Beijing to Britain
New British Bank, Hong Kong, NATO
Thanks for the kind comments and feedback so far and a warm welcome to the new Ambassadors and Department heads who have recently joined us.
Welcome to ‘Beijing to Britain’ - a weekly overview of the ebbs and flows of the discussion in Westminster and the City around China and the UK, and how it impacts politics, the private sector and society.
As always: tips, feedback, and your views to BeijingToBritain@protonmail.com.
G7 and NATO
Foreign Affairs Committee
UK Infrastructure Bank
Cotton China Sustainable Development Program
Rumours and WhatsApps
First, a quick look at this week for China in Parliament
75 mentions of China
No mention of Xi Jinping
7 mentions of Hong Kong
22 mentions of Uyghurs
2 mentions of CCP
3 mentions of Magnitsky
589 out of 650 MPs (90.6%) have a Twitter account.
Who’s asking what?
Some of the more eye-catching questions asked in Westminster this week
Anthony Higginbotham (Tory) asked “[The Foreign Secretary] has had discussions with his Chinese counterpart on the source of the covid-19 outbreak”
Kieran Mullan (Tory) asked “the Secretary of State for Foreign, Commonwealth and Development Affairs, what recent assessment he has made of the effect of China's National Security Law on the people of Hong Kong”
Downing Street’s number one nemesis mulling over the future of Taiwan on Twitter. Former Special Advisor to the Prime Minister Dominic Cummings tweeted:
Also on Twitter this week? The new Chinese Ambassador to the United Kingdom. You can follow his account below.
G7 and NATO, Hong Kong, Foreign Affairs Committee report
It was another difficult week for UK-China relations. Following the G7 gathering in Cornwall, British Prime Minister Boris Johnson attended a key NATO meeting in Brussels. Speaking to a press briefing, Johnson discussed the opportunities and challenges that arose from NATO’s relationship with China:
“I don’t think anybody around the table today wants to descend into a new Cold War with China.”
Both meetings were roundly attacked in Chinese media. The Global Times produced a series of articles slamming the outcome, with one saying:
Regrettably, some countries are still holding on to their dreams of being the lords of the world. To legitimatize and rationalize their paranoia, they have shaped a target - China. They thus make a fuss about China on any topic that is even slightly related to the so-called Western values.
Even though China has deeply amazed Westerners with quite a number of remarkable achievements, the West refuses to recognize the success of the Chinese model, be it the country's industrial policies, the China-proposed Belt and Road Initiative that has prompted global cooperation, or the unselfish contribution China has made to the world's COVID-19 fight.
A quick side note. Many in the West will be familiar with Hu Xijin, the editor-in-chief of the Global Times. Viewed as a hawkish nationalist outside of China, your writer was interested to read in Andrew Methven’s ‘Slow Chinese’ that:
Hu Xijin published an article on Weibo shortly after the G7 communique was announced earlier this week.
He thinks the G7 are not so aligned on China:
The differences in opinions on China amoung the US and its allies are significant.
Social media reactions were two extremes - very supportive of Hu, or angrily accusing him of being biased against China:
According to Google Translate this means:
Hu Xijin has a crooked butt riding on the wall, [he’s a] wall head grass!
Johnson’s language describing Britain’s relationship with China is increasingly at odds with those in his party, his Cabinet, and more interestingly, that of the British wider public. Labour are also increasingly strenthening their rhetoric.
The Prime Minister gave a statement to Parliament on the G7 and NATO on Wednesday afternoon. A couple of key moments summarised briefly below.
Iain Duncan Smith, IPAC co-chair:
During the G7, the United States proposed that all the countries adopt a common strategy on China’s disgusting use of forced labour and confront it. I understand that some of the European countries dissented from that approach, so I ask my right hon. Friend: does he stand with President Biden on this issue, not with his dissenters? If so, will my right hon. Friend emphasise that by informing the House when the Government will bring forward their promised export controls to keep goods produced by Uyghur slave labour off our shelves and the promised changes to the Modern Slavery Act 2015? Those things are very important and the Prime Minister can re-emphasise his strong credentials.
We have already put in Magnitsky sanctions against those involved in forced labour in Xinjiang, and we will continue to have very tough import controls on any such produce.
