The future of British-Chinese relations

7 July 2020

Fewer opportunities for British-Chinese cooperation make the prospect of healthy relations between the UK and China in the near future increasingly unlikely

Chris Cawley

This short article investigates the decline in British-Chinese relations, following a period of strengthening in the early-mid 2010s. Catalysed by China’s handling of the COVID-19 pandemic, British relations with China look to sour further. This contribution charts the gradual decline of positive relations that had been constructed during the Cameron-Osborne era of UK politics, following altercations over national security, foreign affairs and COVID-19. Shifts in foreign direct investment (FDI) from China also allude to a changing relationship. Further, increasing UK-based opposition to China makes the reinvigoration of relations unlikely, at least in the near-term. Considering China’s rapid growth, and its status as the next world superpower, there is a debate to be had about the UK’s relationship with the country.

This contribution will begin by deconstructing the backdrop to the decline in this relationship, highlighting the key Cameron-Osborne era initiatives that fostered the once-strong relationship between the two countries. In the second part, this article shows how national security scares, primarily in the form of Chinese cyber-attacks and espionage tactics, have raised questions over the role Chinese companies should play in British energy and telecoms infrastructure, particularly regarding 5G data networks and Hinkley Point C nuclear power station. In an effort to display the deterioration in relations, this article also highlights the impact of aggressive Chinese foreign policy. Taken together, all of this is tied in to a steady decline in FDI in the UK from China. Finally, China’s handling of COVID-19 combined with its lack of any obvious British political allies makes the chance of any improvement in relations unlikely in the coming years at least. 

The Past: Cameron-Osborne ‘Golden Era’

Speaking in 2015, George Osborne encouraged the two countries to “stick together and make a golden decade for both our countries”. Osborne’s infatuation with China was rooted in a deep love for the country, but also his respect for the country’s unrivalled economic growth in recent history. In an effort to share the riches of China’s growth, Osborne, then Chancellor of the UK, made concerted efforts to ensure that China would be the UK’s second largest trading partner by the end of the decade. Reciprocated consular visits nurtured what was then a warm and growing relationship, which helped to attract around £40bn UK-bound investment from China. The state visits also encouraged British involvement in the Asian Infrastructure Investment Bank and promulgated the idea of tying the Shanghai and London stock exchanges.

This blossoming relationship would also lead to Chinese investment in Hinkley Point C — which had been repeatedly mothballed— and later the development of 5G networks across the UK. Relations between the two countries were proving fruitful enough for the UK to overlook human rights abuses in mainland China, most notably against the Uighur muslim population in China’s western frontier. However, this period of warm relations would not last, with David Cameron resigning his position as Prime Minister following his defeat in the Brexit referendum in 2016, bringing George Osborne with him, and Theresa May’s premiership would usher in a period of colder relations between the UK and China.

The Present: Deteriorating Relations

The dawn of Theresa May’s premiership was littered with issues surrounding national security and China. In 2015, from a poor negotiating position, the UK scrambled to obtain Chinese investment in Hinkley Point C. Following President Xi’s state visit, George Osborne managed to secure Chinese investment and contractors to complete the project. The Chinese company selected for this was China General Nuclear Power Group (CGN). It would own one-third of Hinkley Point C and has been promised contracts for more nuclear plants up and down the country. However, CGN has an unfortunate reputation for what is essentially corporate, or just standard, espionage. In 2017, a senior advisor to the company was accused of trying to obtain US nuclear technology from within China, while the UK had just given the same company full access to British energy infrastructure. Since then, the company has been blacklisted from operating in the US. Questions about the risks associated with China’s involvement in the power plants for the UK’s national security have been frequently raised. Is it sensible for such a large percentage of the UK’s strategic infrastructure to be given to a nation that is not a security ally? It is perhaps inevitable this has caused rumblings and concern across the UK.

This is not an isolated case, with Chinese company Huawei also being involved in the development of 5G networks across the UK. Questions were again raised — this time by MI6. As work on the UK’s 5G networks gets underway, Huawei have been at the forefront of the development. Aiding with the roll-out of 3G and 4G, Huawei’s infrastructure can be found all over the world, including right across the UK. Sir Richard Dearlove, MI6’s former Chief, has recommended that the company should be completely banned from supplying 5G networks in the UK because its operations are “subject to influence from the Chinese state.” As a result, the UK is expected to remove Huawei from its networks by 2023. Backlash came from China’s ambassador to the UK, Liu Xiaoming, who called the persecution of Huawei a “witch hunt”, amounting to another black mark on relations between the UK and China.

