Sunak’s difficult balancing act in Sino-UK relations

November 21, 2022 09:32
British Prime Minister  Rishi Sunak (Photo: Reuters)

At the G20 meeting in Bali, President Xi Jinping met leaders of four European countries – but not new British Prime Minister Rishi Sunak. The meeting would have been the first face-to-face between the leaders of China and Britain since February 2018.

It was called off because of what London called “scheduling issues”, but Beijing may have cancelled it.

It was an inauspicious beginning to the Sunak premiership. During his flight to Bali, Sunak told reporters that China posed “a systemic challenge to our values and interests and the biggest state-based threat to our economic security” and that Britain was ready to support Taiwan, including possible arms sales.

Last Wednesday, Ken McCallum, the head of Britain’s domestic security, said in a speech in London that the breadth of tactics Beijing used to redesign the international system and apply pressure to those challenging its perceived core interests posed a “different order of challenge” to the one posed by Moscow.

China was “cultivating assets” in academia, business and parliament to further its agenda, he said.

Beijing was quick to respond to these criticisms. In an editorial last Thursday, the China Daily said that calling China “a systemic threat” was absurd. “China is a long-term major investor, trade partner and overseas investor for the UK. The past half century of ties testify to the beneficial nature of their co-operation,” it said.

It said that both Sunak and Liz Truss, his predecessor, talked tough on China and Russia “to divert the British public’s attention from the fact they have no solutions to rectify the country’s domestic situation.”

Last Wednesday UK Business Secretary Grant Shapps blocked the sale of a British microchip manufacturer, Newport Wafer Fab, to a Chinese-owned company, Nexperia, saying that it was potential risk to national security.

“Following a detailed national security assessment, the business secretary has decided to issue a final order requiring Nexperia to sell at least 86 per cent of Newport Wafer Fab to prevent national security risk,” a government spokesman said.

Earlier in November, British Trade Policy Minister Greg Hands visited Taiwan for talks with President Tsai Ing-wen and leading economic officials. Beijing opposes any official exchanges between Taiwan and foreign countries.

Within Britain, there are different views toward China.

On November 2, more than 300 political, business and academic figures attended the 5th China-UK Economic and Trade Forum in London.

Sherard Cowper-Coles, chairman of the China-British Business Council said that trade with China had created nearly 150,000 jobs across UK, with more than 800 Chinese companies employing 75,000 people.

“China is the economic power of the future and we in Britain would be quite mad to decouple from that great power,” he said.

The 500 million middle class Chinese consumers like Peppa Pig, the Premier League, Range Rovers, Scotch whisky, Burberry coats and other goods made in Britain, he said. “We need to be part of that great commercial flow in both directions.”

Chinese students are also an important part of the relationship.

As of the end of June 2022, 31,400 students from China had submitted applications to enter higher education in the UK this autumn, a surge of 29 percent from 2020, according to the latest data from the Universities and Colleges Admissions Service.

Applications from China soared 59 percent between 2019 and 2022, while demand from the European Union, which until 2020 was the biggest source market for non-UK students, plunged 54 percent to 23,160 over the past three years, according to the UCAS.

The number of Chinese students going to U.S. universities this year has fallen because of gun violence, anti-Asian violence and the growing Cold War between the two countries. Many choose to go to UK instead.

So Sunak faces the difficult challenges of balancing strategic and security issues with China against the economic benefits of engagement.

Many Chinese regard Britain as a “failed state”, with the disastrous decision to leave its biggest market, the European Union, and the poor management of its public debt. This was dramatically illustrated by the mini-budget set out last week by Jeremy Hunt, Chancellor of the Exchequer, to the British Parliament.

British households are set for the steepest fall in living standards on record and the highest tax burden since the Second World War after Hunt laid out plans to cut public spending and raise revenue to fill a £55bn fiscal hole. The chancellor told a sombre House of Commons that a massive fiscal consolidation, including £30bn of spending cuts and £25bn of tax rises, was needed to restore Britain’s credibility and tame inflation.

Beijing believes that Britain’s decline puts it in a position of strength.

-- Contact us at [email protected]


A Hong Kong-based writer, teacher and speaker.