Are we nearly there yet? The UK looks for a new position on China

The UK looks for a new position on China
Where one stands is sometimes a matter of perspective.

What kind of relationship does the UK want with China? More accurately, what kind of relationship can it afford?

For most Britons – now emerging from a second national lockdown – it could seem like there are more important things to be getting on with. Yet finding a coherent position on China has seldom been as urgent as it is now.

Over the past decade or so UK-China relations have resembled a game of snakes and ladders. Having scaled the heights during Xi Jinping’s state visit in 2015, by 2021 it seems like they have slithered all the way back down to square one again (even if this is not entirely true). Much else has changed besides.

China is technologically, economically and militarily far stronger than it was six years ago. It is wealthier, more self sufficient and its government less inclined to compromise. Whether or not it has reached parity with the US now scarcely seems to matter.

This shouldn’t come as a surprise. Commentators have been predicting as much for decades. After all, the same regime is still in charge in Beijing. It is still pursuing roughly the same sorts of policies and still ruling in roughly the same manner.

By contrast, the West has seen lots of change, not least post-Brexit, post-Trump, post-pandemic Britain. Faced with so many once-in-a-generation upheavals, the UK’s relationship with China assumes even greater importance, not only in terms of trade but also in tackling a whole range of global issues, from climate change and green energy to health tech and many others.

Figuring out how this relationship might work won’t be easy.

Concerns over Hong Kong and Xinjiang and public inclination to blame China for the COVID outbreak will not make favourable mood music. Such issues cannot be wished away. Security, inevitably, will take top priority. Yet any approach to China must be carefully calibrated.

What cannot happen is for the pendulum to swing too far in the opposite direction from the Cameron-Osborne-era China love-in. Hawkish talk from backbenchers might win applause in Washington and earn a few tabloid headlines but will not make the slightest difference to policy makers in Beijing and could now come with a real-world cost.

In 2019 China accounted for 4.4 percent of British exports, worth around $42 bn. That’s more than Russia but short of other European countries such as the Netherlands and Germany, whose exports to China in 2019 were worth some $113 bn – despite outspoken disagreements on trade and security. The IMF predicts China’s economy will grow by around 8% in 2021. Where else will Global Britain find such an opportunity to deliver growth?

As Kerry Brown notes in his essay, China’s Political Economy and the UK Post Brexit, ‘to look after one’s own people is also a moral responsibility.’

As down beat as things seem, however, and despite the huge economic and geopolitical imbalance, Britain still has cards to play. It is still member of the G7 and still has a permanent seat at the Security Council. British education is still desirable. So is British technology and collaboration on R&D. Chinese middle-class consumers still have an appetite for British brands, from Premier League football to designer luxury fashions, and Britain still retains the kind of cool that excites millennial and Gen-Z tastemakers in Shanghai, Beijing and Shenzhen.

All this will be food for thought for those hearing evidence in the parliamentary inquiry now under way into the UK’s security and trade relationship with China. The results of this could have far-reaching consequences for the future of the UK. Striking the right balance will require all the subtlety, pragmatism and nuance for which British diplomacy was once esteemed.

John Millichap

Co-founder & creative director, Signal8 Digital Marketing
john@signal8.co