Tuesday, 2 March 2021

How Britain should respond to Chinese threats

The recent spat between the People’s Republic of China (PRC) and the United Kingdom (UK) over the Foreign Secretary’s support for the protesters in Hong Kong has triggered a familiar discussion among British foreign policy elites. The question of how Britain manages its relationship with the PRC is once again in the spotlight. How can the UK deter PRC actions it considers antithetical to its own interests? What can be done about Hong Kong? More broadly, what can the UK do about the PRC’s attempt to take over the South China Sea? And what can be done about the PRC’s treatment of its Uighur Muslim minority inside Xinjiang?

These questions have begun to move to centre stage of the bilateral relationship as Beijing begins to exert more and more power on British elites, through ‘elite-capture’, through the UK media, and through Whitehall in-fighting. Naturally, asymmetry in the relationship has been crucial to this dynamic, particularly in the field of Chinese investment flows to Britain. However, British elites themselves allowed this narrative to take hold, which favours the PRC as the enabler of investment. Indeed, it is a relationship dynamic that has its origins in the PRC’s tributary system, where asymmetry in power, formal hierarchy and process were all carefully defined.

Arguably, the UK-PRC relationship has changed dramatically over the past three years. While it is true that, Britain’s foreign policy elites have taken somewhat bold positions with over this period, the country has suffered from a lack of long-term strategic foresight or how to control or de-escalate the resulting crisis in relations. To date, the UK has: ordered security checks over PRC involvement in its nuclear power plant infrastructure (2016); deployed Royal Navy vessels to the South China Sea to take part in freedom of navigation manoeuvres (2018); carried out supply chain investigations on Chinese firms seeking involvement in British 5G infrastructure (2018-2019); and pressed the PRC on human rights over the Uighurs and Hong Kong (2019).

Every time, PRC officials have been willing to counter-escalate the issue, threatening both the bilateral relationship and future prospects for investment into Britain. For example, at the height of the Hinkley Point debate, Liu Xiaoming, the PRC’s Ambassador to the UK, warned that the bilateral relationship itself was ‘at risk’. Hours after HMS Albion’s transit to uphold international law in the South China Sea, the China Daily – a PRC state newspaper – wrote: ‘China and the UK had agreed to actively explore the possibility of discussing a free trade agreement after Brexit, but any act that harms China’s core interests will only put a spanner in the works.’

The day after Gavin Williamson, the former Defence Secretary, gave a speech at the Royal United Services Institute announcing his intention to deploy HMS Queen Elizabeth on a tour, which would ‘include the Mediterranean, the Middle East and the Pacific region’, George Osborne, the former Chancellor of the Exchequer, stepped in to criticisein The Financial Times – both the speech and the government’s approach to the PRC. Characterising Mr Williamson’s remarks as ‘gunboat diplomacy’,  Mr Osborne’s comments were widely repeated in Chinese state media. Then in a coup-de-grace, aides close to Philip Hammond, the current Chancellor, leaked how Chinese trade officials had apparently cancelled high-level trade meeting in the wake of the speech. It was almost a surprise that Mr Williamson lasted as long as he did.

The crisis over Huawei also saw the PRC’s Ambassador threaten the UK in a BBC Newsnight interview, stating that any change in the British government’s perspective would send a ‘bad signal, not only on trade but on investment.’

As a result of the PRC’s strong-arm tactics and attempts to control strategic narratives, the British government has swung from one crisis into another with little chance of gaining the upper hand, primarily because it has enshrined one rule above all others: do not let trade and investment with the PRC be affected. But how did this rule become Britain’s paramount driver in the relationship? Intriguingly, Beijing also played a role in promoting the relationship as one based on Britain’s ‘need’ for investment.

As a result of the PRC’s strong-arm tactics and attempts to control strategic narratives, the British government has swung from one crisis into another with little chance of gaining the upper hand.

Mr Osborne played an outsized role in allowing this narrative to become established while he was Chancellor. In September 2015, before the state visit of Xi Jinping, the leader of the PRC, to Britain, Mr Osborne visited China on a charm-tour. Promising to make Britain ‘China’s best partner in the West’, the former Chancellor linked the relationship directly to investment:

There is no country in the west that is as open to Chinese investment as the United Kingdom. We welcome Chinese investment. There is huge amounts of Chinese investment coming into Britain at the moment. Indeed, we are attracting more investment than Germany, France and Italy put together.

