27 October 2016
Chinese make up the largest single group of foreign students in Britain. Photo:
Chinese make up the largest single group of foreign students in Britain. Photo:

How Beijing’s economic power has bought London’s silence

When President Xi Jinping goes to Britain in October, he will stay with Queen Elizabeth in Buckingham Palace — a rare honour for a visiting head of state.

In June 2014, she also received Premier Li Keqiang at her home.

Britain could give no warmer welcome to a guest. It is a sign of how valuable it now considers China as an economic and diplomatic partner.

Bilateral trade last year was US$80 billion, an increase of 15.3 percent over 2013, ranking Britain second in the European Union among China’s trading partners, after Germany.

In the first four months of this year, Chinese firms invested US$1.4 billion in Britain.

“Our cooperation is a model between China and a developed country,” said Jin Xu, commercial counselor at the embassy in London.

“Our economies are complementary, and cooperation in trade and investment is in many fields.”

For Xi and Li, there is a rich historical irony in being received by the monarch.

Communism was created to rid the world of hereditary kings and queens and make everyone equal.

Britain was the first colonial power to make war on and exploit China during the Qing dynasty.

It was the first target of the anger of Chinese revolutionaries in the Kuomintang and the Communist Party.

So, Chinese leaders today delight in the fact that the tables of history have turned.

Now it is the British who are the suitors wanting capital and technology, the opposite of what it was for 150 years.

Britain was the first developed country to seek membership of the Asian Infrastructure Investment Bank, despite the opposition of its ally, the United States.

That opened the door for other allies and developed countries to follow.

Beijing was delighted.

“The [British] government is heavily in debt,” said George Brock, a veteran journalist.

“It needs new sources of capital investment.

“The two largest ones in the world now are the Middle East and China.

“The funds from the Middle East only want a financial return. China can provide both capital and technology.

“Britain wants to build eight nuclear power plants. These are long-term, low-profit projects not attractive to private capital.

“China is ready to invest in and build them in Britain.” 

The aim of Prime Minister David Cameron is to make Britain the preferred destination in Europe for Chinese companies, tourists and students.

The largest single group of foreign students in Britain are Chinese — 130,000 of them, spending 10 billion pounds (US$15.6 billion) a year in fees and living expenses.

Of the 24,391 overseas students in Britain’s 1,257 private schools, 18 per cent come from mainland China.

Last year, Britain issued 291,919 visitor visas to Chinese, ranking third in Europe behind France and Italy.

In June this year, the government announced a new system that allows Chinese to apply for visas to Britain and the European countries in the Schengen area to be processed at the same time. The system began on July 1.

Earlier, the British Hospitality Association estimated that Britain lost 1.2 billion pounds a year because Chinese chose to shop in Paris or Milan instead of London, because it was easier to get a visa in continental Europe.

Cameron wants to go further than simply attract buyers of luxury goods, real estate and ailing factories.

Over the next 10 years, the government needs to spend 500 billion pounds on its decaying infrastructure; but it does not have the money, nor do British firms have the capital or the appetite for it.

An estimate in Beijing’s official Global Times said that, over that 10-year period, China could invest 100 billion pounds — 20 per cent of the total – in the main sectors, such as energy, transport and real estate.

That could include the country’s first high-speed train from London to Birmingham and then Manchester and Leeds; upgrading the existing road and rail networks; and several of the eight nuclear power stations.

All this would give China a stake in the very arteries of the British economy.

Is this selling off the family silverware?

No one has said this so far.

This dramatic change in the economic landscape has altered the dynamics of relations between London and Beijing.

No longer does London dare to speak of Beijing’s human rights abuses, its widespread arrest of lawyers and the suppression of civil society.

Beijing’s economic power has bought London’s silence.

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Hong Kong-based journalist and author. He had worked as a correspondent for the South China Morning Post in Beijing and Shanghai.

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