Boris’s China plan is a missed opportunity

From Brexit to China, ‘cakeism’ – the idea that it is possible to govern without making hard choices – appears to be the defining philosophy of Boris Johnson's government. A hawk to the hawks and a dove to the doves; the Prime Minister wants to be all things to all men. The result is that the government have so far failed to make the hard decisions needed when it comes to China. But as with lockdown in March 2020, dither and delay is only going to increase the difficulty and trouble ahead down the road.

The publication of the integrated review today makes this painfully clear. The report's most significant passage is buried 62 pages in: 

'China’s growing international stature is by far the most significant factor in the world today, with major implications for British values and interests and for the structure and shape of the international order.'

If the government believes that the challenge posed by China is 'by far the most significant factor', why was this not at the heart of the report? The answer is simple: because the desire to fudge China policy, to sit on the fence as hawks and doves within the Conservative party battle it out, means that the recommendations which follow this bold and realistic statement about the state of play in geopolitics are deeply underwhelming.

There is an enigmatic tone at the heart of the integrated review, perhaps best encapsulated in this paragraph: 

'We will continue to pursue a positive economic relationship, including deeper trade links and more Chinese investment in the UK. At the same time, we will increase protection of our core national infrastructure, institutions and sensitive technology, and strengthen the resilience of our critical supply chains, so that we can engage with confidence. We will not hesitate to stand up for our values and our interests where they are threatened, or when China acts in breach of existing agreements.'

Boris’s China policy essentially pivots around three priorities: the pursuit of greater trade ties; statements about human rights and British values; and the protection of national security. The trouble is that the first goal very easily clashes with the other two.

As on issues like the Northern Irish protocol, eventually the UK will have to fall off the fence. Beijing’s wolf-warrior diplomacy, spiralling US-China tensions, growing evidence of gross human rights violations in Hong Kong and Xinjiang, and the politicisation of Chinese state capital mean that seeking trade ties and the desire to protect national security or champion British values will inevitably come into conflict.

If Britain wants to be able to credibly stand up for its values and national security interests in the long run, the strategy must be to wean ourselves off dependency on Beijing. We should heed the lessons of our friends in Hong Kong or Australia, where economic coercion has been used as a geopolitical weapon.

Hong Kong Watch recently published an in-depth report on 'red capital' in Hong Kong. It showed that an influx of mainland money and assets – so called 'red capital' – changed the power dynamics in the city’s politics. Beijing’s long-term strategy was to bring the city’s economy under control. It achieved this by driving an increase of red capital into Hong Kong and by increasing the dependency of the city’s other firms on Chinese markets.

Businesses are Beijing’s key allies in controlling events in Hong Kong. Chinese and Western businesses alike have endorsed the National Security Law, knowing that their dependency on Beijing leaves them with little choice. Employees of Chinese firms were banned from protesting, mainstream Western firms have been forced to ditch employees who opposed the Chinese regime or participated in protests, HSBC has frozen the assets of democrats, and pro-democracy media has faced an advertising boycott from corporations. 

In this way, the Chinese government exercises phenomenal political control. So it is naïve to imagine that Britain can hold a ‘twin-track’ foreign policy – with values, security and trade supposedly independent considerations. The stronger China becomes, the more it will mobilise each area of leverage it has. Deng Xiaoping’s philosophy was ‘bide your time, hide your strength’; Xi Jinping is set on projecting geopolitical muscle far and wide.

The ferocious treatment of Australia should be a significant warning. Australia’s commodity industry boomed because of China’s rise. But in recent years the situation has soured after it emerged that China was planting agents in the heart of Australia. As tensions have mounted, Beijing has put Australia in the deep freeze. This has enormous costs to the Australian economy. Yet Australia has not taken a more robust stance than the UK or US over issues like Hong Kong, the treatment of Uyghurs or Covid-19. They have been punished because they were more vulnerable. In both Hong Kong and Australia, the Chinese authorities have been able to bend the rules to make a political point because they enjoy economic supremacy. The dangers of dependency are clear.

The British government is right to say that China’s rise is the most significant geopolitical factor of the decade. Sadly, though, the fudged compromise in the integrated review does not stand up as a strategy in response. The different priorities will inevitably conflict. We have seen it with Huawei, we are going to see it with China General Nuclear, university collaboration and a whole list of other issues. China’s strategy of military-civil fusion mean that it is inevitable. It is far better to have a clear and coherent strategy now, one that puts British values and security interests at the heart, than put off the decisions. If we dither and delay, we'll be faced with more painful decisions as even more of our businesses and infrastructure become reliant on China. Boris's integrated review is a missed opportunity.