One day before Mr Xi’s October 2015 visit to the UK, the PRC Ambassador moved to establish the new parameters for the UK-PRC relationship: ‘the UK needs Chinese investment’. He went on: ‘The UK has stated that it will be the Western country that is most open to China. This is a visionary and strategic choice that meets Britain’s own long-term interest.’ Mr Xi himself followed this by pushing the point: not only did Britain need investment, it needed to continue to meet Beijing’s criteria for getting that investment.

So, whereas prior to Mr Osborne’s tenure, the UK had a broader, multi-layered approach to the PRC, with levers of its own, now it has only one priority: trade and investment – and at all costs. When it comes to the rules based international system, when it comes to proper security checks over critical national infrastructure, when it comes to values and principles, trade and investment are king. And having inserted this vulnerability into Britain’s foreign policy-making structures (with little push-back), Beijing has been quick to beat the drum each time there is a crisis.

Terms like ‘win-win’ and ‘Golden Era’ have become clichés, trotted out during ceremonial meetings and used during crises in the relationship to threaten Britain back into compliance with Chinese policy preferences.

So, the question once again arises: what can the UK do? How can London regain leverage in a relationship that has become solely defined by Chinese perceptions and by Beijing’s willingness to restrict or reward behaviour with investment? There are four possible vectors:

  1. There must be a whole-of-government ‘China Policy’, stopping the fragmentation and exploitation of different bureaucratic approaches. The PRC’s ability to use the Treasury against the Ministry of Defence in the UK press after Gavin Williamson’s speech at the Royal United Services Institute was a perfect example of this, and frankly an own-goal. It would not have been possible if the Ministry of Defence and the Treasury had coordinated policy and had the speech not been politicised. 
  2. The UK must understand its own leverage in the bilateral relationship. The current win-win relationship is framed so that investment is seen as a reward from the PRC. Chinese interlocutors have pushed to frame the Shanghai Stock Exchange and the London Stock Exchange swap agreement as a favour to Britain when it is clear that the reality is that it is a favour to China. What leverage does that give London over Beijing? What of Beijing’s desperation to internationalise the Renminbi in London? Much the same can and should be said about Chinese investment into the UK’s critical advanced technologies.
  3. Britain must be willing to control escalation in a crisis over carefully-defined ‘core interests’. If for example, Beijing threatens trade on a matter relating to national security – as with Hinkley Point – the UK should summon the PRC Ambassador for a dressing down to make British displeasure known. It should be made clear that foreign ambassadors will not be tolerated if they interfere in British domestic debates around national security.
  4. The UK must be ready to play its strong cards whenever necessary. If it wishes to admonish the PRC over the Uighur concentration camps or crack downs in Hong Kong, it must sanction the relevant individuals, freeze their British-based assets, and deprive their children the opportunity to go to UK universities. Nothing is more important to Chinese elites than hiding their money in safe foreign investments or educating their children overseas. The UK can use that leverage by applying the Global Magnitsky Act to key individuals involved in China’s most egregious human rights abuses.

It is clear that the PRC’s efforts at ‘elite-capture’ in the UK have had some success, with key British political leaders becoming increasingly outspoken on Beijing’s behalf. Over the course of the previous government, a number of key figures failed to push back as Beijing redefined the bilateral relationship on terms that favour both Chinese foreign policy goals and objectives and its ability to reward or to punish. In essence, London is defined as needing investment, placing it into the position of a supplicant. By this rule, nearly all trade and investment activity – whether in Britain’s interests, the PRC’s interests, or both – has become hostage to good behaviour by UK elites. In the process, terms like ‘win-win’ and ‘Golden Era’ have become clichés, trotted out during ceremonial meetings and used during crises in the relationship to threaten Britain back into compliance with Chinese policy preferences. 

Frankly, it is beginning to look like the type of relationship that Beijing honed over 2,000 years on its near abroad with its tributary states. This world order was, according to J. K. Fairbank, ‘a set of ideas and practices developed and perpetuated by the rulers of China over many centuries.’ As Zhang Yogjin and Barry Buzan have written, the system provided ‘an indispensable social milieu within which Imperial China tried to socialise others, through assertion, coercion, coaxing, into accepting basic institutional practices favoured by Imperial China in managing its relations with others, and more importantly, the meta-values underwriting and sustaining those institutional practices.’ 

The UK must remember that accepting these practices is at odds with its own political culture, honed over many centuries – as well as its global standing as a global power. Britain must begin to redefine the bilateral relationship with the PRC and move away from the ‘Golden Era’ and find balance in the relationship.

This essay is the second part of a two-part series by Dr John Hemmings, looking at British policy towards the PRC. The first part, published on Monday, 16th July 2019, looked at the problems with existing British understandings of the PRC.

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