Britain: ‘China’s Best Partner in the West’?

The timing could not have been worse: as President Xi Jinping’s plane touched down in London on Monday evening for a much trumpeted four day state visit to the U.K., the U.K.’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 £30 billion ($46.4 billion) in Chinese investment that the U.K. prime minister, David Cameron and his finance minister, George Osborne, hope to confirm during the visit, is predicted to create fewer than 4,000 U.K. jobs. Nailing the U.K.’s colors to the Chinese mast began to seem more of a mixed blessing than either side’s spin doctors have acknowledged.

The U.K.’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 the U.K.’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 George 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 U.K. 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 Mr. Osborne mean “stick together” in all circumstances? Does the U.K. sticking to China mean un-sticking itself from older—and more rounded—alliances, such as that with the U.S. or the U.K.’s European partners? To put it bluntly, if China invaded Taiwan, would the U.K. stick with China?

It is not just startled Britons who would welcome clarification. Britain’s traditional allies, too, have raised eyebrows over, for instance, Mr. 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 U.K.’s critical infrastructure, with the almost unlimited potential that implies for long-term leverage over the UK’s future political and diplomatic choices.

Mr. Cameron has been obliged to promise to raise the question of steel dumping with President Xi. But the Chinese ambassador to the U.K., 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?”

As opposed to its critics, I view the China agenda pursued by David Cameron and George Osborne as a bold strategic positioning for the U.K. to derive maximum benefits from China’s global financial and economic expansion. A special relationship with China may also serve as a smart hedge against a likely deepening institutional and political crisis of the European Union. If the E.U. sinks and/or the U.K. leaves it, the British government will be in dire need to provide alternative economic and diplomatic gateways. Therefore, the current China gamble represents an effort at proactive risk-taking that may provide valuable economic and diplomatic options if things go wrong with the European Union.

For a government 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. So Xi Jinping’s visit to the U.K. 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.

The policy has been formulated by George Osborne, the hard-headed Chancellor of the Exchequer (Finance Minister), 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 UK 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 north-western 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 the People’s Republic 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 nation of shopkeepers.

For Chinese President Xi Jinping’s first state visit to the United Kingdom, London is rolling out the red carpet—literally. The Duke of Edinburgh, Prime Minister David Cameron, and Queen Elizabeth II welcomed Xi and honored him with a 41-gun salute and a banquet at Buckingham Palace. Xi is reveling in this reception, saying his visit will lift Sino-British relations to “new heights.” And he has brought gifts: during the four-day-visit, which ends Oct. 23, he is expected to sign deals with Cameron worth more than $46 billion.

But at what cost to the United Kingdom’s reputation and integrity?

During a September trip to China in preparation for Xi’s visit, for example, Chancellor George Osborne sounded less like the leader of his country’s financial system and more like a student of Chinese Communist Party propaganda. “We want a golden relationship with China that will help foster a golden decade for this country,” he wrote in an op-ed in the Guardian (sharing a byline with Britain’s commercial secretary to the Treasury, Jim O’Neill). “As China’s global influence grows, so too must our relationship,” they wrote—ignoring both China’s pervasive corruption, and the widespread concern in the business community of China’s protectionism and faulty legal system.

While visiting the restive northwest Chinese region of Xinjiang during that trip, Osborne parroted Beijing in saying that “economic development and rising prosperity and higher living standards” are the answer to the region’s problems—not a fundamental overhaul of the repressive, discriminatory, and anti-Muslim policies that have caused the region to be an epicenter of unrest and terrorism in China. Osborne’s message was that human rights issues should be raised only behind closed doors; other approaches are unconstructive “megaphone diplomacy.” Beijing must have been thrilled. Indeed, a Chinese party newspaper, the Global Times, praised Osborne for not “confronting China by raising the human rights issue.”

Sadly, Osborne’s behavior is only the latest in a long line of British human rights capitulations.

Sadly, Osborne’s behavior is only the latest in a long line of British human rights capitulations. Under Prime Minister Gordon Brown in 2008, the United Kingdom succumbed to Chinese pressure and recognized Beijing’s sovereignty over Tibet. More recently, London failed to stand up for full democracy in Hong Kong, the Chinese territory that was a British colony until 1997. Following huge pro-democracy street protests in late 2014, London described Beijing’s insistence that it control the candidates who could run for Hong Kong’s top office as allowing space “for a meaningful step forward for democracy.” In March, the United Kingdom became the first Western nation to support the establishment of China’s Asian Infrastructure Investment Bank, despite the bank’s lack of standards protecting against development-related abuses. (London says it will work to see such standards adopted.) And although London ultimately reversed its denial of a long-term visa to artist and government critic Ai Weiwei this August, that British officials ever dignified Beijing’s efforts to persecute him is astonishing.

—Richardson’s views are excerpted from an op-ed first published by Foreign Policy.

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 U.S. 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, out of gratitude, 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 increasingly 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.