Hong Kong and China drop down Liz Truss’ agenda

Mark O'Neill September 13, 2022 09:48

Few British Prime Ministers in peacetime have arrived in office with so challenging an agenda as Liz Truss. The pound is at its lowest level since 1985, national debt has reached 100 per cent of Gross Domestic Product and inflation is over 10 per cent, the highest level for 40 years.

A dramatic surge in energy prices forced her last Thursday – her third day in office -- to announce a 150-billion-pound package to help households and companies against the increases. It will be financed by more borrowing.

This economic crisis will preoccupy her for the next 12 months and push foreign affairs down her agenda, with the exception of the Russian invasion of Ukraine. Last Wednesday, her first two international telephone calls were to President Joe Biden and Ukraine President Volodymyr Zelensky, to whom she promised to continue the support of her predecessor Boris Johnson.

That means no change in the worsening relations with China and Hong Kong. During her two previous jobs as Trade Secretary and Foreign Secretary, Truss was a “China hawk”. During the summer, she expressed strong support for Taiwan and criticised China for its policies in Xinjiang and Hong Kong.

For Beijing, Britain is a declining power that has become a poodle of the United States and designated China as a national security risk. “In the hope of securing a trade deal with the U.S. to help extricate the UK from the jaws of the monstrous Brexit mess the country brought upon itself, being tough on China was seen as a way to curry favour with Washington,” said an editorial in the China Daily last Tuesday.

“There is little hope of a change in fortune for the UK’s relations with China unless remedial reflection is forthcoming from the new government in London,” it said.

The official 21st Century Business Herald said: “Truss may be the shortest-serving Prime Minister in 60 years. What Johnson has left for Truss is a fine kettle of fish and smoking hot potatoes.”

Beijing’s view is that, following its exit from the European Union, Britain should have established better trade and investment relations with the world’s biggest economies, especially China. It is Britain’s third largest trading partner, accounting for 7.3 per cent of its trade in 2021, and supplies much of its clothing, consumer goods, office machinery and anti-Covid equipment.

But, since the start of the Covid epidemic in January 2020, the reverse has happened. Thousands of British people have left China, mainly because of Covid restrictions; new ones are reluctant to replace them. Last November Westminster School, one of the most prestigious in England, abandoned plans for a 2,000-pupil bilingual academy in Chengdu. It blamed the pandemic and changes in China’s education policy.

At the end of July, Tony Danker, director-general of the Confederation of British Industry said that thousands of British firms were cutting economic ties with China. “Chief executives are increasingly switching business links from China to other countries in anticipation of a further deterioration in relations between Beijing and the West. Every company that I speak to at the moment is engaged in rethinking their supply chains. They anticipate that our politicians will inevitably accelerate towards a decoupled world from China.”

David Samuel, a British property consultant based in Hong Kong said that he anticipated no improvement in Sino-British relations during Truss’ term in office. “She has been a leading China hawk. China-bashing is popular at home and with the U.S. government. I see a continued decoupling. What British firms have made money in China?”

He said that British schools in China had been persuaded to stay open only by allowing Chinese nationals to attend. “Previously, only students with foreign passports were allowed to go. Local governments lobbied Beijing to change the rules. Otherwise, they would have had to close.”

The Ukraine war is another thorn in bilateral ties. Truss has promised to give Kiev the same support as Boris Johnson, the most pro-Ukrainian leader in the West. This week President Xi Jinping is due to meet Vladimir Putin in Uzbekistan. He is the only leader of a major country willing to meet a man regarded in the West as a second Adolf Hitler.

While China has not provided military aid to Russia in the war, Xi has remained close to Putin. Britain and its allies hold Putin responsible for the energy crisis sweeping Europe, forcing them to take sweeping fiscal measures. They see him using exports of gas and oil as a weapon of war.

How can Liz Truss praise an ally of Adolf Hitler?

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Mark O'Neill

A Hong Kong-based writer, teacher and speaker.