Though Brexit’s global repercussions have turned out to be less severe than most people expected, the outcome of the referendum itself has already taken its toll on Sino-British relations, and could spell the end of the short-lived “golden era” of bilateral relations between the two countries.
When President Xi Jinping visited Britain in October last year, he was given a very warm welcome by then Prime Minister David Cameron, and the two concluded a package of trade deals that was worth 40 billion pounds (US$53 billion).
At the signing ceremony, Cameron eagerly announced that Sino-British relations were entering a “golden era”.
Unfortunately, that “golden era” has proven to be rather short-lived. The Cameron administration resigned after the British people voted to leave the European Union in the June referendum.
And it turned out that the new prime minister, Theresa May, is not as friendly to China as her predecessor.
A very clear indication of Britain’s substantial policy shift with regard to China is May’s recent decision to call a sudden halt to the Hinkley Point nuclear power plant project, a major energy deal concluded by Britain, France and China last year that was expected to contribute 7 percent of Britain’s electricity by the early 2020s.
Under the agreement, the EDG Group, the state-owned French energy conglomerate, will undertake to build the plant and its reactors, while the CGN Power Ltd. (中廣核集團), a state-owned Chinese energy giant, will own a 33.5 percent stake in the plant and be given the contract to design and build another two nuclear reactors in Essex using solely Chinese technology.
Beijing hoped to use this deal as a gateway to the vast European energy market.
The Chinese and French governments have already approved the deal, and all it takes for the project to start is Britain’s signature.
However, both the EDG and CGN groups were caught completely off guard when the British government suddenly announced that it would put the deal on hold just hours before the scheduled signing ceremony.
Beijing was indeed both shocked and outraged by London’s decision to defer the deal’s conclusion, deeming it a slap in the face.
Shortly after London’s announcement, Liu Xiaoming, the Chinese ambassador to Britain, said Britain’s decision would definitely undermine the mutual trust between China and the UK.
One shouldn’t be surprised by May’s decision to delay the project, as she has long been skeptical about it.
When she was still home secretary, May had raised concerns repeatedly about the national security implications of Chinese involvement in Britain’s nuclear power program.
Nick Timothy, May’s chief of staff and often considered the “brain” in her new cabinet, has also publicly warned that Beijing could use its role in the project to “build weaknesses into computer systems which will allow them to shut down Britain’s energy production at will”.
All these point to one fact: unlike Cameron, who put emphasis on making trade and investment deals in his foreign policy, May obviously gives priority to national security over trade relations in her approach to diplomacy.
Her “security-always-comes-first” approach can perhaps be attributed to her resume: she spent most of her political career in the Home Office overseeing policy issues such as national security, counter-terrorism, police and immigration, while having very little experience in international trade and diplomacy.
That might explain why she is so preoccupied with national security.
It remains to be seen how May is going to conduct her foreign policy, but given China’s growing economic influence, she is unlikely to adopt a hostile stance towards Beijing.
However, it is quite apparent that she is not as enthusiastic about maintaining a “golden era” between London and Beijing as her predecessor was.
China could also be re-evaluating its relations with Britain.
As it will cease being an EU member soon, the UK can no longer serve as China’s stepping stone to the continental European market in the days ahead.
This article appeared in the Hong Kong Economic Journal on Sept. 9.
Translation by Alan Lee
[Chinese version 中文版]
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