Aside from this, China’s actions in Hong Kong have also raised eyebrows. The Chinese state’s imposition of the Hong Kong Security Laws are widely seen as a violation of human rights. The laws seek to prevent external interference in Hong Kong affairs, and criminalises a range of acts that are deemed to ‘threaten national security’. These acts nominally seek to tackle subversion and secession, but also undermine the free press and advancements in democracy in Hong Kong. Many critics, including the UK, which held Hong Kong as a colony until 1997, feel that this law contravenes the ‘one country, two systems’ principle which has existed since Hong Kong became a Special Administrative Region of China’s following the end of British rule, which was designed to guarantee Hong Kong’s economic and political autonomy for at least 50 years. At the time of writing, and in response to China’s actions, PM Boris Johnson has extended UK citizenship to Hong Kong citizens who may wish to emigrate. Chinese ambassador to the UK, Liu Xiaoming, has been quick to condemn this action, stating “We firmly oppose this and reserve the right to take corresponding measures. The UK has no sovereignty, jurisdiction or right of ‘supervision’ over Hong Kong.”

China’s growing military presence, particularly in the South China Sea, has also been cause for alarm. China has been constructing archipelagoes for military purposes within the sea, extending the countries territorial reach far beyond its traditional borders. Countries like Malaysia, Brunei, and the Philippines have expressed concern as to what this will mean for security, fishing, oil and trading rights. Roughly one-third of global maritime trade passes through the South China Sea, so it is understandably a hot topic. The US has also taken a strong stance on the matter, initiating military patrols through the region as part of a ‘freedom of navigation’ strategy. Notably, the UK has kept remarkably quiet on the topic, but with potentially little to gain from intervening, this is perhaps unsurprising.

Most recently, China has been involved in further territorial disputes in the contested region of Kashmir which borders India. In the recent weeks, direct military conflict has led to the death of several dozen Indian soldiers. Diplomacy with China as a result of these actions has become increasingly challenging, and which has in turn made relations between the UK and China especially tense.

All this has made it increasingly difficult for the UK to openly engage with China. These acts, in isolation, might be possible to overlook for the benefit of diplomacy. However, when combined, these challenges prove almost insurmountable. This contribution views these issues through a UK-centric lens, but only to discern why British relations with China are expected to deteriorate further.

The Future: Downward Spiral

As Chinese soft power is increasingly felt across the globe, the UK is being forced to take a stance on many of these issues. Unfortunately, the aforementioned issues are increasing in frequency and becoming more and more prominent. The UK is finding it difficult to turn the other cheek.

During the Cameron-Osborne era, Chinese FDI into the UK encouraged the British government to ignore any misgivings it may have had relating to China. While in recent years, Chinese FDI has fallen from roughly £4.3bn in 2018 to £3.6bn in 2019, this is arguably part of a larger trend of diminishing Chinese investment in Europe. Reductions in investment spell the end to soft diplomacy through economic investment.

More recently, China has repeatedly been accused of not acting quickly enough to stem the spread of the Coronavirus pandemic. According to one poll, a majority of British citizens feel that China is to blame for the rapid dissemination of the disease. Beijing has been quick and strong in its rebuttals, owing to its new, assertive, ‘Wolf Warrior’ diplomats (named after a popular nationalist Chinese film series) who have defended the country’s record and have also facilitated ‘donation diplomacy’, whereby Personal Protective Equipment is sent from China to support countries around the world in their attempts to contain the spread of the pandemic. China’s change in diplomatic appointments is designed to pursue “major country diplomacy with Chinese characteristics”, and the international condemnation of China’s methods to contain the virus have been met with firm opposition in Beijing. It is to be expected that this new style of Chinese diplomacy, with its brash and abrasive methods, will extend beyond China’s reputation for handling the virus and may come to characterise China’s new approach to international relations.

At home, the UK’s regard for China continues to deteriorate. MPs in the House of Commons have formed the ‘China Research Group’, and while the group has expressed its intentions to “promote debate and fresh thinking”, they have also been accused of being ‘anti-China, and Foreign Secretary Dominic Raab MP has also starkly suggested that the UK needs to reconsider its relationship with China.

This already deteriorating relationship combined with fewer opportunities for British-Chinese cooperation make the prospect of healthy relations emerging between the two countries in the near future seem unlikely. Meanwhile, China’s decisions to impose its authority across the globe is being felt with increasing intensity, mirroring the US-Russian Cold War of the late 20th Century and at the time of writing, these tensions are only expected to increase.