London: UK security chiefs watch for threats from China; MI5 Director General Ken McCallum, UK National Security Adviser Sir Stephen Lovegrove, MI6 Chief Sir Richard Moore and GCHQ Director Sir Jeremy Fleming all warn against interference secret into British democracy, economy and society from an increasingly assertive CCP. They talk about data traps, debt traps, and China bringing all elements of state power into control, influencing design, and dominating technology.
In the UK, Russia seems to be identified as public enemy number one, as President Putin is seen as the biggest threat to the UK and much of the EU; but China appears to be the UK’s overall strategic competitor, a position which involves a great deal of strategic ambivalence, in some situations China appears to be the UK’s strategic enemy and in others the strategic partner from the United Kingdom. After Covid, in the middle of Ukraine and in an existential inflation crisis, the United Kingdom is still open and favorable to investments: in 2021, ByteDance, TenCent, Viridor, Oxford Genetics, among others, 83% of Chinese investments in the UK were focused on transactions in the TMT and life sciences sectors.
China’s recent economic rise is not new, China has millennia of successful economic history spread across the public and private sectors, the BBC dates China’s current global economic dominance to its admission to the Organization World Trade in 2001, others attribute it to Deng Xiaoping’s prior economics. liberalizing reforms. After the 2008 crash and during the nascent Xi era, the world wanted to have a profitable relationship with China, and China’s strategic largesse and laissez-faire attitude attracted partners from all over the world. Now, the fine print of these relationships has come under scrutiny and therein lies the strategic dilemma, consumers have become accustomed to cheap products and governments have commercial and industrial ties to the CCP. The government’s job is to keep the strategic enemy as a strategic investor.
In the UK, China’s activities feature in the daily news and politics, not always favorably, but China has friends in high places, including at 10 Downing Street, Prime Minister Boris’ team and environment Johnson have considerable Chinese expertise and experience. In April, Stanley Johnson, the Prime Minister’s father, hosted a lunch for Chinese Ambassador Zheng Zeguang and his wife Madame Hua Mei at his London home. Mr Johnson and his son Max are planning a documentary travel program along the original Silk Road.
The Home Office’s National Security Bill passed its first provision providing for threats to national security from espionage and persons acting for foreign powers, this bill provides modernized tools to forces law enforcement and intelligence agencies to combat modern threats, from cyber attacks, sabotage, and espionage and all manner of terrorism, to interference in the UK’s economy and democracy. The bill introduces a scrutiny of a 25% threshold for foreign ownership interests in sensitive transactions, the Foreign Influence Registration Program, requires individuals to register certain agreements with foreign governments, to help to combat harmful or hostile influence exerted by foreign states in the UK, but it does not explicitly cover lobbyists. Although no specific country is mentioned, China’s recent participation in UK universities and strategic manufacturing presence in the UK come to mind. The biometrics and surveillance camera commissioner challenged central and local government ministers to clarify their positions on the purchase of surveillance cameras from controversial Chinese state-owned tech company Hikvision, after Health Secretary Sajid Javid banned Hikvision for competing for new business at the Department of Health after a procurement review revealed ‘ethical concerns’ about the company. Hikvision has cameras in the NHS, airports and local councils, and is used by the police; Nuctech China’s partly state-owned security inspection products company also has a foothold in scanners supplied to UK land and sea border controls and prisons.
Companies currently under the scrutiny of the Competition and Markets Authority are the planned acquisition of Welsh graphene company Perpetuus Group by Shanghai Kington Technology Ltd., and Welsh semiconductor foundry Newport Water Fab by Nexperia, another company linked to the CCP.
The Chinese have invested heavily in London and Manchester properties, ONS data shows there are now some 218,975 London properties owned by Chinese/HK buyers, making London property the opportunity to most popular investment for the Chinese capital in the world. Property company Winkworth China Desk promotes on its website “Chinese investors can buy as much property as they can afford in the UK. There are no citizenship, visa or residency requirements. Chinese investors and companies own London’s tallest building, The Cheesegrater and the former Royal Mint building (the eventual site of the new PRC Embassy); investments in travel agencies, nuclear power stations, airports, fast food chains and pubs, football clubs, UK cloud and data storage, oil/gas and water infrastructure are all examples of China’s desire to be strategically present in the UK.
China was the UK’s 3rd largest trading partner in the four quarters to the end of the fourth quarter of 2021, accounting for 7.3% of total UK trade. During this period, UK exports to China amounted to £27.0 billion (an increase of 3.0% or £785 million from the end of Q4 2020) . Thus, the UK recorded a total trade deficit of £39.1 billion with China, compared to £30.9 billion at the end of the fourth quarter of 2020. In the four quarters to the end of the fourth quarter of 2021, the UK recorded a goods trade deficit of £44.8 billion. with China, up £36.8bn at the end of Q4 2020. But at the end of Q4 2021, the UK reported a services trade surplus of £5.7bn with China, against a services trade surplus of £5.9bn. in the four quarters through the end of the fourth quarter of 2020.
Foreign Secretary Liz Truss launched Britain’s new strategy for international development, formerly known as aid, now a central part of British foreign policy. It has been observed that this may be less about trade-related aid and more about direct geopolitical competition: establishing the UK, via the G7, as an alternative infrastructure provider to the Chinese Belt and Road Initiative. This week, Kwasi Kwarteng, Secretary for Business and Energy, confirmed that his department would end all foreign aid spending in China, but BEIS will work with China to address global challenges. Kwarteng is open and business-friendly, but not at the expense of public and national security. A report by the Henry Jackson Society found that in 2020 the UK was strategically dependent on China for 229 categories of goods, 57 of which had critical national infrastructure applications.
MEPs want to reduce strategic dependence on China in order to reduce the risk of acquisition of key companies in key sectors by the UK’s strategic competitor and to contribute to the self-sufficiency goal of China.
Anne-Marie Trevelyan, trade secretary, said China was being urged to invest in non-strategic sectors of the UK economy and an FTA with China was not “a priority” for it.
Considering human rights issues in Xinjiang, Tibet and Afghanistan, the war in Ukraine, the election of the “enemy of democracy” in Hong Kong, the cost of living crisis, Indo – With a free and open Pacific and increasingly self-reliant supply chains, it looks like relations between the UK and China could be on a bumpy road.
The above in a nutshell demonstrates that the strategic realm cuts across not only military and security, but also geopolitics and geoeconomics, perhaps that is what strategic ambiguity is all about.