One of the defining features of the Cameron government was the commitment of Prime Minister and Chancellor to developing greater links with the asian tigers, and particularly China. This history of British relations with China has not always been a happy one, but in the 21st century both Cameron and Osborne recognised the rise of China as irresistible and something to be embraced rather than feared. As an island nation Britain has never been afraid to look far beyond our shores for opportunities for trade, but the Cameron government also sought to encourage Chinese investment directly into the UK, recognising that however much we sell to China we are also buying an awful lot of goods from their rapidly expanding industries. The West Midlands is the only part of the UK to have an export surplus with Beijing, thanks to its successful manufacturing industry, but it is the exception that proves the rule.

For a media eager for even the slightest hint of any change in policy under the new Prime Minister, Theresa May’s decision in July to pause on final confirmation of the Hinkley Point deal with EDF and China on a new nuclear power station was trumpeted as an end to Britain’s love affair with Beijing. This was swiftly followed by news in August that Australia’s government had blocked a £6 billion investment in their national electricity grid by Chinese investors due to ‘national security concerns’. There is certainly growing concern in that Asia-Pacific nation about their vulnerability in any conflict between China and America as a non-nuclear power. Australian newspapers in the last few days have also revealed that top Australian diplomats, including Alexander Downer, Foreign Minister for 11 years under the Howard government and now High Commissioner to the UK, warned the British government to be wary of aggressive Chinese investment.

In fact, as the story has now emerged, in July Mrs May was presented with a fait accompli by civil service mandarins and told that she must immediately confirm the Hinkley deal worth tens of billions without asking any questions. As the head of her majesty’s democratically elected government she quite rightly rejected those demands and instead studied the details of the plans over summer. By all accounts Beijing was understanding of the reasons for the delay and relations between the two countries have not suffered as a result of Mrs May doing her job properly, as Mrs May’s cordial meeting with Xi Jinping at the G20 demonstrated. The result of her pause has been a number of small but sensible changes to the deal, including a clause restricting EDF selling its stake without government approval. The government is also to introduce more stringent national security testing on all major infrastructure foreign investments in future, although of course GCHQ has been consistently engaged in monitoring previous projects.

The reality, as Mrs May and the government doubtless recognise is that in the event of a sever deterioration in relations between the West and China it is naive to imagine that in the 21st century our national infrastructure would be totally impervious to Chinese aggression whether or not they had been directly involved in its creation. The British government’s policy of engaging with China as equals, of encouraging growing links between our two countries and seeking to change China’s outlook on the world through open dialogue is the only course that will smooth potentially troublesome future waters. Any protectionist clamp down on Chinese investment and trade as currently being mooted in much of the rest of Europe would benefit neither Britain’s economy nor its long-term security.

 

 

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