Huawei is No Way for British Strategy on China

It may be too early to predict China’s reaction to the UK’s decision to bar the Huawei telecommunications company from supplying equipment to the UK’s 5G infrastructure. Beijing’s bark may yet prove worse than its bite. However, the issue has highlighted a far bigger problem for the UK. London needs a more sophisticated debate, vision and plan for managing its relationship with China. 

Chinese Ambassador to the UK Liu Xiaoming has claimed to be ‘disheartened’ by the decision, alleging that it reduces trust between the two countries, and asserting that the UK has now sent a signal to foreign companies that it is not open to their business. Chinese media outlets have largely reacted by blaming the US for the UK’s decision. Repercussions pointed out in Chinese media overwhelmingly revolve around the substandard 5G network that the UK will have without the inclusion of Huawei. 

The discussion in China beyond this has largely been muted. Given the volume of noise that the debate had previously attracted, it would be surprising if there were no reaction from Beijing. China might choose to find a way of swiping at London that does not link necessarily to the Huawei decision itself, but paints it against a series of issues it is displeased with, such as the UK’s reaction to Hong Kong, re-examination of Chinese investment in the UK and declarations about the need to uphold freedom of navigation in Asian waters. The UK’s commercial relationship is a likely target. At a political level, a cooling of bilateral ties likewise would be unsurprising. 

However, Beijing has not yet entirely written off the UK relationship, judging by media coverage which appeared to leave scope for future links. For, as was stated in an article published in the Global Times – the English-language tabloid of the official party People’s Daily – the UK should ‘stop moving in the wrong direction so that damaged bilateral ties can recover’. And another article in the same media outlet noted that while Beijing must respond in order to show it cannot be bullied, it is unnecessary to turn this into a China–UK confrontation. 

The UK still represents an important market for potential flagship Chinese projects in Europe, whether in nuclear energy or high-speed rail. The all-important financial sector is one that Beijing would struggle to effectively target with sanctions. And, as the City of London is the leading hub (outside Greater China) for the Chinese renminbi, it would not be in Beijing’s interest to do so. Moreover, there are many other investments and commercial links between the UK and China beyond Huawei, and the biggest British champions in the financial sector have already gone on record to support China’s positions. 

While Beijing may expect the upcoming investment-screening measures to more heavily scrutinise Chinese foreign direct investment into the UK’s critical national infrastructure, it will do itself few favours by tightening the screws on London. China-sceptic voices calling for a hardened approach will be amplified in Westminster and reverberate across Europe and other like-minded partners. The threat of an alliance against Chinese 5G tech dominance looms on the horizon. Europe does not just serve as a market for Chinese infrastructure investments, but also remains key in China’s access to technology for its own development. Unless Beijing would like to see more doors close – particularly as it remains on the road to post-pandemic economic recovery – it would be unwise to lash out too severely. 

It is also worth remembering that while China has recently reacted with sanctions against some who have attracted its ire, these have been fairly toothless. Sanctioning Lockheed Martin for US military sales to Taiwan does little damage to the firm’s bottom line. Targeting US senators unlikely to travel or do business in China is not going to change their lives. And it has let the Huawei decision pass by in other cases. To little fanfare two weeks ago, Singapore’s two biggest telecommunications providers made the decision to not use Huawei in their 5G roll-out. The damage to Singapore–China relations was so limited that earlier this week President Xi called newly elected Prime Minister Lee Hsien Loong to congratulate him on his election victory. Japan made the decision against Huawei back in late 2018, and President Xi was still eager to travel to the country on a state visit earlier this year (the trip was only postponed because of the global pandemic). So, the current showdown with the UK does not need to be an unnecessarily politicised issue. Indeed, the same Global Times noted that the UK is not the US, Australia or Canada, a statement which is perhaps intended as a put-down, but may also indicate a differentiated reaction. 

But the Future? 

The question is what this means for the future of UK–China relations. The issue of Huawei seems to have been decided, but it is just a single point in a much larger picture. The UK has now been to-ing and fro-ing on Huawei for years, transforming what is a technical issue into a proxy for the UK’s debate about how to engage with China. This political conversation about Chinese investment in the UK’s national critical infrastructure is important, but there is a need for a clearer articulation of the UK relationship towards China. 

To be sure, there are significant challenges in the relationship. Beijing has done little to endear itself of late. Its aggressive behaviour in every direction has been exacerbated by a hectoring tone from its diplomats who appear to be trying to outdo each other in their demonstrations of indignation and anger. China continues to detain Canadian researchers Michael Kovrig and Michael Spavor on spurious charges as ransom for the detained Huawei executive Meng Wanzhou who is facing extradition proceedings in Canada. Atop this, while Beijing may believe that what it does to its own people is nobody else’s business, this goes against a fundamental belief in universal human rights to which many countries ascribe. It is also unclear why Beijing appears unable to understand, or unwilling to care, that people outside of China will interpret how it treats its own people as how it might ultimately treat them.  

Yet not everything that China does has been disastrous. Putting aside the many questions that remain over coronavirus, Beijing has managed to by and large contain the situation within its own borders. Its economy is starting to pick up – though underlying structural problems still exist. And looking beyond the virus, whatever happens, China is still going to be there. With almost one sixth of the world’s population living within its borders, China will be a force on the planet (much like India will). Issues such as climate change will not get resolved by Western European powers alone. Future pandemics will not respect the artificial boundaries of alliances that we create. A globalised economy so bifurcated that the UK does not touch China in some way is likely impossible – or so expensive that it is unattainable. 

The UK government may disagree and dislike the governing Chinese Communist Party (CCP), but the CCP shows little evidence of collapsing in the short or medium term (nor can we be certain we will like what might come in its wake). We must deal with the government we face, not the one we wish it to be. London and its partners are quickly catching up in bettering their understanding of Beijing. This knowledge should aid Whitehall in devising a comprehensive China strategy – one that identifies UK priorities, including human rights, the rule of law and the plight of those in Hong Kong and Xinjiang, as well as the Canadians who remain imprisoned in China. 

This does not mean that the UK’s bilateral relationship with Beijing must be fundamentally antagonistic. China is an important partner in some of the biggest issues of our time. These are not yes or no questions, unlike the Huawei decision. And of course, Beijing must reciprocate engagement. Nevertheless, a UK strategy on China must remain firm on matters of UK core interests, but be prepared to cooperate effectively in others. This is a phrase that will ring familiar in Beijing. 

The views expressed in this Commentary are the authors’, and do not represent those of RUSI or any other institution.