UK Blinks in China Face-Off

No doubt a sudden reality-check of the British economy’s dependence on China had a sobering effect on Downing Street’s reckless antagonism towards Beijing.

Britain’s Foreign Secretary Dominic Raab made a much anticipated annoucement in the House of Commons this week that London was suspending an extradition treaty with its former colony Hong Kong in protest over Beijing implementing new security laws on the territory.

The United Kingdom is following the United States, Canada and Australia which have also ended extradition treaties with Hong Kong. They accuse Beijing of undermining political freedoms bequeathed to the island territory as part of a handover deal by Britain in 1997. China maintains new security laws are required to quell Western-backed unrest in the special administrative region which is ultimately under Chinese sovereignty.

However, in the end, Raab’s much-vaunted punitive measures did not go far enough for more hardline Tory parliamentarians and other opposition lawmakers who were disgruntled that the government did not initiate sanctions against Chinese officials. In short, it was a climbdown.

Indeed, the London government appeared to be tamping down a political firestorm it had ignited in recent days with China. The decision last week to axe Chinese tech company Huawei from Britain’s telecoms network, as well as reports of a British aircraft carrier being dispatched to the South China Sea, had been met with a furious response from Beijing which accused London of hostility and starting a new Cold War.

China’s ambassador to the Britain mockingly told the BBC that Britain was “dancing to the tune” of Washington. Beijing also vowed to hit back with reciprocal economic and diplomatic measures.

On the day that Foreign Secretary Raab unveiled Britain’s response to the Hong Kong issue, it was notable how he toned down his erstwhile gung-ho rhetoric. In a statement to the House of Commons, Raab surprised some observers by saying Britain wanted a “positive relationship” with China.

He said: “There is a huge amount to be gained for both countries, there are many areas where we can work productively, constructively to mutual benefit together.”

On the same day, too, Prime Minister Boris Johnson also signaled a climbdown from the high-horse attitude towards Beijing.

Johnson said there was a need for “balance” to be struck in the UK’s relationship with Beijing.

“I’m not going to be pushed into a position of becoming a knee-jerk Sinophobe on every issue, somebody who is automatically anti-China,” he said.

Johnson said he would not “completely abandon our policy of engagement” with Beijing, adding: “China is a giant factor of geopolitics… You have got to have a calibrated response and we are going to be tough on some things but also going to continue to engage.”

What this suggests is the British authorities had belatedly incurred a rude awakening from their delusions of post-colonial grandeur with regard to relations with China.

In the 21st century, Britain is no match for China, economically or militarily. China’s economy – the second biggest in the world after the U.S. – is six times that of Britain, while China spends fivefold more on its annual military budget.

The British economy is heavily dependent on Chinese foreign direct investment. There is far greater Chinese capital investment in Britain than elsewhere in Europe or North America. After the setback to Huawei, China could hurt the British economy severely if its companies redirected capital to other Western destinations. The relocation being prompted by a loss of confidence by Chinese firms in Britain.

For example, TikTok, the Chinese social media company, is reportedly retreating from its plans to make Britain its global overseas headquarters following London’s U-turn on Huawei. Some 3,000 British jobs are at stake if TikTok cancels its plans.

Another illustration of British dependency on China is the reliance of universities on Chinese students for their income. A recent report shows that many of Britain’s most prestigious universities are reliant on Chinese funds for up to one-third of their earned tuition fees.

Such cold economic realities seem to have given Johnson’s government pause for thought in its dalliance with Cold War posturing towards China. It’s as if British ministers had momentarily forgotten that their nation is a shadow of its former imperial power. They giddily joined in Washington’s policy of ratcheting up hostility towards Beijing, only to realize that Britain is way out of its depth.

Hence the discernible attempt to soften the “punitive measures” that London was threatening against Beijing. Cancelling an extradition treaty is more symbolic than having any practical impact while balking at imposing sanctions on China indicates that British ministers received a briefing from Whitehall mandarins telling them to dial down the hostile rhetoric or else be prepared to face eye-watering economic repercussions.

It seems significant that U.S. Secretary of State Mike Pompeo flew into London within hours of Johnson and Raab expressing reticence about going down the Cold War route with China. Pompeo reportedly held talks with the British premier and his foreign minister to urge them to take a harder line on China.

This is the dilemma for Britain as a vassal of Washington. It is being pushed to do Washington’s bidding in riling up Beijing, but the British know full well that they can’t afford to incite China’s anger. Johnson’s kowtowing balancing act between the United States and China is one of embarrassing weakness.