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Welcome to ‘Beijing to Britain’ - a weekly overview of the ebbs and flows of the discussion in Westminster and the City around the UK’s relationship with China, and how it impacts politics, the private sector and society.
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Politics
Touchdown: The Prime Minister, Foreign Secretary and COP26 President visit America for UNGA
Extradition warnings: The FCDO warns British citizens they may be touched by the long arm of Hong Kong’s National Security Law
National AI strategy: It’s finally here, sort of
Spotted: Our roundup of things dipping under the radar
Business
Banks: A new inquiry on the horizon
Sizewell C: The Government may be about to make a significant announcement
MoD and the private sector: The Department joins an accelerator programme
Spotted: Our roundup of things dipping under the radar
First, a quick look at this week for China in Parliament
17 mentions of China (down 33 from last week)
No mentions of Xi Jinping (same)
1 mention of Hong Kong (down 5)
1 mention of Taiwan (same)
4 mentions of Uyghur (up 3)
3 mentions of CCP (up 1)
589 out of 650 MPs (90.6%) have a Twitter account.
Who’s asking what?
Order! Order!
Some of the more notable questions this week
Owen Thompson (SNP) asked “the Chancellor of the Exchequer, what assessment he has made of the impact of the current financial status of the Chinese property group Evergrande on (a) the world economy and (b) the United Kingdom economy.”
Lord Marlesford asked “Her Majesty's Government what steps they are taking to remove China General Nuclear from further participation in the Bradwell B and Sizewell C nuclear power projects.”
Politics
New York, new advice, new AI
UNGA
This week, representatives from countries around the world gathered in New York for the United Nations General Assembly (UNGA).
For Prime Minister Boris Johnson, it was a chance to try and focus international attention on next month’s COP26 meeting in Glasgow and to set out his grand vision for tackling climate change. Joining the PM on the trip were new Foreign Secretary Liz Truss and COP26 President Alok Sharma.
Of particular interest to readers will be the comments Johnson and Sharma made about President Xi Jinping and China at the beginning of the week. Over the weekend, the latter had the unenviable media round task of explaining that President Xi has still not confirmed his attendance at COP26. However, he did note that “in every conversation I had with the Chinese they were very clear that they want to see COP26 as a success so the ball is very much in their court." Speaking to the media in reference to Beijing’s efforts to be net zero by the middle of the century, 2060, Johnson said “that’s extraordinary progress and Alok has had some great conversations already with his Chinese counterparts about the things they want to do. I think China is massively important on this but it shows real signs of making progress”
It’s not really clear if President Xi has any real reason to come to COP26. He already used his United Nations speech to pledge that China will not build new coal-fire projects abroad (although like most Governments, more words than policy). Sharma was chuffed, stating it had been a key topic of discussion during his recent visit, while the UK Embassy in China added: “英国欢迎中国昨日在联合国大会上做出的不再新建境外煤电项目的承诺。在距离第二十六次#联合国气候变化大会 仅有不到50天之际,这是重要的一步, The UK has welcomed China's pledge at the UN General Assembly yesterday not to build any new coal power projects outside of China. This is an important step forward with less than 50 days to go before the 26th #UN Climate Change Conference.” We wonder if this will take the steam out of the West’s Green [and] Clean Initiative (a somewhat vague counter to the BRI).
Additionally, President Xi may well feel that the recent formation of AUKUS, coupled with the recent ban of his Ambassador from Parliament, is enough for him to miss the event. It’s also not clear if China really needs to act in unision with the rest of the world’s approach to climate change. Much of the literature your writer consumes points to Beijing taking a unilateral approach to climate change. As the China Research Group noted: “Tuesday’s pledge suggests that the Chinese Communist Party is determined to move forward with decarbonisation unilaterally. Since the unveiling of its 12th Five Year Plan in 2011, there has been a recognition that the costs to the Chinese population of environmental degradation and land and water pollution have become increasingly tangible as economic growth has decelerated.”
The Daily Mail was not sold on President Xi’s remarks, and quoted both IPAC’s Iain Duncan Smith and Gary Smith, general secretary of the GMB union in a piece criticising China’s coal industry. The latter said “We are importing virtue and exporting jobs.” Worth skimming the entire thing as it includes quotes from Lord Patten and Lord Lawson too.
Separately, on Wednesday evening it was announced that the Foreign Secretary would hold talks with her counterparts from the US, France, China and Russia to discuss Afghanistan. The Government’s readout was typically minimal, stating: “On 22 September, the Foreign Secretary chaired the first in-person meeting of P5 Foreign Ministers for two years. They discussed Iran nuclear talks, Afghanistan and COVID -19.” Skim the much more comprehensive Chinese readout here.
