In the Far East, trouble is stirring. You may have heard rumblings of military exercises and potential military conflict between China and Taiwan, due to the visit of American Speaker of the House Nancy Pelosi. These events mean that tensions between China and the West are now more heightened than they have been in many years. Now is therefore a good time to reflect on the future of Britain’s relationship with China, the outlook of which remains hostile.
Britain has been held hostage to our own decisions over the past decade. We are at a crossroad, or more accurately, stuck between a rock and a hard place. We have difficult decisions to make before us: Condemn China and suffer massive economic consequences, and even then our lack of military strength will mean very little will actually be achieved, or partner with China and continue to reap the economic benefits, but be entrapped within China’s trade and economic influence.
These are extremely difficult decisions, which the Prime Minister will have to make.
An Uneasy History
To say China and Britain have had an uneasy history would be to vastly understate things. Many in China still blame Britain and the Opium Wars for their 100 years of foreign influence, colloquially known as the ‘One Hundred of Shame’, while, in Britain, many still lament the loss of Hong Kong and the hostilities between the two countries during the Korean war.
However, after the return of Hong Kong and the further economic liberalisation of China, relations warmed for nearly a decade. China became an attractive foreign investor as well as a reliable trade partner under Blair. Brown and Cameron continued a productive relationship with China with most of our privatisation efforts in the transportation, energy and logistics sectors being sold to companies connected with Beijing. China owns vast areas of land in England, oil in the North Sea, and wind and solar farms in Wales.
No country in Europe was as eager to sell assets to the Chinese as the British, even going so far as to setting up a British investment fund, to promote and manage investments made by Chinese companies, run by our former Prime Minister, David Cameron.
Theresa May’s government seemed not very concerned about this development. In a post-Brexit world, it was initially thought that investment and trade with China could easily replace what was lost from the EU. This sentiment was also mirrored by opposition parties in Britain. The Scottish Nationalists (SNP) were eager to receive money away from Westminster and establish Scotland as a destination for foreign investment independent of the UK, and Labour was also happy to see more foreign investment.
It is not difficult to see how Chinese diplomacy was able to charm everyone in the British political sphere. To the Tories, China presented itself as a fellow shrewd businessman concerned about capitalistic gains via investment, and, to Labour, China presented itself as a country concerned with the needs of working-class people.
Recent Changes
This relationship, however, took a dramatic downturn with the ascension of Boris to the leadership of the Conservative Party. Thereafter, Huawei and other Chinese companies began to be sanctioned in the UK over security concerns, and more and more focus shifted towards China’s activities in the South China Sea and its human rights records in Tibet and Xingjian.
2019 thus marked a significant and dramatic turning point in China-UK relations, a period marked by mutual accusations and hostility. This hostility reached an all-time high in late 2021 when the British Navy deployed the newly commissioned Queen Elizabeth Carrier and her strike group to undertake military exercises in the South China sea in contested waters and traversed the Taiwan strait.
Given the election of Liz Truss as the new Prime Minister, I can comfortably predict that Sino-Anglo relations will not be improving anytime soon. Liz Truss has had a history of being a hawk on China during her time as Foreign Secretary, with her at one point almost summoning the Chinese ambassador weekly.
The Current Situation
However, standing up to China is a difficult task, perhaps now more than ever. Boris’s “Global Britain” has put phrases such as “East of Suez” and “return to Asia” back into the British Armed Forces Dictionary, phrases not seen since the days of Harold Wilson and Margret Thatcher. With new British bases in Singapore, Bahrain and Oman, it has become the aim of the Ministry of Defence to project power globally once more. However, we must remember the current state of our military. Every single defence review since the Cold War, including the latest one set out by Boris in March of 2021, has cut the capabilities of our armed forces significantly.
This downward trend is unlikely to change anytime soon with the Cost of Living Crisis and other priorities on the domestic agenda. No significant military spending hike is viable politically and economically, despite assurances to the contrary by Liz Truss.
The Chinese military, which, despite having a GDP percentage as defence spending that is lower than that of the UK, commissioned the equivalent tonnage of 1.2 Royal Navy’s (entire surface fleet) worth of new ships in 2020, a pandemic year. Britain, even with the new strategy of global force projection, cannot hope to compete with China’s military in the region, much less challenge its regional hegemony.
Economically speaking, the relationship between the two countries also remains complicated. China is the UK’s 3rd largest trading partner and has significant interest in expanding that relationship. Britain’s current economic crisis, coupled with high interest rates and a trade imbalance, due to Brexit, makes foreign trade extremely valuable to the British economy.
If China wishes to, it could inflict significant damage to the British economy. The British trade balance with China continues to fall rapidly into a deficit in the past decade, and we are more reliant on trade with China than perhaps ever before. If we were to take a hard stance on issues such as Tibet, Taiwan, or the South China Sea, China has the capability to retaliate, which could cause devastating effects on our economy.
There are sectors in which we are completely unprepared for a trade war with China and completely reliant on Chinese technology. Nearly 10% of all telecommunication equipment in Britain originates from China, and that is not counting the consumer side of this as well, with most Apple and Android phones manufactured in China. On the other hand, China is quite well insulated from British trade, with most of our top exports being minerals and petroleum, which are easily replaced by other trade partners in Asia and Africa.
We are wholly unprepared for any sort of economic retaliation, which would only compound as time goes on. Thus, the dilemma remains. When it comes to China-UK relations, British leaders remain stuck between a rock and a hard place.