Has Britain Sold Out to Beijing?

Pandering for Chinese trade and investment may cause trouble down the line, say experts.

PRINCES RISBOROUGH, ENGLAND - OCTOBER 22: China's President Xi Jinping and Britain's Prime Minister David Cameron drink a pint of beer during a visit to the The Plough pub on October 22, 2015 in Princes Risborough, England. The President of the People's Republic of China, Mr Xi Jinping and his wife, Madame Peng Liyuan, are paying a State Visit to the United Kingdom as guests of The Queen.  They will stay at Buckingham Palace and undertake engagements in London and Manchester. The last state visit paid by a Chinese President to the UK was Hu Jintao in 2005.  (Photo by Kirsty Wigglesworth - WPA Pool/Getty Images)
PRINCES RISBOROUGH, ENGLAND - OCTOBER 22: China's President Xi Jinping and Britain's Prime Minister David Cameron drink a pint of beer during a visit to the The Plough pub on October 22, 2015 in Princes Risborough, England. The President of the People's Republic of China, Mr Xi Jinping and his wife, Madame Peng Liyuan, are paying a State Visit to the United Kingdom as guests of The Queen. They will stay at Buckingham Palace and undertake engagements in London and Manchester. The last state visit paid by a Chinese President to the UK was Hu Jintao in 2005. (Photo by Kirsty Wigglesworth - WPA Pool/Getty Images)

On Oct. 22, Chinese president Xi Jinping joined British Prime Minister David Cameron for beer, fish, and chips before a gaggle of flashbulbs. It was part of Xi’s week-long state visit to Great Britain, his first since assuming leadership of China nearly three years ago. Britain’s government under Prime Minister David Cameron has signaled, increasingly loudly in recent months, that it hopes to usher in a “golden age” of British-Chinese relations, one which will see China become Britain’s second-largest trading partner — and one in which overt criticism of China’s politics or of its human rights record will be muted. In anticipation of Xi’s arrival, George Osborne, Chancellor of the Exchequer, called for Britain to become “China’s best partner in the West,” a sentiment Xi lauded as “visionary and strategic.” In this ChinaFile conversation, experts discuss whether or not Britain may be placing undue emphasis on gaining Chinese favor in trade, and what Osborne’s posture may mean for China’s relations in Europe and the United States.

Isabel Hilton, London-based international journalist and broadcaster:

The timing could not have been worse: as Xi’s plane touched down in London on Monday evening for a much trumpeted four day state visit to Britain, the country’s steel industry went into convulsive collapse, with the loss of some 5,000 jobs.

Among the contributory factors is the dumping of China’s surplus steel on global markets that is causing pain in steel industries around the world.

The $46 billion in Chinese investment that Cameron and Osborne hope to confirm during the visit, is predicted to create fewer than 4,000 U.K. jobs. Nailing the United Kingdom’s colors to the Chinese mast began to seem more of a mixed blessing than either side’s spin doctors have acknowledged.

The United Kingdom’s rush to be China’s best friend has happened with a speed and, some would say, a recklessness that has taken many by surprise. Veteran British China watchers, more used to complaining that senior British politicians could barely name more than three Chinese cities and pronounced none of them correctly, are bemused by the breathless enthusiasm of a policy made, not in Downing Street or in the United Kingdom’s Foreign Office, but across the street in the Treasury.

The Treasury, the most insular and ideological branch of the U.K. government, rarely ventures abroad, but there is a curious resonance between the pledges of the general secretary of a communist party that offers prosperity to its people provided they refrain from political participation, and a U.K. finance minister who reduces a multidimensional foreign and security policy to a financial bottom line.

It could hardly have been clearer on Osborne’s recent trip to China: he visited China’s heavily securitized Muslim region of Xinjiang and talked only of opportunities in construction; he gave a speech on the volatile Shanghai stock exchange in which he pledged that the United Kingdom would be China’s new best friend in the West and that the two countries should “stick together.”

There are reasons why major shifts in foreign policy are not customarily expressed in the language of the kindergarten playground. Did Osborne mean “stick together” in all circumstances? Does the United Kingdom sticking to China mean un-sticking itself from older — and more rounded — alliances, such as that with the United States or the United Kingdom’s European partners? To put it bluntly, if China invaded Taiwan, would the United Kingdom stick with China?

It is not just startled Britons who would welcome clarification. Britain’s traditional allies, too, have raised eyebrows over Osborne’s enthusiastic embrace of a Chinese plan to design, build, and operate a nuclear plant in southeast England, inserting a Chinese state-owned enterprise into the United Kingdom’s critical infrastructure, with the almost unlimited potential that implies for long-term leverage over the United Kingdom’s future political and diplomatic choices.

Cameron has been obliged to promise to raise the question of steel dumping with Xi. But the Chinese ambassador to the United Kingdom, Liu Xiaoming, who has never troubled to conceal his view of his host country, hinted at the likely response: it was Britain’s fault, he said. “If you continue to stay with your old traditional business, you’re losing money and opportunities,” he told ITV News. “China is making adjustments. Why not Britain?”

Jonathan Fenby, former editor of the South China Morning Post and current China Director of the research service Trusted Sources:

For the U. K. government, which is seeking to reduce its national deficit while wanting to spend heavily on infrastructure, a partner which declares itself ready to pump in money while proclaiming the start of a beautiful friendship has obvious allure. Xi’s visit to the United Kingdom this week is being garlanded with talk of a “golden era” of relations between the two countries and the Chinese leader can be sure nothing will be allowed to disturb his welcome as the Conservative government puts the highest priority on showing that Britain is China’s best friend.

