Ramping up criticism of Beijing not only risks deterring future Chinese investment but could undermine British businesses in China
British history books claim that before the First Opium War against Manchu China in 1839, the Chinese hoped there would be a lot of “talkee-talkee before fightee-fightee”. This time around, it is the British who seek discussions and negotiations before the war of words over China’s alleged human rights abuses spills over into action.
The United States also drew back when similar arguments erupted with China. One reason was that China held $3,399.9 billion of the American Treasury’s foreign exchange reserves. Another factor was the calculation that the American cost of living would shoot up without access to cheap Chinese footwear, clothing, electricals and household goods.
No wonder British Prime Minister Boris Johnson’s Integrated Review of Security, Defence, Development and Foreign Policy skirted around the subject of China. The 100-page review even hinted that Russia was Britain’s most serious threat and the reason for acquiring high-tech drones and the expensive paraphernalia of cyber warfare and satellites to control space while increasing the stockpile of nuclear warheads by 40 per cent.
No wonder Britain’s response was limited to grieving rhetoric when Beijing imposed sanctions on five ruling Conservative Party MPs, two peers, a barrister and an academic. They can no longer travel to China, and any assets they there will be frozen. “Willing to wound, and yet afraid to strike/ Just hint a fault, and hesitate dislike”, as in Alexander Pope’s poem, Mr Johnson “noted that China has chosen to sanction individuals and entities that are seeking to shine a light on human rights violations”.
Apart from the Uighur Muslims in Xinjiang, the British PM must have two other controversies in mind. One is Hong Kong, where the citizens’ protests have been continuing unrelentlessly despite Beijing’s crackdown and the enforcement of its harsh new security law, the other the Chinese telecommunications giant Huawei, which Britain excluded from its 5G networks last year as a result of American pressure backed by Britain’s defence establishment. Huawei of course denies any spying activities. While China’s response to the exclusion was muted, it denounced a new programme for fast-track British citizenship for certain residents of Hong Kong as “brutal meddling” in its domestic affairs.
Hong Kong is a former British colony which was returned to China in 1997 under a “one country, two systems” agreement whereby its capitalist system and laws would continue until 2047. But the UK accuses China of whittling away at this agreement -- known as the Joint Declaration -- especially through the new law giving China sweeping controls over the people of Hong Kong which came into effect on June 30, 2020.
What all this means is that once again Britain finds itself on the horns of a dilemma. It can take the high moral ground over Xinjiang, HongKong and Huawei. Or it can take a pragmatic view of the benefits of an increasingly close partnership with the world’s second largest economy. “We will invest in enhanced China-facing capabilities, through which we will develop a better understanding of China and its people, while improving our ability to respond to the systemic challenge that it poses,” the review says.
A showdown seemed imminent when British foreign secretary Dominic Raab told the House of Commons that British businesses should not profit from what he called the “industrial scale” forced labour of Uighurs. However, Mr Raab tactfully refrained from mentioning sanctions on Chinese Communist Party officials allegedly involved in human rights abuses. The omission confused listeners because the government had earlier indicated sanctions under a law modelled on the US Global Magnitsky Act.
Mr Raab’s explanation that the possibility of sanctions was being kept “in reserve” did not satisfy Sir Iain Duncan Smith, a former Conservative Party leader who supports sanctions. He asked in Parliament who in the government might be blocking Mr Raab from following through with the planned measures.
Whoever was responsible, the reversal exposed the inconsistency of official British thinking about China. The UK government’s last white paper on China was published in 2009, before the CCP became aggressively authoritarian after Xi Jinping assumed power in 2012. The softer tone of Mr Raab’s speech also reflected Mr Johnson’s desire to keep his options open as the UK assumes the G-7’s annually rotating presidency and prepares to host the next climate change conference in Glasgow later this year, reaches out to the Indo-Pacific destiny that the review eulogises, and seeks economic and strategic alternatives to EU membership.
He cannot be anxious to provoke a China that has recently imposed punishing tariffs on Australian imports of everything from wine to timber and coal, in retaliation for Canberra’s calls for an investigation into the origins of Covid-19. Chinese investments in Britain, assessed at £8.63 billion, represent a 12.5 per cent year on year increase. Chinese investment in London real estate rose from £2.69 billion in 2016 to £3.69 billion in 2017. Bilateral trade totalled £80 billion (roughly $110 billion) in 2019.
Chinese companies play a vital role in British infrastructure. The state-owned China General Nuclear Power Group holds a one-third stake in the Hinkley Point C nuclear power station, a £20-billion project being built in southwestern England. Last year, Chinese steelmaker Jingye Group paid about £50 million to acquire British Steel. Other Chinese firms have large stakes in British offshore oil fields, as well as transport networks and utilities.
Ramping up criticism of Beijing not only risks deterring future Chinese investment but could undermine British businesses in China. Hence the review’s diplomatic claim:“We will pursue deeper engagement in the Indo-Pacific in support of shared prosperity and regional stability, with stronger diplomatic and trading ties … This approach recognises the importance of powers in the region such as China, India and Japan and also extends to others including South Korea, Vietnam, Indonesia, Malaysia, Thailand, Singapore and the Philippines.”
With their acute sense of history, the Chinese know that they have little to fear. European writers and politicians have spoken down the centuries of “La Perfide Albion”, or Perfidious Albion.