The rivals to replace British Prime Minister Boris Johnson are locked in a battle to take the toughest line on China, firmly drawing a line under the vaunted golden era for Sino-British ties.
British Secretary of State for Foreign, Commonwealth and Development Affairs and current front-runner in the Conservative Party leadership race Liz Truss, has branded Chinese tech giants a security risk, called to arm Taiwan and, in private, labeled China’s crackdown in Xinjiang a genocide, according to reports. Former chancellor of the Exchequer Rishi Sunak has named China the “biggest long-term threat to Britain.”
“There’s a perception China’s actually more of a hostile-state relationship so you should reconsider all areas of engagement,” said Julia Pamilih, head of research at the UK’s China Research Group, set up by Conservative members of Parliament to scrutinize Sino-UK ties.
If Truss or Sunak follow through with a hardline approach when one of them becomes prime minister on Sept. 6, they will be weakening ties with the UK’s third-biggest trade partner — a major source of cheap imports — right at a time when the country’s cost of living crisis is biting the hardest, with inflation soaring into double digits.
They will be in line with the US, which is keen for allies to support it in more clearly taking on China over human rights issues.
However, amid fears about the involvement of China-backed companies in critical UK infrastructure, the new leader will also be closing the investment spigots that their fellow Tories David Cameron and George Osborne sought to open just seven years ago when they were prime minister and chancellor of the exchequer.
In 2015, the two men said Britain would be China’s “best partner in the West,” promising a “golden era” in relations.
Now, Truss and Sunak are apparently calculating that a degree of economic damage is an acceptable price to pay for defending Western principles.
“There will be a cost in terms of diplomatic relations and probably in the Chinese willingness to invest in capital projects here,” said Royal United Services Institute chairman David Lidington, the de facto deputy to former British prime minister Theresa May when she was in power, adding that “the Chinese will look at actions rather than slogans.”
A lot has changed since the Cameron era amid alleged Chinese human rights abuses against the Uighur ethnic group, suppression of civil liberties in Hong Kong and Chinese President Xi Jinping’s (習近平) failure to condemn Russia for the war in Ukraine. This has prompted the UK, US and the EU to take a harder stance.
“For too long, politicians in Britain and across the West have rolled out the red carpet and turned a blind eye to China’s nefarious activity and ambitions,” Sunak said last month.
“They are stealing our technology and infiltrating our universities. And abroad, they are propping up Putin’s fascist invasion of Ukraine by buying his oil and attempting to bully their neighbors, including Taiwan,” he added.
Earlier this year, when Sunak was chancellor of the exchequer, British Treasury officials drafted a deal to deepen trade links with China, but the initiative was called off and seems unlikely to be resurrected.
Chinese Ministry of Foreign Affairs spokesperson Zhao Lijian (趙立堅) has accused Sunak and Truss of “hyping up the so-called China threat” for political clout.
The Chinese government is less concerned about Sunak than Truss — the clear front-runner. It is trying to discern the approach she would take as prime minister, said two people familiar with the matter on condition of anonymity.
Truss used her opening pitch as foreign secretary last year to characterize China as a strategic threat contrasting with the “network of liberty” she wanted with allies such as the US and Australia.
That alliance was strengthened with the creation of the AUKUS trilateral security pact, designed to counter China’s growing clout in the Indo-Pacific.
During the leadership contest, Truss advocated cracking down on Chinese-owned companies such as TikTok and warned “we can’t be strategically dependent on China.”
While such jockeying is driven by the internal dynamics of the Conservative Party — there is a significant caucus of anti-China Tory MPs — it also reflects that Britain is becoming less willing to separate growing trade ties from managing security risks.
Tens of thousands of Chinese students studying in Britain contribute ￡2.5 billion (US$3 billion) annually to the UK economy, while 880,000 Chinese tourist visits brought in ￡1.7 billion in the year before the COVID-19 pandemic. Total trade between the two countries jumped 5.5 percent to ￡93.4 billion in the year through March.
British companies are already rethinking their operations in anticipation of the UK working to decouple from China, Confederation of British Industry director-general Tony Danker said, adding that removing China from corporate supply chains would push up prices.
China also stands to lose: Its exports to Britain are more than double the flow the other way. Moreover, China saw involvement in UK industries such as nuclear as a showcase to broaden the appeal of Chinese technology.
The direction of travel by Truss and Sunak is not new. Even as Johnson said less than a year ago that Britain would not “pitchfork away” Chinese investment, his government worked to end China General Nuclear Power Corp’s involvement in British nuclear power projects.
His administration also blocked Huawei Technologies Co from participating in Britain’s 5G network.
It remains to be seen whether campaign talk translates into tough action in power. With important industrial policy decisions awaiting Johnson’s successor, their stance will soon become clear. Britain is probing a Chinese-led takeover of Newport Wafer Fab, which owns the UK’s largest semiconductor plant, with a decision due next month.
MPs are calling for a ban on the sale of closed-circuit television cameras from the Chinese firms Hangzhou Hikvision Digital Technology Co and Zhejiang Dahua Technology Co.
As with all Western leaders, Truss or Sunak will ultimately have to decide how much they are willing to turn a blind eye to issues such as human rights abuses for the sake of economic gain.
China’s belief is that after the campaign, pragmatism will prevail and the UK will seek a mutually beneficial relationship, according to the two people familiar.
However, Sam Hogg, founder and editor of the Beijing to Britain briefing site which monitors the relationship, predicts rocky times ahead.
“I don’t see it returning to that golden-era type pragmatic approach,” said Hogg, who expects Truss to win, adding that “she’s willing to put political headlines over the economic outcome.”
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