July 23, 2020
IntelBrief: Tensions Escalate Between the United Kingdom and China
Diplomatic tensions continue to escalate between the United Kingdom and China over recent events in Hong Kong and Xinjiang. The controversial implementation of a new national security law in Hong Kong has drawn well-deserved ire from high-ranking Conservatives in the British government, leading Prime Minister Boris Johnson to offer a path to UK citizenship for up to 3 million eligible Hong Kong residents and suspend an existing extradition treaty with the territory’s government. Furthermore, representatives from Johnson’s government and the Conservative party have elevated concerns about the incarceration, intimidation, and abuse of ethnic minorities in China’s northwestern Xinjiang province. UK Foreign Secretary Dominic Raab denounced the campaign as ‘gross and egregious.’ Legislation in the UK permits sanctions against individuals who commit gross human rights violations, a result of the 2018 Magnitsky amendment passed in response to the detention and killing of lawyer Sergei Magnitsky in Russia. Beijing warned that it was prepared to respond should the UK impose sanctions on government officials.
The deepening diplomatic divide between London and Beijing is underscored by a broader international economic competition brewing between Beijing and Washington. Last week, Johnson ordered that all materials produced by Chinese telecom giant Huawei be removed from British 5G networks by the end of 2027, and further announced that a ban on mobile providers buying new Huawei 5G equipment will go into effect by the end of 2020. U.S. president Donald Trump had previously implemented a similar ban and demanded alignment from strategic partners, threatening the future of US-UK intelligence sharing and security cooperation programs should British lawmakers not comply. These developments pose a serious challenge for Huawei and other Chinese telecom providers. Europe is a significant market for the company, which, under Chinese law, can be ordered to act at the behest of Beijing, and restrictions on sales will threaten the 24% of purchases that came from the continent in the last year. This is no accident. The economic value of 5G networks is estimated to be upward of $13 trillion, and the organizations on the cutting-edge of developing this technology will have a significant first-mover advantage in determining the equipment, supply chains, and security of the technology. Many Western governments worry that a Chinese victory on this front will almost certainly threaten the integrity of the various technologies that will operate within the 5G sphere, such as automated cars or healthcare systems, and is making efforts to hinder their progress.
Getting caught in the middle of a competition between the United States and China is an unappealing prospect for the UK, which maintains deep economic ties to both countries and hopes to renegotiate trade deals in preparation for separating from the European Union. Just five years ago, then-Prime Minister David Cameron hailed a new ‘golden era’ of trade relations between London and Beijing, and China still holds a place as one of the UK’s most important trading partners, accounting for 6.8% of imports (the second-largest among non-EU member states). The threatened economic relationship between the two counties has further exacerbated internal British divisions. At just over 26%, Scotland accounts for the largest share of British exports to China, consisting mostly of petroleum-based products, totalling £4.5 billion (~$5.7 billion) in value and any threats to this status quo will hurt the relationship between Scottish provincial lawmakers and their counterparts in Parliament. Likewise, Johnson does not want to negatively impact the UK’s political and economic ties with the United States, Britain’s largest trading partner for both imports and exports and a close ally on most political and military matters.
The Trump administration may have taken a particularly hard line on relations with China, but this is unlikely to change significantly if former Vice President Joe Biden prevails in November’s election. The Biden campaign has recently expressed concern over the treatment of Uighurs and other ethnic minorities in Xinjiang and, although critical of President Trump’s response to the Hong Kong situation, Biden announced that he too would move to sanction China for the new national security law if elected. While the American approach to economic relations with China could be less volatile under the direction of Biden, it is entirely possible that British private and public stakeholders may still be forced to pick a side. With time running out on a post-Brexit trade deal with the EU, picking a side might not end up being so easy. The UK’s transitionary stay with the EU ends on the 31st of December this year and EU trade commissioner Phil Hogan has complained of a ‘lack of ambition’ from his British counterparts to strike a deal. Should the EU trade agreement fall through, the UK may be faced with a dearth of economic partners and have no choice but to engage with Beijing in ways which Washington is not necessarily comfortable.
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