicately known, sought to reap the advantages of increased inward investment.
Now, Brexit has taken China off the wish-list and placed it squarely in the to-do section.
Foreign Office mandarins may insist the days of kowtow are over but International Trade Secretary Dr Liam Fox has made it clear that Britain wants to boost exports to 35 per cent of GDP after leaving the EU.
Consider that, by 2030, China will have more than 220 cities with more than one million inhabitants – the whole of Europe will have only 35.
It’s little wonder that Hunt and Fox are so keen to re-ignite the cause of a “golden era” of trade with China once more.
In August, China confirmed it was ready to “actively explore the possibility of discussing a top-notch free trade agreement” after Brexit.
It prompted Mr Hunt to declare: “China and Britain have very different systems but we do have a lot in common, and we in the UK think the rise of China and China’s economy and Chinese power can and must be a positive force in the world.”
And in November former defence secretary Dr Fox led a delegation to China’s first international imports fair in Shanghai, securing contracts for British businesses worth more than £100million.
It will take a lot, it seems, to discourage this British embrace.
Theresa May’s insistence that Chinese involvement in the Hinkley C nuclear plant be paused was, well, just a pause. China General Nuclear Power Corp’s £18billion investment is back on track. The US, Australia and New Zealand have publicly banned Chinese telecoms giant Huawei from getting its hands on their 5G infrastructure – that’s three members of the exclusive Five Eyes intelligence club to which Britain is fortunate enough to belong.
Yet, despite BT’s decision last week to remove Huawei from the core of its 5G plans, there has been no declaration by the Government.
And there have been warnings aplenty... A recent report by the US-China Economic and Security Review Commission warned that Beijing could force Huawei and other Chinese 5G equipment-makers to “modify products to perform below expectations or fail, facilitate state or corporate espionage, or otherwise compromise the confidentiality, integrity or availability” of networks that used them.
On Thursday the US asked Canada to detain Huawei CFO Sabrina Meng as part of a crimi- nal investigation. Also last week MI6 chief Sir Alex “C” Younger asked whether Britain was right to ignore the caution shown by our allies towards China.
While foreign secretary in 1848, Lord Palmerston told the Commons: “We have no eternal allies, we have no perpetual enemies. Our interests are eternal and perpetual, and those interests we have a duty to follow.”
This statement is often used to show that pragmatism will always dictate policy.
In 1949 Britain became the first country to officially recognise communist China, not because it approved of the regime but through fear over the fate of Hong Kong.
And now it has emerged that, following Theresa May’s visit to Beijing in January, Britain extended China an extraordinary licence to export an unlimited amount of radar and target acquisition technology – technology that could aid China’s PLA Air Force to keep a hold of illegally acquired islands and artificial atolls in the South China Sea.
CHINA’S newest aircraft carriers contain British components which, analysts say, make them every bit as mighty as US flat-tops. If US ships are sunk by China in a future war over Taiwan or the South China Sea, there is a real possibility British kit will have been used. What happens then?
Palmerston, the father of liberal interventionism, is being misinterpreted. True, like Hunt and Fox he wanted to open China to free trade but it was partly to export what he saw as good British values.
Britain is deluding itself if it thinks that China, even with its burgeoning middle class, will change its ways.
In October Beijing admitted it had opened “re-education camps”, where more than two million Uighurs – ethnic Turks – now languish.
When Britain protests, it is told to mind its own business.
Meanwhile, Beijing marches on – with human rights abuses, its illegal occupation of the South China Sea and its “Belt and Road” development strategy, which includes the wholesale buyout of economies in Africa, and investment loans on punishing terms in Europe and Asia.
So we must carefully reassess our red lines with China.
There comes a time where pragmatism and the need for short-term financial gains must give way to principle.
Failing to strike the right balance will cost us much more than pounds and pence.
SHAKE ON IT: Liam Fox with China’s vice premier Hu Chunhua in August