When David Cameron rolled out the red carpet to Chinese President Xi in 2015 there was widespread optimism about the future of Sino-British cooperation. Trade between the two nations reached £58bn and Chinese state-owned firms had signed onto a deal to build the Hinkley Point nuclear power station. Six years later, relations have rapidly deteriorated. Is it constructive to view Sino-British through the Cold War lens – a zero sum game?
Unlike in the 1980s, when trade between the Soviet Union and West was non-existent, Britain’s economy today is deeply intertwined with China’s. The Asian superpower is now the UK’s third largest trading partner, with Chinese firms constituting a quarter of all electric machinery imports last year. China’s comparatively low labour, energy and raw material costs makes it an economically advantageous location for British manufacturers to base production.
A 2015 report commissioned for the Department for Business, Innovation and skills cites the increased competition since China acceded to the WTO in 2001 as a key driving force of lower consumer prices in clothing and footwear. This is reflected in a 47% decline in the clothing retail price index between January 1997 and 2020. Household appliances like washing machines and televisions are now more affordable than ever before thanks to the offshoring of production to Chinese cities like Guangzhou and Shenzhen, drastically improving the standard of living for Britain’s lowest-paid and providing them with far greater disposable income.
Deepening economic ties with China has also brought a raft of jobs to the service sector. A 2020 report by Cambridge Economics estimates that UK ties with China are responsible for 129,000 full-time equivalent jobs, including up to 16,900 positions in London. In the education sector, the value of British net exports to China are estimated at £3.7bn. The 200,000 Chinese students studying on our shores are vital to the revenue streams of the higher education sector, paying fees two to three times as high as their British peers.
Despite the deep economic benefits from Sino-British engagement, the Cold War mentality adopted by the then-President Trump and now President Biden appears to have shifted British foreign policy. The government banned Huawei from involvement in Britain’s 5G infrastructure after heavy lobbying by former US Secretary of State Mike Pompeo, despite the security services’ assertion that risk could be mitigated. After backbench Conservative MPs tried to amend a trade bill last March, citing human rights concerns, the then-Foreign Secretary Dominic Raab announced ‘there are no realistic prospects’ of a Sino-British trade agreement on the horizon. Freedom of navigation operations conducted by the Royal Navy in the South China Sea, and the AUKUS pact to help Australia develop stealthy nuclear submarines, send a clear signal that the UK will be following America’s tough line on China moving forward.
Taking a confrontational approach on China is not just against Britain’s economic self-interest, it is also contrary to its immediate security concerns. The British Army does not maintain an extensive array of military bases in the Asia-Pacific, unlike its friend on the other side of the Atlantic. The last thing the UK needs is a confrontation in the South China Sea threatening to choke off nearly 12% worth of GDP in trade. This year’s integrated defence review stressed the need to shift resources from conventional warfare to the cyber and high-tech; thickening military commitments in Asia will merely frustrate this pivot. The review asserted that Russia, not China, remains Britain’s most acute military threat. Thus it is questionable whether Britain should expend its increasingly anaemic military capabilities on reinforcing US hegemony in China’s backyard, despite the region posing little to no hard security threat to the British Isles.
Prime Minister Johnson argued this March that a ‘balance’ can be struck when dealing with China, pursuing Britain’s economic self-interest whilst also advancing liberal internationalist values. Unfortunately, as Britain’s acrimonious break with the EU has demonstrated, one cannot have their cake and eat it in international affairs. Recognising this, the government should strive to deepen the UK’s long-standing mutually beneficial relationship with China and leave playing great power politics to its friends in Washington.
Mattew is currently undertaking work experience at Bright Blue. Views expressed in this article are those of the author, not necessarily those of Bright Blue. [Image: Magda Ehlers]
