Johnson’s decision earlier this month to grant new visa rights to millions of Hong Kong people, in retaliation for China’s draconian anti-protest laws imposed on the territory, angered Beijing and prompted warnings of repercussions. Now up for grabs: £ 68bn of annual trade between the UK and China and billions more in Chinese domestic investment.
An expected government change of heart about the role of Chinese tech giant Huawei in supplying the UK’s 5G network, forced by U.S. sanctions on the company, will further anger Beijing, experts say.
“I think a pretty severe turbulence awaits us … what could be described as a perfect storm,” said Charles Parton, associate director of the RUSI expert group and a former diplomat with 22 years of experience working in China, Hong Kong and Taiwan, he predicted. that China would put the UK in the “diplomatic doghouse”, threatening to squeeze investment, UK exports, tourism and even the number of students coming to British universities. London should also prepare for an increase in cyber attacks, he said.
The question for Johnson: Can he maintain fruitful economic ties to the growing superpower while showing that the post-Brexit world the UK defends democratic values and will protect its own internal security from possible foreign threats?
His own deputies are watching closely.
“This is a crucial moment, a moment that is behind schedule, so we can recalibrate our position, our geostrategic position with China,” Tobias Ellwood, chairman of the defense committee of the House of Commons, told POLITICO, echoing the views of many on the back. Banks “We are heading for a Cold War, there is no doubt about it.”
Our way or the Huawei
In some respects, the government’s tone on China was beginning to change even before the Hong Kong decision and Huawei’s expected U-turn.
In January 2018, from a plane en route to Wuhan, May told reporters: “China is a country with which we want to make a trade deal.” Two and a half years later, the Department of International Trade declined to confirm in the record whether the United Kingdom was still seeking such an agreement.
However, the cooling of enthusiasm has as much to do with Donald Trump’s strategy in China as it does Johnson’s.
Determined to secure a swift post-Brexit trade deal with the United States, the UK has been pressured by Washington negotiators to withdraw from Beijing. United States Trade Representative Robert Lighthizer has repeatedly said that the new United States-Mexico-Canada Agreement will be a template for future United States trade agreements, and that includes a clause that empowers Washington to effectively review or reject any trade agreement that Mexico or Canada makes with a “non-market economy”, which would include China. Analysts expect US negotiators to want a similar provision in any deal with Britain.
Similarly, the UK government’s review of Huawei’s role in supplying Britain’s 5G network, authorities said, was motivated and focuses on the complicating factor of the US sanctions on the company, which point to its ability to use US-made semiconductors. Details of the UK decision are expected on Tuesday after a review by the government’s National Center for Cyber Security, and most hope that Huawei’s role in the network will be reduced. The symbolic force of the decision could be as great as its practical effect.
Rana Mitter, director of the China Center at Oxford University, agreed with Parton that a UK reversal of Huawei, which follows the Hong Kong citizens’ decision, would provoke a “very, very strong” reaction. of Beijing in terms of rhetoric. . Since the Hong Kong decision, the UK has been the target of the strong new diplomatic style emanating from the Chinese embassies known as “Wolf Warrior diplomacy” (named for the series of successful Chinese action movies). She deploys threats similar to Trump and makes greater use of Twitter to get the message across.
But Mitter questioned the extent to which Beijing would be truly willing to translate threats into action on the economic front.
“In the end, there are aspects of the business relationship between [the U.K. and China] that will be very difficult to replace, “Mitter said, citing the importance of the City of London and London’s legal services sector to China, as well as the addiction of the Chinese middle class to British universities.
“If we are talking about the big picture of [economic] relationships, which are closely related to services, I don’t see that going down the path of disconnection, as some of the rhetoric might suggest. “
Despite diplomatic revolts, the UK government has shown no appetite to follow more Hawkish MPs on the path to economic withdrawal from China. Foreign Secretary Dominic Raab has signaled, even in condemning Beijing over Hong Kong, to talk about trade ties, and the pattern is likely to continue, even as London prepares for any Chinese response in the coming weeks and months.
Veal with China
While the coming weeks and months could be stormy for relations between the United Kingdom and China, London has more room to “resist” than might be obvious.
China could try to weaponize its youth, Parton said, taking advantage of a UK higher education sector that was already destroyed by Brexit, paralyzed by the pandemic and heavily dependent on fees paid by foreign students. Beijing formed in this area, last month warning its students to reconsider their studies in Australia, in a move widely seen as retaliation for Canberra’s push for independent investigation into the origins of the coronavirus.