Lawless
It has emerged that the Foreign Office has been alerting people in the UK who were named in a Hong Kong national security case.
In a disturbing turn of events, several prominent human rights campaigners were warned that they could face extradition to China if they visited countries that have extradition treaties with Beijing.
Bill Browder was among those contacted. He told Bloomberg “I’ve been fighting with the Russians since 2005 and I’ve never received a call like this from the Russian desk. It tells me either the Foreign Office has got better at communicating with people who are in politically contentious situations -- or they are more worried about China than they were about Russia.”
There’s still a fair number of European countries that have extradition treaties with China or Hong Kong - France, Spain and Italy among them. While it’s unlikely that any European countries would extradite campaigners, it is worth noting how many countries throughout Asia have deals in place. And as the case of Meng Wanzhou and the two Michaels makes explicitly clear, President Xi is more than happy to engage in hostage diplomacy. Indeed, Chinese Ambassador Zheng said as much, tweeting: “The return of Ms. Meng Wanzhou sends out a clear message: China will do whatever it takes to protect the legitimate rights of its citizens. Welcome home!”
P(AI)N
It’s taken some time, but the UK Government now has the beginnings of artificial intelligence (AI) strategy in place.
On Wednesday, it published its first ever National AI Strategy (here). This set out a ten-year framework to position the UK as “the best place to live and work with AI; with clear rules, applied ethical principles and a pro-innovation regulatory environment. With the right ingredients in place, we will be both a genuine innovation powerhouse and the most supportive business environment in the world, where we cooperate on using AI for good, advocate for international standards that reflect our values, and defend against the malign use of AI.”
There’s lots on the economic argument for this AI strategy, but let’s focus on the security and foreign policy elements. As part of its 10-year strategy it explicitly notes “by leading with our democratic values, the UK will work with partners around the world to make sure international agreements embed our ethical values, making clear that progress in AI must be achieved responsibly, according to democratic norms and the rule of law.”
China is mentioned four times in the Strategy - every single time alongside a mention of the US too. We’re no AI experts so it’s worth reading how TechCrunch covered this strategy. It noted “Whether there’s much of policy substance here, as yet, looks debatable…Notably there’s a lack of new money being announced to back up the strategy…Instead the announcement is heavy on soundbites about “transform[ing] the UK’s capabilities in AI” — or positioning the U.K. as “the best place to live and work with AI”, whatever that means.”
In Westminster
Another busy week with some mentions of China and Taiwan worth looking at.
It emerged that no representative from the Department for International Trade has met with any Chinese officials since the beginning of the year.
During a wide-ranging debate, Labour’s Shadow Minister for Asia Stephen Kinnock raised Chinese steel dumping and slammed the Government for inaction, while Tory Miriam Cates noted “the cost of a shipping container from China has risen from around $2,000 a container last November to getting on for $20,000 now. That will have a huge inflationary pressure, given how much we import.”
In a discussion on Defence Exports, chair of the Defence Committee Tobias Ellwood repeatedly raised China as a concern.
The Government dodged some more questions this week. One on Taiwan, and one on how many companies have contacted them with supply chain concerns relating to Xinjiang.
Spotted
A short section of things we jotted down this week.
On Friday evening, Global Times reported that China had taken “reciprocal countermeasures against UK Parliament's ban on ambassador”, without clarifying what these measures are. We’re keeping an exceedingly close eye on this.
Is this confirmation that the UK Government does indeed have a strategy towards China? Look to the recent International Development Committee hearing with the Independent Commission for Aid Impact (ICAI) — the U.K. aid watchdog - examining British overseas aid to China. ICAI noted in frustration that although a strategy does exist, the FCDO barred them from seeing it, instead choosing to verbally brief them. “To understand what the strategy was would have enabled us to do our job as a watchdog … more effectively,” said Hugh Bayley, a commissioner at ICAI. “The strategy clearly sees ODA as a tool to be used for the pursuit of quite a number of the objectives in the strategy.”
We noted this letter from the Prime Minister to IPAC co-chair Iain Duncan Smith, which outlines the Government’s current views on forced labour in supply chains (to be “taken forward by G7 Trade Ministers” ahead of a meeting in October) and the Clean and Green Initiative (aka the West’s alternative to the BRI.) This is a project to which the Prime Minister is “personally committed” apparently.
UK Ambassador to the UN Simon Manley expressed concern over Xinjiang as part of his speech during the UN Human Rights Council meeting. Watch here.
Chinese Ambassador Zheng Zeguang has held two video meetings recently worth noting. The first was with Director of the British Museum Dr. Hartwig Fischer, an institute that Golden-Era architect George Osborne now chairs. The second was with Dr. John Chipman and Nigel Inkster of the International Institute for Strategic Studies.
