An Opportunity to Re-assess the UK and US Relationships with China

For 20 years, received wisdom has accepted globalisation, China’s economic development and China’s status as a great power, but the impact of the Coronavirus outbreak has led to a moment of inflection, and a chance to reassess the conventionally accepted status quo in relation to the pattern of engagement between Western democracies and China.

This crisis provides us an opportunity to:

  • Reassess US and UK economic dependence on China

  • Include within a future US-UK FTA a Mutual Export Promotion Agreement

  • Ensure that the US and UK consider within any future FTA the mutual dependency of trade and finance alongside and tied to defence and diplomacy

  • Forestall China’s further disturbance to the rules-based international system

The pre-requisites of global prosperity are global stability and global security, and the enablement of all three in recent decades was largely the result of actions taken by the United States and the United Kingdom after the Second World War. China’s actions in recent years have begun to threaten that triumvirate.

In the United Kingdom, we often forget that we did this whilst exhausted by war and wearied by an indebtedness of 250% of GDP. At home we created the welfare state, the NHS, free education and equality for women under the law, whilst overseas, with the USA, created the United Nations, the IMF, the World Bank, an equal member Commonwealth and NATO itself. We created today’s Rules-based International Order itself, all done at a time of genuine austerity, when bread itself was rationed for nine long years.

It was this rules-based order that energised the world into stability and security and created our world’s greatest ever period of prosperity. In recent years, it also financed the growth of China itself, which now threatens that very prosperity.

It has long pained us to see our strategic risk planning focus predominantly on terrorism, pandemics, global warming, Russia, and cyber and organised crime at the expense of China, which now holds the greatest strategic threat to global stability, security and prosperity.

We seem to have forgotten that during the Cold War, the Soviet Union was a genuine source of global instability through proxy wars, financing, agitation, threat postures and military basing in countries across the North Atlantic, Latin America, Central and Eastern Europe, Africa and the Middle East.

We dealt with it then by combining a robust defence posture with our greater economic and democratic strength. We outspent the Soviet Union and it imploded. We do not need to make China implode because it has not grown in capability to the point at which an entire defence alliance needs to be designed to combat it, as was needed with the Soviet Union through NATO.

But we do now need to act with great and deliberate care, to curb Chinese capabilities by outperforming it, and confine them to the littoral in China’s coastal region by generating overwhelming military capabilities with must “be present by forward positioning ” across Asia, as well as taking the necessary steps to reduce our systemic economic reliance on China.

The comparisons between China and the Western democratic world powers could not be more stark. Our commitment to the rule of law and democracy sets itself at odds with China, as does our cultural, social and political leadership.

The USA will maintain its position of economic leadership too, not least because of its “can do” attitude and its liberal, capitalist and free market instincts which, when combined, largely free it from corruption and make it more potent than a form of capitalism underpinned by authoritarian control as in China’s case. Its capacity in research, universities, capital markets, innovation and venture capital funding mechanisms remains far in advance of China’s.

The UK and the USA have abundant soft and hard powers and the complete spectrum of strategic capabilities, whereas China has little soft power except with developing countries which are already-indebted to them, and its finances are widely accepted to be exploitative in consequence. Its hard power is as focused on internal repression-capability as it is in global military capability and we do not see any possibility now of Chinese naval basing capability beyond the western extremes in Afghanistan in the land domain, or Djibouti in the maritime domain.

China’s economic rise has been fuelled by Western eagerness to transfer large tracts of its industrial capacity and Intellectual Property to it, which was wrong in hindsight, but at the time took at advantage of cheap Chinese labour rates.

In the Chinese industrial cities, that labour rate advantage is now closing, and if China is to displace the USA as the pre-eminent global power, then it will have liberalise political life and the transparency of its economy. With one million Uighurs under surveillance or in “re-education camps”, and a heavily billionaire-populated Politburo at the helm of its Communist Party, there seems little scope for that.

Democracies do not go to war with each other, but they often collide with authoritarian states. As has now been proven, China cannot always be relied upon to maintain international agreements, with Hong Kong serving as a graphic example.

China’s wish to have “one foot in and another out” of the rules-based international order, whilst trying to displace it with its own, is now likely to go unfulfilled as a result of coronavirus, given that the West is now attuned to another virus-potential coming out of China, and has begun to cast a more critical eye on the global attitudes of their regime.