But Mitter said there was “much more rhetoric than reality” to the threats.
“There is still a strong emphasis on internationalization as part of China’s global ambition,” he said. “That means being able to operate comfortably in English-speaking environments, [so] I think the probability in practice that they would organize a boycott of the English-speaking higher education sector is very low. “
Similarly in trade, the UK can draw some comfort from China’s record in recent diplomatic disputes.
In disputes with smaller countries, Beijing has tended to target symbolic imports grabbing the headlines, before giving in quickly, Parton said. When Canada arrested Huawei executive Meng Wanzhou in 2018, China banned imports of pork and beef, only to lift the restriction a few months later.
In the case of the UK, British beef has only recently been allowed back to China more than 20 years after it was banned in the wake of the UK BSE outbreak and would be an easy target if Beijing wants to give an example. From london. “I think they might as well [reimpose the ban on British beef] but it won’t last long because they need the food, “Parton said.
Huawei’s decision in itself, however, would not be an easy one. Philip Jansen, CEO of BT, the UK’s leading mobile service provider, said on Monday that the company had been “on the telecommunications infrastructure for about 20 years” and that removing it in less than 10 years would be “impossible”.
“If we are in a situation where things have to go very fast, we are in a situation where the service for 24 million BT Group mobile customers is called into question: interruptions would be possible,” he told the show “Today” on BBC Radio 4. on Monday. China’s deep-seated role in other key parts of the UK’s infrastructure, such as nuclear power, cannot be reversed overnight either.
Some question the extent of the security threat posed by Beijing and ask whether the UK, which disagrees with China, along with the US, others fear that Huawei’s decision will usher in a “slow fall towards protectionism, “as Nick Macpherson, a former top UK Treasury official under Osborne and two previous foreign ministers, put it.
“This has little to do with national security and everything to do with the upcoming trade agreement between the United States and the United Kingdom,” he said.
Pacific alliance?
However, the growing Chinese-skeptic group in the Tory Party sees things very differently. Whatever Beijing throws at the United Kingdom, Johnson should be prepared to resist it, said Ellwood, chairman of the defense committee.
“As soon as you dare criticize China, there will be repercussions. Therefore, a breakthrough in foreign policy in China must come with the recognition that there will be an economic coup, “he said.
More broadly, conservative MPs like Ellwood and Foreign Affairs Committee Chairman Tom Tugend want to see a more united China policy across all government departments, including trade.
“China’s Achilles heel is that its growth absolutely depends on world trade,” said Ellwood. “But we are still allowing them to make decisions; We are allowing them to change the rules or bend the rules. “
Only the UK, despite its strength in some specialized areas, does not have the leverage necessary to convince China to liberalize its practices, experts said. But Whitehall is beginning to pay attention to a club of countries that could have more possibilities: those of the Integral and Progressive Agreement for the Transpacific Association, to which the United Kingdom is seeking membership.
As a successor to the U.S.-led Trans-Pacific Partnership (albeit without the U.S.), the alliance of 11 countries, including Japan, Canada, and Australia, is seen by some in Westminster as a means for the UK relates to China from a stronger position.
International Trade Secretary Liz Truss, although she did not name China, said earlier this month that the benefit of the CPTPP was not just economic. “I see it as a geostrategic benefit and also a sign of the kind of modern free trade area that the UK wants to be a part of,” he told the Policy Exchange expert group earlier this month.
Many conservative MPs hope this is a sign that a department that, since the Brexit vote, is more likely to issue a press release on selling tea to China than a coherent trade strategy towards China, is beginning to grow.
“I don’t think there is any harm in trade with China, but it must be on an equal footing,” Ellwood said. “We remain in a strong position, but only if we operate collectively, internationally, in unison.”
Parton, from the RUSI expert group, agreed. “We have to get much closer to like-minded countries and present a united front … not in a hostile way, but [in a way that says] These are the ways we like to do business and if you want to do business with us you will have to adapt to them. Standing together in this case, we would be much stronger. “
However, a comprehensive policy between the United Kingdom and China remains difficult, Parton added. This is something that he, along with Ellwood and his allies on the rear benches, believes will have to change rapidly as relations become more stormy.
“These things are connected,” said Parton. “The way it is negotiated in the commercial area is connected with the way it is negotiated [other areas]. The Chinese are very happy to use things from one area as a lever for another. So it’s best to look at it the same way: all interconnected. “
