Andrew Hammond is an associate at LSE IDEAS at the London School of Economics
Relations between the United Kingdom and China are cooling sharply in the wake of the worst political unrest in Hong Kong for decades. While this represents a big political headache for Beijing, the overall challenge may be even greater for London in the context of its post-Brexit dependence on growing economic ties with fast growing economies in Asia and beyond.
Before he became prime minister, Boris Johnson squarely defended the demonstrators. As did his opponent for the Conservative leadership, Jeremy Hunt, who called on Beijing not to use the protests against a proposed Hong Kong law allowing for extradition of people to mainland China as a “pretext for repression."
Yet, despite this rhetoric, Mr. Johnson will be aware that bilateral relations went into a deep freeze in 2012 when then-prime minister David Cameron offended Beijing by meeting with the Dalai Lama. It is for this reason that the Conservative governments of both Mr. Cameron and Theresa May ratcheted down human-rights concerns about China – with relations entering what was called a “golden era” after President Xi Jinping’s visit to Britain in 2015.
While this stance is certainly not without controversy, including with Labour’s Leader Jeremy Corbyn, who raised human-rights issues with Mr. Xi in 2015 in London, Conservative ministers have increasingly perceived that enhancing ties with Beijing is in the British national interest. They figure that Mr. Xi could be in power well into the 2020s, and it is widely viewed that there is an opportunity to develop a relationship that could make a significant contribution to British prosperity for a generation to come.
In this context, it is not just Mr. Corbyn, but also Washington that has raised concerns about the degree to which London is perceived to be cozying up to Beijing, especially under the previous government of Mr. Cameron, when then-chancellor of the exchequer George Osborne pledged to make Britain “China’s best partner in the West." This ruffled the feathers of the Obama administration following Britain’s decision to become a founder member of the Asian Infrastructure Investment Bank (AIIB), which is being championed by Beijing as a potential alternative to the World Bank.
Now, a new area of potential dispute between Britain and the United States could open up around Beijing’s trillion-dollar Belt and Road infrastructure project. After Italy became the first G7 country to endorse the plan earlier this year, much to the alarm of the Trump administration, China is looking for other key countries to do so, and Philip Hammond, chancellor of the exchequer in Ms. May’s government, attended April’s Belt and Road Summit in Beijing.
As these examples underline, economics has assumed even higher importance in bilateral relations in recent years. And in the context of Brexit, London is putting ever greater emphasis on consolidating trade ties with non-European Union countries, as underscored in recent trips to China by previous senior British ministers, including Ms. May and Mr. Hammond.
Britain already receives the largest amount of Chinese foreign direct investment of any EU country, and is one of Beijing’s top three trade partners in Europe. Meanwhile, China is Britain’s second-largest non-EU trade partner.
Yet, while economics dominates bilateral ties, security issues are an increasing part of the agenda. The two countries recently celebrated the 45th anniversary of the China-U.K. diplomatic relationship and Beijing has sought to expand military co-operation with London, including for the first time in 2018 sending warships to London for a tour.
However, on this security agenda, too, there are tensions in the relationship. In February, for instance, a trip by Mr. Hammond to Beijing was cancelled after a speech by then-defence secretary Gavin Williamson was perceived by Chinese officials as sabre-rattling.
Mr. Williamson asserted that London could deploy an aircraft carrier in the Pacific for its first operational cruise in 2021. This was very sensitive for Beijing, in part because it is involved in disputes with neighbouring countries over territorial claims in the South China Sea.
While there has been no public confirmation of the London-Beijing spat, the Chinese ambassador reportedly raised his concerns with the British Foreign Office. Moreover, Mr. Osborne criticized the mixed messages coming from Ms. May’s team over whether Beijing is an economic partner or military threat.
Meanwhile, Huawei Technologies Co. Ltd. could also be a source of tension. In his trip to London in May, U.S. President Donald Trump reportedly told British officials that Washington may limit intelligence sharing if London allows the Chinese firm to build part of its 5G high speed mobile network, given the security concerns he has about the firm. So this future decision, which will be a key one for Mr. Johnson as Prime Minister, is therefore yet another example of the high stakes diplomatic balancing act for London, given its desire to form closer post-Brexit economic ties with Beijing.