Foreign Secretary speech, BBC Panorama, HSBC, Parliament on Hong Kong Nat Sec Law
A Beijing to Britain briefing
Hello,
I recently re-read one of my all-time favourite books, James Clavell’s ‘Noble House’. As many readers will know, this legendary book is set over a single week in early 1960s Hong Kong. It follows Ian Dunross, the tai-pan of the imaginary trading house Struan’s, as he navigates the political and economic complexities of the era - Mao’s China, the Cuban Missile Crisis, Typhoon Wanda - alongside taking the firm public. Aside from Dunross, the book also contains one of my favourite fictional characters - a fellow called Alan Medford Grant. This associate of the Institute for Strategic Planning in London creates and delivers meticulous research notes which give Struan’s a financial and strategic advantage over the following decades.
I was mulling this over as I skimmed pages of evidence from a recent Parliamentary select committee session on the Arctic. The UK is a maritime power with a high level of technological expertise in Arctic and Antarctic operations and holds official observer status in the former. Commercially and politically, there appear to be clear opportunities for the UK to engage and set terms with China in this region, both of whom share a number of mutual interests which do not overlap with Russia’s.
On the former, as Elise Nyborg, Policy Adviser for the UK Chamber of Shipping identified in her evidence, the UK is “world-leading” both as a centre of expertise in Arctic research and as a centre for maritime services, and is very well placed to benefit from an increase in Arctic shipping “in terms of the provision of services and specialised equipment.” In its evidence, the Foreign Office noted that “new technology will be required to regularly and predictably meet the challenges of operating in the Arctic,” and that although the UK is reluctant to get involved in deep-sea mining, its mind could be swayed if “there is sufficient scientific evidence about the potential impact on deepsea ecosystems, and strong and enforceable environmental regulations and standards have been developed by the ISA and are in place.” Which companies are creating the technology that would be able to aid any of these future industries and opportunities? And on critical minerals, one expert noted that the standards involved in extraction in the Arctic are “considerably stricter than in Mozambique and the Democratic Republic of Congo.” Could this be a space ESG turns to next?
Diplomatically and politically, several witnesses argued the United Kingdom could increase its engagement and influence in the region. As evidence from multiple experts explained, this grouping of eight Arctic states - Canada, Denmark, Finland, Iceland, Norway, Sweden, Russia and the United States - are less keen on working with geopolitical pariah and strategically unclear Moscow in light of the illegal invasion of Ukraine, which has been reflected in a slowing of activity. Although China and Russia say they have a “friendship without limits”, their interests do not converge in this space. The United Kingdom could work with Five Eyes partners Canada and the United States to incentivise China (also an official observer) and India - both of which have major strategic interests in the region, for separate reasons - to reduce Russia’s influence.
On a bilateral level, the United Kingdom could look to engage with China on various environmental and sustainable development initiatives in the region, on the understanding that doing so must take place with maximum transparency. As the critical minerals race continues to heat up, Britain could play an active role in making sure the highest standards are applied to any mining or extraction. And given the “Chinese interior military texts portray the Arctic as a future zone of geopolitical tension,” according to Oliver-Gordon-Brown and Eva Kristinova of London Politica, another option, as outlined by Mathieu Boulègue of Chatham House, would be for the UK to “pioneer the creation of an Arctic Military Code of Conduct”, which could perhaps be a document “outlining the ‘rules of the road’ of acceptable military behaviour at peacetime as well as deconfliction activities aimed at increasing transparency and predictability in the region.” This seems a sensible recommendation.
Finally, here’s one more thing I’m keeping an eye on. With a General Election victory looking increasingly likely next year, Labour is beginning to get to grips with its foreign policy. This week, leader Keir Starmer promised to reset relations between the Labour Party and India, saying he wants to “recognise when it comes to India, what an incredible, powerful, important country India is … and to ensure that we have the right relationship as we go forward.” Keep that in mind when it comes to strategising a future Labour Government’s relationship with China.
— Sam Hogg, Editor
In this week’s Briefing Note, we look at:
Parliament’s debate on Hong Kong’s National Security Law, HSBC letter
Foreign Secretary’s speech on reforming multilateralism
BBC Panorama on China
KPMG’s latest report on China’s pension market, and the UK Government push
Major banks and investment companies give their view on the global economy and China