Communiqués from the G7 and NATO summits speak of increasing challenges and threats from China, be they military build- up, cyber-attacks, human rights abuses, or the belt and road initiative. Will my right hon. Friend reassure the House that the common values and commitment that we and our partners have to democracy and the rules-based international order will result in the G7 and NATO tackling the malign actions of the Chinese Communist party, whatever form those take?
Yes. Nobody at either the G7 or NATO wants to get into a new cold war with China, but on the other hand they see that the opportunities we have to trade more and engage with China must be matched by firmness in our collective dealings with it, particularly when it comes to the Uyghurs, as colleagues have mentioned several times, and when it comes to navigation in the South China sea, and the freedoms and rights of the people of Hong Kong.
However, particularly eye-catching was the admission by Johnson that the campaign to declare genocide in Xinjiang through the United Nations is locked by China sitting on the UN Security Council (see previous editions). Asked by Rachael Maskell if the UK would push “for a special meeting at the UN to find a mechanism to hold those responsible for these crimes [human rights abuses in Xinjiang] to account”, Johnson replied:
We did discuss many times over the last few days what has happened in Xinjiang, the suffering of the Uyghurs and particularly the crimes against women that the hon. Lady describes. The difficulty with the UN Security Council approach, as she will understand, is that China is a member.
Take note. Usually when the Government is asked about the UN Security Council issue, it avoids the question by stating that genocide can only be determined by a competent court. Will this 18 word break from the agreed line will come back to haunt Johnson by providing new evidence to campaigners?
Separately, if you have the time or the inclination, both China Research Group co-founder Tom Tugendhat and IPAC co-founder Iain Duncan Smith have taken it upon themselves to offer views on how the West should respond to China.
In perhaps the most brazen defiance of the joint declaration to date, Hong Kong police arrested senior editors and executives of a newspaper belonging to pro-democracy mogul Jimmy Lai on Wednesday. It marks the first use of the territory’s national security law directly against journalists.
The Financial Times reports:
At least 500 officers were involved in the Thursday morning raid on Apple Daily, a popular tabloid known for its willingness to confront and criticise the government. Police instructed reporters to register their identities and prevented them from filming the raid or going to their desks. The journalists were told to gather in a separate part of the building because their workplace was part of a “crime scene”. The police said they were gathering “evidence for a case of suspected contravention of the National Security Law” and used a warrant to search for and seize journalistic materials.
The South China Morning Post produced an explainer. As to why the arrests took place, the paper stated:
Senior Superintendent Steve Li Kwai-wah, who heads the police national security department, said the five senior staff members were arrested on suspicion of colluding with foreign forces to endanger national security, because they had played a crucial role in the publication of at least 30 articles calling for foreign sanctions on Hong Kong and China.
Some of the articles dated back to 2019, before the enactment of the law came into effect last June. The government had previously said the legislation, imposed by Beijing, would not be retroactive.
Li did not disclose any details about the articles in question, but warned the public not to circulate or share them online “so as not to attract suspicion”.
Secretary for Security John Lee Ka-chiu declined to say what the articles were about, but said the case “involved a conspiracy … in which there are a series of acts”.
A police source told the Post that most of the questionable articles were commentaries and opinion pieces, with some being penned by Lai.
The raid prompted Foreign Secretary Dominic Raab to tweet:
It’s unclear if further action is on the cards. MPs have been pushing for sanctions on Chief Executive Carrie Lam and other top brass for a while now, but this seems unlikely. Some of them took to Twitter to complain.
The Global Times editorial is worth glancing over:
The US and the UK must accept the reality that they can no longer influence the situation in Hong Kong. The city has returned to its motherland, and is now governed by the Constitution of the People's Republic of China and the Basic Law. The US and the UK have no right to make judicial definitions of Hong Kong affairs. If they insist in doing so, all they do will become merely a show. The national security law for Hong Kong has already blocked the influence of such shows outside the city.
The overall situation of the game is now clear. The US and the UK are running out of tools to intervene in Hong Kong affairs. All they are left with is making cheap statements. They keep "hamster wheeling" and their voices are highly repetitive, which, even in the West, are losing influence. Among Hong Kong people, a viewpoint has been shaped - Hong Kong is beyond the US and UK's grasp and whatever they say is pointless.
