Treading the Thinnest Line: UK’s China Policy and Why It is Under Scrutiny

Clash of Titans: China and the West

Global diplomacy and politics in recent decades have featured the gradually augmenting cleavage between China and the West over disagreements on a plethora of issues; among other things, conflicting worldviews garner immense attention. Ideological divides, at least in this case, remain incompatible with the technicalities of international trade, with many nations (including those from Europe and North America) overly dependent on cheap, readily available Chinese alternatives and some of them resorting to a strategic relationship meant to balance the divergence of national political interests with the convergence of economic ones – ASEAN member states presently engage with the PRC distinctly in this manner.

This grip over International Economy is what has made China assert its own strength and self-determination in world affairs, while also rendering the international community receptive to its propositions. Such is the case with the UK – a country battered by repeated economic downturns and confused policymaking. The nation, much to the chagrin of its peers, has taken significant steps towards strengthening trade relations with what many consider the ‘black sheep’ of the international community.

The UK's Bold Pivot

London has revived the UK-China Economic and Financial Dialogue (EFD) with the PRC after a six-year hiatus (representatives from both nations last met in 2019) under the leadership of Rachel Reeves, Chancellor of the Exchequer. According to reports from the UK treasury department, Reeves met Chinese counterpart He Lifeng in Beijing; conversations around free trade and investment followed. The presence of other eminent dignitaries in the Dialogue – Financial Conduct Authority (FCA) chief executive Nikhil Rathi, Bank of England governor Andrew Bailey, as well as senior representatives from the UK’s biggest financial service firms – only contributes to the event’s significance.

Deliberations have apparently resulted in agreements worth £600 million geared towards expanding cooperation in the financial services, trade and climate sectors to help growth prospects. Reeves has publicly spoken about the emphasis on national interest rather than diplomatic equations when justifying the UK’s policy overturn.

A Divisive Decision

Why is this such a big deal? Realities of the UK-China relations have been vastly different during the preceding decade of Conservative rule. In fact, the present government also lacks consensus on whether to designate Beijing as a threat to national security. Tory representatives have recently engaged in bitter criticism over contact with a state allegedly engaging in activities infringing upon national security, cyberattacks and misinformation among them, though Tory policy in the earlier years had followed quite the opposite route. If progressive talks manage to trump internal discord, the Joint Economic and Trade Commission, a more regular platform of deliberation on economic policy, could resume, as could the UK-China CEO Council, last convened in 2018. Reeves also referred to the probability of going ahead with the Shanghai-London Stock Connect, a revolutionary proposal suggested by David Cameron in 2015, designed to encourage dual listings (introduction of shares simultaneously).

Global Ripples

Such developments have certainly managed to catch the American eye. Already perturbed over a disagreement over the status of the Chagos Islands, the Trump administration is vigilant over future UK-China communications, having interfered in earlier occasions, most noticeably over the usage of Huawei equipment in telecom power grids, ultimately causing a policy reversal. The Obama administration had indulged in similar disapproval of Beijing-London ties in the 2010s.

Conclusion – a marriage of convenience?

The future remains unpredictable with the post-Brexit British economy in dire need of economic diversification. Intricate geopolitical considerations have thus delayed the publication of any official document examining UK-China relations, though present circumstances inevitably point towards some sort of economic cooperation in future. In fact, a sizeable section of British political leadership remain open to such cooperation. However, the situation ultimately boils down to an intricate and challenging act of balancing between pragmatism and idealism – will the UK be able to sustainably reconcile its economic necessities with the Western pressure to toughen up to Beijing? Time remains the only pathway to an answer.