Business
Banks in the limelight, nuclear, MoD
Same story, different day
It’s hard for banks to make friends, and few British companies operating in China attract the ire of Westminster as much as HSBC.
As we’ve noted in multiple past Briefings, this stems primarily from the London HQ-ed bank being one of the first companies to support Hong Kong’s National Security Law. This act placed it firmly in the targets of Westminster, and the bank has been grilled at Select Committee level and discussed in Parliament since then.
So what’s new? Well, this week the APPG on Hong Kong (what’s an APPG?) announced it would be launching an inquiry “into the actions of British banks operating in Hong Kong.” This will “seek to ascertain whether British banks have contributed to the suppression by the Hong Kong government, its police and its justice system, of freedom of expression, movement and association and whether they have unjustly denied the access of some Hongkongers to their own funds.” Clearly this will be much wider than just HSBC (Standard Chartered may also be examined), but it will probably focus on the former the most.
Here’s the good news for the banks: an APPG does not hold the same Parliamentary weight as a Select Committee. So although this APPG is borrowing the language a Committee would use, it cannot formally summon witnesses, nor does the Government need to respond to any report it puts out. APPG’s typically do not hold the same level of clout as a Committee and have more members to contend with.
Here’s the bad news: the APPG on Hong Kong is filled with MPs and Peers who are good at courting the press and genuinely angry at the way HSBC in particular has behaved. It also has a strong network of advocates around it, both in and out of Parliament. So while the Government will not need to necessarily pay any attention to a report, the media will likely be all over it, and this could cause some level of Government response.
Sizewell C-ya later
A leak to the Guardian outlines a potential deal that would remove China General Nuclear (CGN) from a major nuclear project.
The paper reports that Ministers are discussing plans to take a stake in Sizewell C power station, alongside the French state-backed power giant EDF. “That would be likely to result in China General Nuclear (CGN), which currently has a 20% stake in Sizewell, being removed from the project.”
It discusses American pressure, noting “Washington has been leaning heavily on Westminster to remove China from Britain’s nuclear power plans, blacklisting CGN, citing fears over national security and accusing it of stealing military technology.”
Let’s look at the nitty gritty of how the process would work: “Under plans for Sizewell being discussed by Whitehall officials and EDF, the government could take a stake in a development company that will push it through various stages of planning and bureaucracy, sharing the costs with EDF. Private sector investors such as the insurance funds L&G and Aviva would then be lured in at a later stage in return for a government-backed funding model called the regulated asset base (RAB), diluting the taxpayer and EDF. Legislation on RAB funding – the same model used to fund airports such as Heathrow and water companies – is due to progress through parliament next month.”
As the UK looks to bring China to the table at COP26, few in Beijing or the Embassy in London will be impressed with what they will undoubtedly view as Britain caving in to American pressure again. Expect comparisons to Huawei and articles calling London a lapdog.
MoD
Supercharging the accelerator programme.
That’s the Ministry of Defence’s plan. The MoD, through the Defence and Security Accelerator (DASA), has joined Aerospace Xelerated as a new programme partner.
Here they will invest in “world-class startups solving challenges for the aerospace sector, ranging from autonomous navigation to reduced workload. Successful startups will benefit from a £100K equity investment from Boeing, a further £100K+ in programme perks, access to future programme partners, investors and more.”
Cutting through the jargon, it’s worth looking at what areas in particular the programme is looking for: assured autonomy; autonomous navigation; generative design; smart maintenance; adaptive learning; reduced workload and Aerospace AI Applications.
Spotted
A short section of things we jotted down this week.
Seems Hikvision remain in the crosshairs. The Government confirmed it will be meeting the Biometrics and Surveillance Camera Commissioner shortly to discuss the issues raised in the correspondence with Chinese company. One to watch.
China is "wonderful” and ‘brilliant" on its carbon emission commitments and the City of London looks forward to continuing strong relationship and strengthening green collaboration with Chinese partners, said William Russell, lord mayor of the City of London. Russell is currently serving as the co-chair for the UK-China Green Finance Taskforce.
Long-time Times journalist Edward Lucas has announced he is running for Parliament in Westminster - and criticised the City of London Corporation’s “weakness towards the Chinese Communist Party”.
Reading list
What we learned from this week
Is it time to avoid investing in China? George Magnus, Financial Times
China Is a Declining Power—and That’s the Problem. Hal Brands, Michael Beckley, Foreign Policy
New world order: can Britain, America and Australia contain China? James Forsyth, Spectator
孟晚舟归国与大国政治下的“二选一 or Meng Wanzhou's Return to China and the "Two Election One" under Great Power Politics”. Chairman Rabbit
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