Osborne, the hard-headed Chancellor of the Exchequer, has formulated this policy, with Prime Minister David Cameron signing up to it. Osborne, who has taken over direction of China policy from the Foreign Office, makes no bones about where he is heading — to boost economic ties both in Chinese investment in the United Kingdom and British exports to the mainland regardless of any other considerations. The impact on relations with Washington, human rights considerations, different value systems, Beijing’s policy in Hong Kong, and other such matters, cannot be allowed to raise their heads. Striking a deal with Xi and his large business retinue is all that counts, and the Chancellor admits to no problems in seeking to replace Germany as Beijing’s principal European partner.

One may question how this will prove in practice. There are likely to be significant issues in the implementation of grand plans for China to fund the revitalization of depressed northwestern England, build a high speed train line, and act as sponsor of Britain’s nuclear power industry — with the prospect of using its own, as yet unproven, technology. But there is a more fundamental question that involves how Britain and its government see themselves.

In going for its China play, is the government making the country hostage to a regime which may decide at any point that its interests do not coincide with those of London? Supporters of the Osborne approach argue that he is merely recognizing the new global reality of China’s rise. They do not ask what Beijing expects to get out of it. Xi may come to London bearing gifts, but, as he shapes China’s new foreign policy, he will want a quid pro quo in terms of political support.

Already, the impact can be seen in how Cameron shied away from anything that might have caused the slightest offence during his visit to China this year. The opprobrium he got after an earlier meeting with the Dalai Lama was sufficient warning (even though British exports to China did not suffer). As long as the Osborne doctrine prevails, Britain will keep its mouth shut on controversies involving China, which are growing steadily in number. On a strictly financial basis, the government may think that is a price worth paying; from a broader national and geo-political viewpoint, it all too easily confirms Napoleon’s view of the British as a nation of shopkeepers.

Robert Barnett, director of the Modern Tibet Studies Program at the Columbia University Weatherhead East Asian Institute:

The British government has taken what it sees as a Chinese approach to foreign policy as an act of friendship: no interference in others’ affairs, no public imposition of one’s cultural norms by claiming they are universal, and minimal if any intrusion of values in decision-making.

Except that China doesn’t follow those principles. It doesn’t see foreign policy just as a way of extending market reach and buffering trade figures. It energetically pursues objectives concerning certain offshore islands, it dictates demands about apologies by a neighbor concerning their history, it calls for the repatriation of fugitive officials where there are no extradition treaties, it has a military response in place should Taiwan move towards independence, it blocks U.N. censure votes concerning allies, it insists that its leaders not see any protests when abroad, and it forbids any foreign leader to meet with a certain elderly Tibetan monk. It has also just pledged $40 billion to develop its neighbors’ infrastructure for reasons that are as much to do with strategy as profit. Even on human rights it is proactive in certain instances: it releases an official annual tally of human rights abuses by the United States and is vocal on issues involving racism and apartheid.

All of these are, of course, interest-driven and, as such, they do not differ markedly from those of other countries: China uses its market advantages to secure its interests and to promote its values and objectives. Its decisions are not driven by financial aspirations above all else.

So the British example of profit-driven, value-muted foreign policy is what China would not do, and especially not if another country was pressuring it publicly to do so.

Downing Street’s response is that its values remain unchanged, if mute, and will be delivered via some other mechanism. This appears to mean that an increase in trade and public compliance on value questions will lead to enhanced friendship, which in turn will produce greater influence and a willingness to listen from Beijing. But China’s friends do not appear to be chosen according to their trade figures or their fiscal contributions; otherwise relations with Japan and the United States would be very cozy, and neither Pakistan nor North Korea would be allies. Neither is it obvious that China’s allies can get decision-makers in Beijing to do anything they don’t wish to do. David Milliband tried this infamously in 2008 when he in effect renounced Britain’s outstanding treaty or similar obligations to Tibet (which was far more than he had been asked to do by Beijing), explicitly in return for the Chinese reopening talks on autonomy with the Dalai Lama. Nothing in Beijing changed. In fact, their position towards Whitehall became harsher on this issue.

But that is the smaller part of the weakness in the logic of the Osborne argument. Foreign relations depend on leverage of different sorts, and without that leverage, there is no way to further interests other than by brute force. But the new British position radically reduces its leverage with China’s leaders, while increasing theirs: that’s the nature of a transaction which sells pig semen, royal banquets, and a promise of public silence in return for nuclear reactors and no change on any issue. And values aren’t like tradeable goods: if the other player is more powerful than you, you can’t remove one from the marketplace and then reintroduce it later other than at enormous cost. Dropping a value loudly is a one-way street, and it’s very hard to turn back. It also will damage relations with any of your neighbors who still hold those values. As the Tibetan saying goes, “A distant friend is of little value compared to a hostile neighbor,” something they learned the hard way.

If your political and commercial output is declining, values and social capital are exactly what you should be trading as a key part of your assets, because they are going to become the only exclusive product that you have to offer. This debate is therefore not about whether Britain should or should not maximize its trade with China. That’s a red herring with five stars. It is about whether boosting foreign trade requires more rather than less consideration of non-economic issues.

Getty Images News

Jonathan Fenby is former editor of the South China Morning Post, the Observer, and Reuters World Service, and currently China Director of the research service Trusted Sources.

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