Friday, 22 May 2020

There’s a way to escape China’s tightening grip

Rather than persist with the idea that trade will tame a brutal regime we should look to our friends in the region

The Times
What should the democracies do about China? There is widespread agreement that Beijing’s role in the Covid-19 catastrophe demands a response, perhaps even retaliation, and a rethink of our policy towards an emerging superpower.
During the pandemic the regime has boasted in an Orwellian fashion of “transparency” while bullying countries that dare to ask valid questions about its initial responses to the outbreak. This week China slapped 80 per cent tariffs on Australian barley imports after Scott Morrison, the Australian prime minister, dared to suggest an independent inquiry into the origin and handling of Covid-19.
In Westminster the situation is confused. There is a Tory consensus that something must be done by the US and its allies, but little agreement so far on what. Labour under its new leader is worried about Beijing. Simultaneously, Boris Johnson is under pressure from the new China Research Group of Tory MPs, who want a more robust line.
The prime minister probably no longer has the Commons votes to sustain his compromise policy on Huawei, where the Chinese tech giant is allowed into parts of Britain’s 5G network, but China will hit back if he reverses his decision. “There is,” admits a Whitehall adviser, “a dearth of strategic thinking in Britain and Europe about China.”
A landmark new essay by the historian Francis Fukuyama, “What kind of regime does China have?”, published this week in The American Interest, may provide answers and a useful way for democratic countries to start thinking more about China and what we are up against.
What we are up against is Xi Jinping, China’s leader for life, and a totalitarian with expansionist tendencies. Understandably perhaps, when Britain’s economy needed an investment boost after the financial crisis, David Cameron and George Osborne tried to make best friends with China and Xi. Yet much of the original western thinking about him was plain wrong.
“We are not,” says Fukuyama of Xi, “dealing with the China of the 1990s or even the 2000s, but a completely different animal that represents a clear challenge to our democratic values.” Fukuyama’s essay was clocked inside No 10 and in the Foreign Office this week.
For decades policymakers were attracted to the heartwarming and self-flattering idea that, because China was becoming wealthy through ostensibly capitalist commerce, it would move steadily closer towards a western liberal model of government.
Xi, it turns out, is not that way inclined. He is a Chinese Communist Party princeling whose instincts are rooted in a Maoist desire for total control, as evidenced by the camps holding up to one million Muslims and the terrifying tech surveillance that Chairman Mao, the biggest mass murderer in history, could only have dreamt of.
In Hong Kong the Chinese Communist Party’s brutality is unrelenting. New draconian legislation is reportedly planned that protesters fear will be used to forbid dissent and recast it as terrorism punishable by the state.
Worryingly, Xi is not only a totalitarian, he is expansionist. The China of the Mao era was largely preoccupied with its internal traumas and not much bothered with the outside world beyond immediate neighbours. Now Xi draws new lines on the map and troubles everyone. In Europe and America there is Chinese spying, digital warfare and interference with our free institutions.
The temperature is rising in the run-up to the US election, in which Democrats and Republicans will compete to bash China. It will be tempting for other leaders to join in with wild rhetoric or chest-beating about a new Cold War. Rather than that, Britain would do better to disengage economically from China wherever we can safely do so but in as undemonstrative and calm a fashion as possible, by reshoring production when feasible and becoming even better friends with democratic countries such as Japan.
Disengagement from China is problematic for the British economy, for the obvious reason that Britain needs all the business it can get. China has only just reactivated the scheme with the London Stock Exchange that allows shares in Chinese companies to be sold here.
Still, we must balance that with not being beholden to Beijing, especially when ties can be strengthened with democratic countries in the region — countries that like us and don’t feel compelled to try to eliminate free speech in our universities or send waves of cyberbots into our institutions to disrupt communications. China is a giant market but it is not the only market and not so big that it should shape British policy to the exclusion of all other considerations.
According to the Office for National Statistics’ “Pink Book” published late last year, in 2018 the UK exported £22.6 billion worth of goods and services to China, while we imported £44.6 billion. That was eclipsed by our trade with the US, where we exported £120.8 billion and imported £76.7 billion. Trade with the EU27 is even greater.
Encouragingly, we also do considerable amounts of trade with peaceful countries in China’s neighbourhood. To Japan, Singapore, Malaysia, Taiwan, South Korea, Vietnam, Australia and New Zealand combined, Britain exported £50.6 billion of goods and services in 2018.
China is not the be-all-and-end-all. It is, though, a nationalistic superpower set on a dangerous path that could result in conflict. Better to step away and, while Xi is in charge, forget romantic notions that the West led by the US can reshape China to our liking.

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