Hong Kong society can finally calm down and earnestly carry out social construction, which is in line with the Basic Law and different from that in the mainland. Apple Daily must focus on being a media outlet and exercise normal freedom of the press, rather than being hijacked by the executives of Next Digital and turned into a base for political motivation and communication center of Western forces to attack Hong Kong, jeopardize its stability and thus contain China. It cannot turn freedom of the press into freedom of undermining Hong Kong's operations and Chinese unity. It must not use the legal logic of the US and the UK, and rely on their support, to arrogantly confront China's Constitution and Basic Law.
As of writing, the Chinese Embassy in London had not issued a response yet. However, on Monday it did publish a response to the inclusion of Hong Kong in the G7 Communiqué:
Question: The G7 communiqué calls on China to respect “those rights, freedoms and high degree of autonomy for Hong Kong enshrined in the Sino-British Joint Declaration and the Basic Law”. What is your comment on this?
Embassy spokesperson: The Chinese Government governs Hong Kong Special Administrative Region in accordance with the Constitution of China and the Basic Law of the Hong Kong SAR, not the Sino-British Joint Declaration. The Joint Declaration is about China resuming the exercise of sovereignty over Hong Kong. No country should use the Joint Declaration as an excuse to interfere in Hong Kong affairs.
Since Hong Kong’s return to China, the policy of One Country, Two Systems, Hong Kong people administering Hong Kong and a high degree of autonomy has been earnestly implemented. The rights and freedoms enjoyed by Hong Kong residents in accordance with the law have been fully protected. Hong Kong’s achievements in its development have won global recognition. For 150-plus years under the colonial rule, Hong Kong residents had been a target of oppression by the British government, with no democracy or human rights to speak of. Had the United States or others paid any attention to Hong Kong’s human rights and democracy back then?
The Central Government’s relevant measures for Hong Kong to enhance national security and improve the electoral system will strengthen the protection of the legitimate rights and freedoms enjoyed by Hong Kong residents, promote Hong Kong’s long-term prosperity and stability, and contribute to the steadfast and successful implementation of One Country, Two Systems. These efforts have won the support of the overwhelming majority of people in Hong Kong.
China is firmly resolved and confident in upholding its national sovereignty, security and development interests and maintaining long-term prosperity and stability in Hong Kong. We urge the relevant sides to face up to the reality that Hong Kong returned to China 24 years ago, abide by international law and norms governing international relations and immediately stop interfering in China’s internal affairs including Hong Kong affairs.
Divide and conquer
Thursday morning saw the publication of a new Foreign Affairs Committee report, ‘In the room: the UK’s role in multilateral diplomacy’. The brief for this inquiry was:
The ways in which states engage with multilateral organisations is changing. Increasingly, smaller groups of like-minded states are taking collective action to shape the agenda and influence policy. There has been a rise in influence of states who are members of multilateral organisations, but do not necessarily share all their values; this can lead to the exploitation of vulnerabilities for their own internal or foreign policy objectives.
This inquiry will focus on the role of the FCO in exerting the UKs (sic) influence within these organisations and examine how it might drive reform in order to reduce their vulnerability to abuse and misuse.
Two observations. First, China is mentioned 85 times compared to only 58 for Russia; this likely points to a wider trend of thinking in Westminster that it is clearly the former doing more to subvert international bodies than the latter.
Second, the report chastises the Government for failing to counter Chinese influence, stating “although the UK Government has at times successfully countered malign interference in multilateral organisations we believe that it has failed to adequately respond to the creeping capture of organisations by China.” It is once again worth stating: MPs sitting in Committees have access to some of the sharpest minds across the UK available to give private and public evidence. This assessment is therefore likely the end product of some very strong fascinating opinions and advice. How will the Government respond?
Here are the three major recommendations:
The Government should, wherever possible, seek to use multilateral organisations to pursue its foreign policy objectives. Engagement with these bodies moderates the influence of those who would manipulate and undermine them. We recommend that this engagement should include publicly calling out states who are abusing or undermining the system, publicly voting against attempts by such states to secure key leadership positions for their nationals.
