GB Energy. British Steel. An embassy at the Royal Mint. The Chagos deal. Hinkley Point. Huawei. The common question underlying all of these is the kind of relationship Britain should have with China. The common answer of successive governments seems to be “we don’t know”. After an effective stalling of meaningful dialogue under the Conservatives, under Labour consistent engagement with Beijing is back. However, a systematic China strategy remains lacking. The longer this continues, the less able Britain will be to adapt to the emerging world of great power competition.
For Britain, the magnitude of the China challenge is unprecedented: a major power from an entirely different political and cultural tradition with the power to reshape the international order and rapidly eclipse most of the West, potentially even the United States, technologically and economically, under the leadership of a nondemocratic but effective regime. Productive engagement with Beijing is essential — China dominates global manufacturing and the supply of resources vital for 21st century economies and leads the world in an increasing range of technologies. At the same time, China is an authoritarian state governed by a party which pervades all areas of its engagements abroad, meaning engagement must be managed systematically to mitigate national security risks.
Britain now lags behind in 5G provision and lacks an established centre for assessing digital risks from Chinese investments
Faced with such a challenge it is perhaps not surprising that a succession of governments has shied away from developing a serious long-term China strategy. But that cannot continue if Britain is to successfully adapt to a world in which China’s influence is growing and China-US competition increasingly drives the state of international relations. This is a world in which governments can no longer fall back on the “rules-based order” or “international norms” — a world of great power competition in which middle powers like Britain must navigate a difficult path between access to technology and economic opportunities on one side and the risks of overreliance on the superpowers on the other.
A first step is to move away from the game of whack-a-mole which has characterised Britain’s approach to China in recent years. The response to risks of Uyghur forced labour in GB Energy’s supply chains was to ban GB Energy from relying on such supply chains — not to try to deal with the problem of forced labour in supply chains more broadly. To prevent the closure of Britain’s last remaining blast furnaces the response was to intervene to save British Steel rather than address the much bigger question of Chinese ownership of critical resource production and infrastructure. While fears of Chinese influence over Mauritius have been overblown, the Chagos deal appears to have been agreed based on point of principle rather than with consideration of British and allied security interests in an Indo-Pacific where China operates the world’s largest navy.
The list goes on. These are reactive, issue-specific responses that fail to address underlying issues presented by China. Getting beyond firefighting issues as they arise is not helped by the poor quality of public debate on China in Britain. From media to Parliament, this debate is characterised by lack of awareness and an unfortunate tendency to polarisation, China being seen either solely as an evil autocracy bent on human rights abuses or as a benign go-to solution for economic growth and green energy.
The reality is of course more complex. China’s political system presents challenges for Britain ranging from the risk of forced labour in supply chains to efforts by the Chinese Communist Party to intimidate dissenters and activists in the UK. Meanwhile, China’s approach to international influence and data collection means that Chinese investments and especially digital systems do present national security risks.
However, in common with other countries around the world Britain cannot avoid supply chains reliant on Chinese-manufactured components or raw materials extracted and processed by Chinese companies. Moreover, as China’s technological prowess grows it is outpacing the ability of Britain and its allies to compete in areas from electric vehicles to robotics. If Britain wishes to maintain economic relevance in the 21st century, it will need access to Chinese supply chains and technology.
As China’s influence grows amid an increasingly volatile geopolitical landscape, cases like those of GB Energy and British Steel will arise again and again. This will stretch limited government resources and could needlessly antagonise China by singling it out for a response each time. A systematic approach is urgently needed based on a clear long-term vision of what Britain seeks to get out of its relationship with China, where it is prepared to allow investment, and what conditions that investment should be based on, such as onshoring of supply chains, mitigation of digital risks, and technology transfer.
Ironically, the closest Britain has come to a systematic approach was over Huawei, the Chinese telecoms giant engaged to provide 5G infrastructure. The then government took the question of national security risks from Chinese digital components seriously, and set up a body to assess and mitigate the risks. The Huawei deal was rolled back under pressure from Washington and the Huawei Cyber-Security Evaluation Centre ceased to operate. As a result, Britain now lags behind in 5G provision and lacks an established centre for assessing digital risks from Chinese investments.
The Huawei case points to the elephant in the room — the United States. A clear-eyed and sustainable China strategy must factor in the role of Britain’s longstanding but increasingly transactional ally and its strategic competition with Beijing. While London and Washington share many concerns about China, cooperation should not come at the expense of Britain’s long-term ability to access Chinese technology and supply chains, something threatened by the recent trade deal. As China-US competition intensifies, Britain should avoid picking a side as far as possible and seek to minimise the risk of coercion from both sides.
Britain’s China strategy should be based on Britain’s interests. But for that to happen, the government needs to be clear about what those interests actually are — what it actually wants to get out of the relationship with Beijing in the long term. This should be based on a systematic assessment of the potential for Chinese technology and investment to help the UK, and the measures required to make that work while curtailing Beijing’s capacity for malign influence. In a world of growing Chinese influence and great power competition, the reactive approach of the past decade will not cut it.
