Category Archives: China

Britain, China, Economic, Europe, European Union, Government, Politics, Society, United States

UK-China relations: The Brexit dilemma

BRITAIN-CHINA

Intro: Trump’s trade wars have exasperated the Eurosceptic model, which is more outdated than ever

WHEN the transatlantic alliance was more functional than now, there was never a united view of China. Beijing has always been perceived as a commercial rival and potential security threat, and a common wariness has existed. For hawks in Washington, however, the idea of an alternative superpower closing in on economic and technological parity feels existential. More dovish Europeans have been openly compromising and readier to leaven caution with engagement.

Britain has veered between the two poles. In 2015, David Cameron promised a “golden era” of open trade with China. In 2020, under pressure from the US, Boris Johnson banned Huawei, a Chinese telecoms company, from UK 5G infrastructure.

In opposition, Conservative politicians have become increasingly hawkish against Beijing. Keir Starmer’s Labour government has tilted back towards cooperation. Several Labour ministers have visited China, including the chancellor. Other ministers, including the business secretary, will go there later this year, to revive a trade commission that has been dormant since 2018. Despite being manifestly frustrated with the Chinese owners of British Steel during the recent dash to keep Scunthorpe’s blast furnaces operating, the UK government has retreated from intimations of deliberate sabotage.

At some point, a reckoning has to be made. The pursuit of economic growth and investment will inevitably come into conflict with a national security interest in keeping China at arm’s length. The question is where to draw the line. The official line is that judgment is deferred pending a Whitehall “audit” of relations with Beijing. That is due in June.

A UK government decision is also imminent on China’s status under the foreign influence registration scheme – a system for keeping tabs on international organisations and companies exercising political influence in Britain. China is not expected to be named in the “enhanced tier” of risky states, alongside Russia and Iran, but some Chinese institutions might have that designation.

Calibrating these judgments – choosing when to prioritise security over commerce – is much harder with Donald Trump in the White House. What used to be a difference of emphasis between the US and Europe looks like an irreparable fracture in the west.

Trump has started a ferocious trade war with Beijing without a convincing strategic rationale. His officials have told Europeans they will have to choose a side when it comes to vital communications technology. Yet, what we see is a US president who has become routinely aggressive in his rhetoric towards the EU, dismissive of NATO, and reliably emollient towards Putin’s Russia.

From that pattern it is clear in Brussels and other continental capitals that Washington is no longer a reliable ally and the trajectory must be “strategic autonomy” for Europe. That is changing the calculus of risk and potential benefit from a more pragmatic China policy. The authoritarian character of Xi Jinping’s regime hasn’t changed, but it presents itself as a more predictable force in international affairs while US democracy declines in harsh and sporadic spasms.

Such changes illuminate a crisis of international orientation for Britain that has been building since Brexit. Economic detachment from Europe was promised on a model of the UK as a lone sovereign agent in an open, free-trading globalised world. That concept has aged very poorly, and it stands more of an outdated concept now than it ever has. Britain is not alone in struggling to navigate relations with China in the turbulent new geopolitical climate, but choosing loneliness and isolation in a world of rival continental blocks is making the struggle much harder.

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China, Economic, Government, International trade, Politics, Society, United States

Global trade war: America is advancing its own decline

ECONOMIC

Intro: China is braced for economic turbulence due to swingeing tariffs. But it sees an opportunity by taking the longer-term view: a decline in US hegemony 

THERE can be no winners in Donald Trump’s ferocious trade war that he has unleashed, least of all among consumers and workers. In strongarm tactics, this has become a game of who can bear more pain. And because trade is at the heart of US ties with its biggest tariff target, China, the rest of the bilateral relationship is likely to deteriorate. That too is concerning.

Yet, paradoxically, despite the economic struggles of recent years, China may see a longer-term opportunity in the current crisis. Beijing’s response to the initial US tariff announcements was measured. Now it vows to “fight to the end” and has imposed an additional 50% tariff on US goods – taking total tax charges to 84% – in retaliation for reciprocated tariffs that Mr Trump now says will hit 125%.

Such an approach is unlikely to falter first. Any concessions would likely be taken as a sign of weakness, encouraging the US to ramp up the pressure even more. Xi Jinping is also a strongman who has dialled up nationalism as economic growth has slowed. Backing down would be humiliating, especially when the US vice-president, JD Vance, speaks dismissively of “Chinese peasants”.

Beijing is already allowing the yuan to weaken, but a major devaluation in the currency is thought unlikely. It has been preparing for this moment. China’s demographic boom is at an end, Mr Xi’s new vision for his nation, the impact of the pandemic, Donald Trump’s first term in office, and US bipartisanship have all turned against China in reshaping the world economy. But China has diversified in areas such as agricultural imports and found new markets for its goods – though exports to the US still account for just under 3% of its GDP. In recent weeks, it announced plans to “vigorously boost” domestic consumption, although previous action on that long-held ambition has not matched the rhetoric.