Better coordination is needed to proactively identify and respond to countries that undermine these organisations. We recommend that the Foreign, Commonwealth and Development Office (FCDO) leads within government on a tactical element of multilateral strategy, tracking the activities of authoritarian states within both higher and lower profile multilateral organisations, reporting on any moves to exert influence, and adjusting interventions accordingly. On an international level, we believe there is more the FCDO can do to enhance coordination across its diplomatic network, particularly between Geneva and New York, to address this undermining behaviour.
The influence of state actors with alternative understandings of individual rights is increasing and coordination amongst them is more effective and pronounced. To counter such influence, we recommend that the FCDO mobilises its soft power and convening resources to work with broad groups of like-minded states within multilateral organisations. The UK’s departure from the European Union provides increased incentives and opportunity for investment in such relationships.
The Government now has two months to formulate a response; keep an eye on this. It is, after all, the second critical Committee report in as many weeks of the Government’s handling of the China issue. We’ll leave you with an eye-catching graphic from the report.
Odds and ends
The US and UK are joining forces to fight Chinese efforts to conquer the aerospace market as part of a pivotal trade truce between the two nations (Telegraph)
CRG co-founder Tom Tugendhat writes about the links between China and universities (Financial Times)
A meeting between the former Chinese Ambassador to the UK Liu Xiaoming, and the current British Ambassador to China Caroline Wilson. Chinese readout here.
Looks like detail is still fairly scarce when it comes to understanding how the newly announced ‘Build Back Better World initiative’ will be funded.
An oddly timed question from Tan Dhesi, Labour’s Shadow Minister for Transport. He asked:
The Secretary of State for Foreign, Commonwealth and Development Affairs, what assessment he has made of the implications for his policies of reports that patents were filed in July 2018 for technology that could identify people by their ethnicity by (a) Huawei and the (b) Chinese Academy of Sciences which specifically seeks to identify members of China's Uyghur population; and what recent discussions he has had with (i) Cabinet colleagues, (ii) representatives of Huawei and (iii) other relevant stakeholders on the potential role of that technology in the persecution of the Uyghur population in China.
Huawei’s patents was not a recent revelation, so your writer would speculate that this question stemmed from Dhesi recently reading that the electronic giant’s most accounts showed turnover plunged 27.5% to £913.3 million in the year to the end of December. This in part has been credited to the government ban ,and America blocking the installation of Google apps on its smartphones. Profits fell by 20.8% to £29.7 million.
New bank, Alibaba, Xinjiang cotton
New Week, New Bank
On Thursday, the Government officially launched the UK Infrastructure Bank (UKIB) in the sunny city of Leeds. With a mission statement to “partner with the private sector and local government to increase infrastructure investment to help to tackle climate change and promote economic growth across the regions and nations of the United Kingdom”, it will be “operationally independent and work with HM Treasury.”
A couple of things to jot down:
This was first announced in Chancellor Rishi Sunak’s November 2020 Budget
It will receive an initial £12 billion of capital and £10 billion of government guarantees, which will enable it to unlock more than £40 billion of financing for key projects across the UK
It will prioritise investment in projects that help tackle climate change, helping the UK to meet its net zero target by 2050, and level up the country by supporting regional and local economic growth
It is being chaired by Chris Grigg CBE
There’s not a huge amount of detail on the leadership or advisory structure yet
As multiple Government press releases have made clear, the purpose of UKIB is to support clean infrastructure and ‘Level Up’ the country (i.e. the North of England). That feeling of deja vu you may could be because much of this sounds like a pitch for former Chancellor George Osborne’s ‘Northern Powerhouse Project’, which shared many of the same ambitions. Indeed, if we cast our collective minds back a couple of years, we may remember a certain Chancellor making the exact same pitch during a visit to Chengdu:
What’s remarkable is the way in the last 10 years or so cities like Chengdu have become a real powerhouse of the Chinese economy.
And the way you have established links with other great cities like Chongqing, 200 miles away - an example of how big cities can come together in economic clusters, and be greater than the individual parts.
The sum can be greater than the parts.
That is precisely what we’re trying to achieve in the United Kingdom, with our great industrial cities of the north of England.
Bringing the cities together, creating modern high speed transport links between those cities, making sure that they have strong civic leadership, bringing investment to them, and as a result creating a North of England that is greater than the individual parts.
The Northern Powerhouse that we are seeking to create.
