Wed, Mar 09, 2005 page9

• The UK is not alone in Europe when it comes to the art of kowtowing to Beijing

  • THE OBSERVER
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  It was noteworthy that while US President George W. Bush was visiting Europe, UK Chancellor of the Exchequer Gordon Brown, Prime Minister Tony Blair's presumed successor and the UK's longstanding finance minister, was several kilometers away in China.

  The Blair camp had been spinning that Bush's visit was payback time for Blair's support of Bush before, during and after the invasion of Iraq.

  Part of the payback seems to have been that Bush did not touch foot on British soil, for fear of alienating even more former Blair supporters who continue to be outraged by the way their prime minister took them to war on false pretences. Let's face it, Bush is not an ideal member of Blair's campaigning team for re-election on May 5.

  But even the claim that Bush went to Continental Europe to please Blair is yet another example of the dubious quality of 10 Downing Street "spin."

  For the fact of the matter is that Bush had many reasons for trying to make up with Old Europe, not least that, quite apart from the delicacies of Middle Eastern diplomacy, Bush is not at all happy about Europe's plans to resume sales of arms to China.

  China's designs on Taiwan do not feature much in the British opinion polls, but they are an obsession for Washington. Quite apart from wishing to bring Europe on side with regard to his plans for the Middle East, Bush wanted to get his message across to Europe about preserving the Chinese arms embargo.

  Alas, all the indications are that Europe has not got the message, and cannot wait to resume arms sales. Also, to judge from the hype surrounding Brown's lightning tour of China, the UK is not alone in Europe when it comes to the ancient practice of kowtowing to Beijing.

  We seem to have moved a long way since the mid-1990s, when Chris Patten, as the last governor of Hong Kong, went out of his way to campaign against China's abuse of human rights.

  The week before Brown went on his whistlestop tour of China, the French press reported (with no subsequent denials to my knowledge) that in the previous fortnight there had been 200 state-sponsored executions in China.

  The leading Western journalist on Chinese affairs, Jonathan Mirsky, has often tried to draw the West's attention to the reality of the Chinese regime before, during, and after the bloodbath that is now known simply as Tiananmen Square.

  It is the way of the world, however, that the prospect of trading opportunities overrides all else, and as the West cultivates China, an awful lot of blind eyes are going to be in evidence.

  Thus, after years of hearing that the EU is the UK's most important trading partner, the British are told by their own finance minister that they must rise to the "China challenge."

  Unfortunately, a foretaste of what is to come was provided by the way that Brown's visit, although billed among other things as a means of securing a ?1 billion (US$1.9 billion) rescue operation for the car manufacturer Rover's plant at Longbridge in central England in fact ended up with an offer from Chinese partners of a mere ?130 million as well as many holes in the idea of future "commitments."

  The Chinese were not born yesterday. They have several thousand years of history behind them, and the odd Long March to boot. They did not follow the Soviet Union by allowing communism to collapse around them, and embrace the "free market culture" of the time. Sure, they have introduced a private sector -- now a third of the economy as opposed to an estimated 1 percent in the 1970s -- but they have been ultra-cautious in how they have done this.

  They maintain a regime of controls on capital flows, and have piled up hundreds of billions of dollars of foreign exchange reserves, propping up the US currency in the process. This gives them enormous economic power, which they will not hesitate to use when necessary.

  We have to live with China -- and how! -- but during the many diplomatic meals that will be consumed with Chinese politicians, officials and businessmen in the coming years, a long spoon will come in handy.
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