Mr Trump’s sudden announcement that he is suspending punitive tariffs on other countries for 90 days highlights an apparent underlying intention to make them distance themselves from China and stop them being used as a conduit for its goods. Still, if he goes ahead, high rates risk pushing them towards Beijing instead. Trump’s erratic policy may also reflect growing anxieties about the impact of those tariffs, not least among his own supporters. China is quietly confident that the U.S. will come under growing pressure to rethink from billionaire backers, ageing workers worried that their retirement funds are losing value, farmers, employees fearing for their jobs, and consumers contemplating higher prices in everyday consumables. A bilateral deal is not impossible, but sense needs to be restored.

Beijing does not like what lies ahead. But in the longer term, it has more confidence in its trajectory. It looks back to the 2008 financial crisis, when it “saved the world” with its massive stimulus package, and looks ahead now with emboldened self-assurance following its launch in January of its AI DeepSeek platform.

Above all, Beijing believes that when this storm has passed, few will regard the US as a dependable economic or security guarantor, with China becoming a more predictable and likeable partner. At February’s Munich security conference – where Mr Vance’s sneering attacks on European allies made the headlines – China’s foreign minister, Wang Yi, pledged that China would be “a steadfast constructive force” and “factor of certainty in this multipolar system”. Some countries may feel forced to live with Beijing’s own trade and investment restrictions, and its use of economic coercion for political purposes. But others may simply drift from America’s orbit.

China expects to suffer, but as it watches on it will not be entirely unhappy as the US advances its own decline.

This is a transformational moment in the global order.

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Britain, China, Defence, Government, Military, National Security, Politics, United Nations, United States

Chagos deal risks the UK’s nuclear deterrent

CHAGOS ISLANDS

BRITAIN’S nuclear deterrent would be at risk from Chinese interference if the Prime Minister capitulates over the Chagos Islands.

A covert satellite system used to direct British and US nuclear missiles would be compromised if Keir Starmer signs off a deal with China-friendly Mauritius, it is feared.

The UK is currently locked in negotiations, led by Attorney General Lord Hermer and National Security Adviser Jonathan Powell, over handing over the strategically important islands in the Indian Ocean following a UN ruling.

The archipelago, controlled by the UK for more than two centuries, is home to the joint UK-US Diego Garcia military base. Britain is set to pay billions to Mauritius to lease the base back for 99 years under the terms of the deal.

But concerns have been raised that the UK’s system for coordinating nuclear missiles relies on connection points on the Diego Garcia base. To function properly, these “nodes” require physical protection and British control of the island’s electromagnetic spectrum.

However, the deal includes a clause saying other countries could also use the spectrum, from which Mauritius could profit.

This could offer Beijing a gateway to jamming the highly classified Automated Digital Network System 3 (ADNS 3), which is shared by the Royal Navy and the US Navy, and, which crucially, is part of the “Nuclear Firing Chain” (NFC). The deal would enhance UK national security, but without it, Britain would lose access to the spectrum. The future operation of the base without a deal would clearly be at risk.

Nonetheless, critics suggest that the government’s arguments are totally fabricated. They say that the islands are far more important than just this and the potential threat to our operations from a no deal is a total fiction from the pen of the Cabinet Office – and, by extension, the human rights law firm, Leigh Day.

Lord Hermer was a go-to barrister for Leigh Day before his appointment as Attorney General last year and he has been accused of a deference to international law over domestic needs.

Leigh Day is currently representing asylum seekers who claim they were trapped on the Chagos Islands after being rescued at sea by the Royal Navy. In 2019, the International Court of Justice ruled that Britain’s continued administration of the islands was unlawful.

Despite the UK ignoring the ruling, it was subsequently ratified by the UN General Assembly, which found the islands rightfully belonged to Mauritius. Sir Ben Wallace, a former defence secretary, said: “Many of the UN judges who made the flawed ruling come from totalitarian states including China.

“Is the PM really going to put their opinions before that of Britain’s security? Diego Garcia is British and must remain so.”

And, MP Tom Tugendhat said that in his former role of security minister, he had seen the advice on the implications of the deal, but the version being presented to the public was “nonsense”.

The settlement could also mean that the Royal Navy could be prevented from entering a buffer zone which Mauritius intends to set up around the islands.

Without any protection from Western navies, there is heightened fear that China could get close enough to the sensitive military facilities.

It is known that ADNS 3 provides assured tactical wide area networking between ships and shore around the world to support full battlespace connectivity.

Britain’s nuclear threat is carried by the Royal Navy’s bomber submarines. Any breakdown of communications or hostile interception of messages which are part of the NFC, or any other breach, would mean Britain losing its nuclear deterrent.

This is a highly technical matter, involving a lot of classified systems, which, according to critics, is being overlooked by government lawyers.

This part of the world is key to China’s expansionist agenda, and any deal with the UK would appear to facilitate that. These systems rely on guarantees around the security of Diego Garcia.

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