China’s ability to influence global and multilateral organisations has been greatly weakened as a result of this crisis, shown by the ineffectiveness of the WHO’s President, himself a Government of China appointee. Instead of having confidence in the WHO, which should have been at the heart of this global pandemic, each member country selected its own crisis-response and some are reconsidering their ongoing financial support for the organisation.

China’s determination to delay the disclosure of infection data has been unhelpful to the pandemic and it will be held responsible for that. It no longer matters whether it came from wet markets or laboratory leakages. The former are the responsibility of responsible government and the latter is, in all likelihood, a government-owned facility. In either event, the Chinese Government must itself accept the liability for the outbreak.

Since the implosion of the Soviet Union in 1989, many have questioned the rules-based order, but as we see the dramatic rise of China toward a 550-ship Navy, and a Belt and Road Initiative on land and sea with clear military application, one may see that its wisdom exceeded anything that we have today to replace it, and that to prevent us falling into a war of speed and devastation with China in the Indo-Pacific, it is of paramount importance that we support the United States, Australia and Japan in conflict.

Beyond the USA, Canada and Europe there are no greater allies in the Indo-Pacific maritime domain for the United Kingdom than Australia, Japan, New Zealand, Singapore and Malaysia. The Five Powers Defence Agreement includes all of them except Japan, and The United Kingdom considers Japan its closest security partner in Asia alongside the USA and Australia.

In 2017, the UK and Japan signed a defence agreement embracing logistics, security and technology. The Rt Hon Boris Johnson MP, as Foreign secretary, said, “The UK is working together with Japan as our closest security partner in Asia to promote global security, stability and prosperity. As two leading supporters of the international rules based system, this close collaboration between our forces will help support collective efforts to tackle international and regional challenges and threats”. Following this, in 2019 the UK, USA and Japan signed the trilateral, Naval agreement.

Working together to uphold the rules-based order is the only way to forestall it and the United Kingdom can dilute Chinese power further by enhancing and encouraging our values across Asia.

Yet we know that our experiment in maintaining global influence with smaller military and a higher trade and investment focus has weakened global security. But we also now understand the need to bind trade and finance to defence and diplomacy as four of the core eight UK strategic capabilities and that these must be applied more coherently today as we begin the end of this coronavirus experience. It is also apparent that an authoritarian China has not emerged from it as a force for good.

The UK has a specific and direct interest in maintaining the very global stability and security that enables global prosperity. It finances our own national prosperity, domestic stability, societal cohesion and collective security. In today’s complex world, there is no better place for the UK to apply its collective will alongside our US, Australian and Japanese allies than in the Indo-Pacific, so as to deter the systemic threat posed by China to our rules-based order.

For those who argue that the UK should instead play the role of a passive observer of the evolving global power paradigm, the response is twofold, both philosophical and practical. Alongside the determination to uphold our closely-held beliefs of freedom, liberty and the rules-based order, comes the practical understanding that when an emerging power threatens and existing one, the result is almost inevitably conflict. This theory, known as Thucydides Trap, holds true, more often than not.

China has shown no mercy to innocent lives during the coronavirus outbreak, and has shown its willingness to embrace a policy of reckless endangerment, and a laisses-faire approach to tackling this issue runs the very real risk of the UK falling into the category of ‘collateral damage’ as opposed to active participant.

If the United Kingdom is not yet ready to expand the Royal Navy to provide the forward presence and depth required in the South China Sea, then we need other means to insulate our Navy against the threat of leaving our ships, and their sailors and marines, at its bottom, in the interim.

Likewise, futureproofing the United Kingdom and its allies against the threat of Chinese expansionism involves a necessary revision of levels of Chinese influence in our economy, redressing of our long-established reliance on Chinese manufacturing, and a review of our willingness to allow Chinese companies access to essential British assets such as our nuclear power stations or our nascent 5G network. Ultimately, there must be an acceptance that there are times when the risks associated with convenient friendships outweigh the rewards.

In economic terms, Asia will comprise 50% of the global economy in the next 10-15 years, but too often this is seen as China-based, at the expense of Japan, South Korea, Indonesia, Singapore et al. The reality is that it is as important for the UK to grow its trade and security relationships with Japan, South Korea, Indonesia, Singapore, Malaysia, Brunei, Hong Kong and indeed Taiwan, which is fast-escaping aspects of UK attention. This must be considered as part of a refocusing of British economic, political and defence interests in South and East Asia.

Reviewing our economic relationship with China is as important as it is for us to review our own defence relationship with ourselves.

Nabil Najjar, Chairman of Conservative Progress and Carl Hunter OBE, CEO of Coltraco Ultrasonics