And whilst when we come to China we promote the whole of the United Kingdom and we treat seek to attract investment across the whole of our country, very specifically this week I have come here with my friends and colleagues from many different cities in the North of England, to promote investment in the Northern Powerhouse.
It will be fascinating to see if the bank ends up partnering with any Chinese companies as it looks to level up the North of England. Key documents to read: UK Infrastructure Bank Framework Document, UK Infrastructure Bank Policy Design
Pay to play
A very positive writeup (looks like the journalist has just copied the press release) in ThisIsMoney for Alibaba’s newest offering.
In recent decades, it's China that has pushed hard and sold its mass-produced goods around the world.
But now one of the biggest online shopping websites is giving British businesses access to sell to its 800million-strong Chinese consumer market.
Alibaba Group's Tmall Global claims there is a strong demand for British products in China and has announced the UK and Ireland edition of the 'Go Global 11.11 Pitch Fest' – a virtual event in which business founders get to pitch their products to a judging panel, Dragon's Den style.
British brands tend to do well in China and the 11.11 festival which starts on China's Singles Day - an unofficial holiday and start of a shopping season - is a very lucrative event. Singles Day or Double 11 celebrates people that are not in relationships.
As the name suggests the 11.11 festival, which starts on the Singles Day, lasts 11 days. In 2020 during that period $494million worth of goods from UK businesses were sold.
We’ve discussed before the power of the ‘Made in Britain’ brand with the Chinese consumer. Research from Barclays earlier this year found “two thirds (66%) of consumers in China said they’d be inclined to pay more for goods displaying the Union Jack because they believe them to be of a higher quality.”
Alibaba also caught our eye this week after its executive vice-chairman praised the National Security Law in Hong Kong. Speaking to the South China Morning Post, Joseph Tsai, a Mandarin speaker who grew up in Taiwan, said:
“Hong Kong used to be a colony around 100 years ago, [after] China lost Hong Kong to the Brits because of the Opium War … this is a very scarring kind of history of China, having foreign powers come in and carve up your territories”
“So if you put yourself in the Chinese people’s mindset, if you’re a Chinese citizen, I look at this history, I want to make sure that we prevent foreign powers from carving up our territories.
“There’s a lot of criticism of the democratic freedoms or freedoms of speech that have been suppressed. But overall, since the imposition of the national security law, everything is now stabilised.”
This raised an eyebrow with one of our sources, who indicated to us that this could be Tsai trying to smooth things over with Beijing, following Jack Ma’s fall from grace last year.
For those keeping tabs on cotton production in Xinjiang, this week saw the arrival of the Cotton China Sustainable Development Program. This new Chinese body will “build a homegrown independent sustainable standard and certification system to counter the West's dominance that has posed serious threat on China's cotton industry”, per the Global Times.
The paper continues:
The move marks a milestone in overhauling the global cotton rule-making system, which is currently monopolized by the Better Cotton Initiative (BCI), a West-led industry body that has apparently been manipulated by some anti-China forces in their slandering against China and its policies in Northwest China's Xinjiang Uygur Autonomous Region.
Readers may remember the BCI was used by many Western companies to certify that the cotton in their supply chain was slave labour free. It pulled out of Xinjiang last year when it said it couldn’t guarantee this was the case.
The Global Times adds:
Gao Fang, chairman of the CCA, said at the opening ceremony that under the program, the CCA will also commence evaluation work on cotton producers, and push forward the mutual recognition between Chinese standards and international standards. Also, a traceable system will be set up to supervise the whole supply chain.
"We had already begun the work, but the BCI's [license suspension in April] further raised the urgency and sped up the process. All industry bodies have been uniting to help promote Chinese cotton, to make us less constrained by [other nations]," Wang Jiandong, vice chairman and secretary general of the CCA, told the Global Times on the sideline of the conference on Thursday.
"Why does the BCI's license have such a global influence? And why China - as the world's largest cotton consumption country and the world's second-largest cotton producer - has a limited saying in trade practices in international sphere? We should reverse this situation," Wang said.
Industry insiders noted that the ultimate goal of the program is to challenge the BCI's rules, reduce reliance on Western standards, and promote the China-developed sustainable cotton standard in the world, while also raising global brand awareness for China-made textile and clothing.
