It seemed such a good idea at the time. If Britain could mend its political fences with China and engage whole heartedly with the new economic power of China then substantial economic benefits would accrue to the UK. Then Prime Minister David Cameron duly made a properly ritualistic apology for daring to have met the Dalai Lama, and a flurry of bilateral high level visits culminated in the full pomp and ceremony of the State Visit in 2015. Sadly, the new golden age in Britain's relationship with China that was inaugurated with President Xi's State Visit was never much more than a politician’s fantasy.
It was built on the very uncertain foundation that there could be a lasting improvement in the bilateral political relationship, without taking any account of wider political circumstances, and on the hopes of the then British government that economic relations with China, and Chinese investment in particular, would be a major driving force in bringing the British economy round. The Chinese scented bargains from an overeager UK government, and relished the avoidance of the awkward issues the British seemed to feel was necessary to secure that investment. Britain could usefully be, at least for the moment, China's best friend in Europe. It was also in a wider sense a potential wedge in the Atlantic alliance, further undermining the UK’s – and more widely Europe’s commitment – to East Asian security concerns. Some saw Britain’s early sponsorship of China’s brainchild, the Asian Infrastructure Investment Bank, in those terms.
It has all unravelled considerably quicker than either the Chinese or the British governments ever imagined. At its simplest the international environment has changed, British politics have changed, and China has not changed. Britain has decided to leave Europe, so the need for it as China's best friend there has evaporated as far as China is concerned. Britain's direct influence on European policy, which had been in many respects beneficial to China, has to all intents and purposes gone. The principal proponents of the previous British policy, David Cameron and George Osborne, have left the scene. China for its part is, if anything, more assertive in its foreign policy, and domestically the Chinese rulers are engaged in the most serious crackdown on dissent seen in a generation. It is more difficult even for the UK government to see China solely as a benign force for economic development.
What brought things to a head was problems over the jewel in the crown of the new era, the deal on China’s involvement in Britain’s urgently needed nuclear power generation. [fold]
It had been agreed that China would invest in the new power station to be built with French technology at Hinkley Point, and thereafter Britain would be prepared to buy Chinese technology for a further power station at Bradwell in Essex. This would have been a major breakthrough for China, getting substantial involvement in the critical power infrastructure of a Western country, and selling its technology to do so. Britain, traditionally committed to open and unrestricted investment, raised no objections.
But Theresa May’s government decided to rethink the project. There are many potential reasons for this, some of which centre on security concerns at Chinese close involvement in so sensitive an area for the UK economy. In the China context, these are probably the ones that matter. And no sooner had the UK decision been announced than Australia decided to block Chinese involvement in its energy sector and the US announced the principle Chinese firm involved in the Hinkley Point venture was subject to espionage concerns. The Chinese have sought to put pressure on the UK government to uphold its original decision, and its media railed against 'unwanted accusation against its (China’s) sincere and benign willingness for win-win co-operation'. The Chinese Ambassador to Britain has spoken of relations being at a crucial historical juncture.
This all poses a serious challenge for the new British administration. How it responds will have substantial effects on the bilateral relationship. The economic arguments for an effective relationship with China are stronger than ever. If Britain is to prosper in the post Brexit world it will need to engage profitably with the world’s second largest economy. Before Brexit, Britain was the major recipient of Chinese investment in Europe. It will wish this to continue. But the strings attached to Chinese investment, and possibly the wider political implications of a relationship focused solely on economic matters, are now matters that the new UK government seems willing to take into serious consideration. Hinkley Point will not be the last of the problems with China that will need managing under the new circumstances. The unravelling of the golden era is demanding a rethink of the basic principles of the relationship and of how British interests and values should best be upheld both bilaterally and within the wider international context. That is quite an ask for a government struggling with multiple other problems.
Photo courtesy of 10 Downing Street