This presents a new frontier and challenge for Western companies with cotton supply chains in Xinjiang. Previously they could use the BCI as a buffer for not sourcing from the region - we suspect the creation of the Cotton China Sustainable Development Program will rid them of this option.
Odds and ends
The British Chamber of Commerce in China presented their report to Lord Grimstone this week.
Scottish aviation services provider John Menzies has taken a minority stake in Guangzhou JFreight Aviation Logistics Supply Chain Co. Under the deal, John Menzies initially will operate a new cargo terminal at Guangzhou Baiyun international airport, a hub often listed among the top ten in the world for passenger numbers, as well as handling large volumes of cargo. (The Times)
ByteDance, the Chinese owner of popular app TikTok, saw total revenue jump by 111% to $34.3bn (£24.7bn) for 2020. (BBC)
Some councils are beginning to review contracts with Hikvision, after the company was tied to Uyghur abuses in Xinjiang (Telegraph)
Fascinating deep dive into CGTN (Financial Times)
Puzzling move Hong Kong authorities, who appear to have told Cathay Pacific that they will renew the visas of all of the airline’s expat pilots, but not its large contingent of foreign cabin crew. (SCMP)
A British MP gracing the pages of the South China Morning Post. Mark Logan, a former attache to the UK embassy in Beijing during the 2008 Olympic Games and then head of communications and chief spokesman at the British consulate-general in Shanghai (2012-16). penned an op-ed, “G7 summit shows China is still setting the agenda”.
This turbulent time in global politics has shown the gulf between values and approaches to governance cherished by China, and countries such as my own. But for us to truly get past the recent turbulence, we in the West must swallow a modicum of pride and accept that China will often set the agenda, or at the very least, will want to chip in during the “any other business” part of discussions.
Similarly, China must make a positive case and rebuild its ties with the West, while being open to criticism on how it can moderate its more questionable actions. Agenda-setting begets great responsibility.
The rumour machine goes into overdrive
Early on Friday morning, phones across Westminster and Fleet Street pinged awake with a fairly unbelievable story. The Daily Mail was reporting a vice minister of State Security, Dong Jingwei (董经纬) had defected in mid-February, flying from Hong Kong to the United States with his daughter, Dong Yang. The source of this story was from the popular briefing SpyTalk, who in turn had sourced it from Chinese-language anti-communist media and Twitter. They added that it “would be highest-level defector in the history of the People's Republic.”
Dong’s defection was raised by Chinese officials last March at the Sino-American summit in Alaska, according to Dr. Han Lianchao, a former Chinese foreign ministry official who defected after the 1989 Tiananmen Square massacre. In a tweet on Wednesday, Han, citing an unnamed source, alleged that China’s foreign minister Wang Yi and Communist Party foreign affairs boss Yang Jiechi demanded that the Americans return Dong and Secretary of State Anthony Blinken refused.
As of the time of writing, this whole story appears to have been fabricated. Dr Han tweeted:
【董经纬信息更新】我转了一朋友发来的小道消息发了酵，似乎惊动了美主流媒体，有记者问怎么回事，我如实回答说是大陆人士发来、无法证实的小道消息，之前我的推特特别说了姑妄听之。美记者也无法证实。党国当下小道消息满天飞是一个山雨欲来的征兆。 https://thedailybeast.com/rumors-of-us-secretly-harboring-top-china-official-dong-jingwei-swirl?source=twitter&via=desktop… via @thedailybeast
[Dong Jingwei information update] I transferred the gossip sent by a friend and it seemed to have alarmed the mainstream media in the United States. A reporter asked what was going on. I truthfully answered that it was an unverifiable gossip sent by a mainlander. Before, my Twitter specifically talked about it. American reporters could not confirm this either. The gossip of the party-state is flying all over the sky is a sign that the rain is coming. https://thedailybeast.com/rumors-of-us-secretly-harboring-top-china-official-dong-jingwei-swirl?source=twitter&via=desktop… via @thedailybeast
As of publishing, it’s not clear what is fact and what is simple fabrication. Regardless, this story is already being discussed and shared widely among the ‘China watcher’ community in the UK.
What we learned from this week
Has economic engagement with China failed? Cindy Yu hosts Chinese Whispers, with guests Stewart Paterson, author of China, Trade and Power, and Yu Jie, senior research fellow at Chatham House.