Written Evidence Submitted to the Foreign Affairs Committee
by Dr Scott A.W. Brown
Inquiry: UK Relations with China
- The overall UK-China relationship is currently dominated by economic interests and notably lacks significant points of tension/dispute
- The UK leaving the EU will reduce the former’s influence vis-à-vis China
- China may use the departure of the UK from the EU as an opportunity to revisit the status of the arms embargo imposed against it in the summer of 1989
- While there are clear opportunities presented by China’s continued economic growth, the tensions in the South China Sea impact on the UK’s global interests and require careful consideration and an understanding of the risks ahead.
- The UK should continue to work closely with the EU as both continue to develop their relations with China, as their interests will have significant overlap.
- The UK should also work with the US where possible, and in particular attempt to steer the Trump administration away from confrontational policy stances.
- The UK should not, on its own, consider revoking its arms embargo against China unless there is a substantial improvement in the human rights record of the PRC and then only if it can do so without causing a downturn in relations with either the EU or the US, both of which continue to maintain arms embargoes against China.
Background to Submission
I obtained my PhD from the University of Glasgow in 2014, following comparative analysis of the foreign policies of the US and the EU (with a particular focus on the UK and France as key players) towards China since the end of the Cold War. In late 2014, I established the UK’s first dedicated EU-China relations modules (undergraduate and postgraduate levels) at the University of Dundee. This was achieved through funding obtained from the EU’s Jean Monnet/Erasmus+ programme (decision 2014-1927) and became the only dedicated university-level course on EU-China relations outside of the College of Europe, Belgium. In August 2016, I took up the post of Post-Doctoral Fellow with the Center for European and Transatlantic Studies within the Sam Nunn School of International Affairs at the Georgia Institute of Technology in Atlanta, GA. In 2017, I will publish a monograph based on an updated version of my PhD research (contracted to Routledge). My motivation for submitting written evidence is that, as a British citizen, I have a direct interest in my government having a healthy relationship with the world’s leading powers, such as China, as well as this being one of my main areas of research at present. The evidence below is based on my previous and ongoing research efforts, presented in a way that will, I hope, be of use to the Committee. This submission reflects the views of myself — Dr Scott A.W. Brown – alone, and not those of my institutional employer, the research centres or departments I am attached to, or my colleagues.
State of relations, impact of the UK leaving the EU
- Political relations between the UK and China are presently in a good place, particularly relative to where they have been at times in the past quarter-century. However, the amicable relations have largely resulted from an observable shift towards greater political accommodation on the part of the UK government, entailing prioritisation of a positive political environment to facilitate closer trade/economic relations at the expense of attempting to shape China’s domestic and international behaviour or criticize violations of values which, at other times, the UK has attempted to project at the international level. This shift occurred under the stewardship of former Prime Minister Cameron and former Chancellor Osborne, in the wake of China’s vociferous criticism of the two meeting with the Dalai Lama in 2012, which the PRC government continues to consider a direct violation of their sovereign affairs. Multiple news sources reported that Osborne subsequently pushed for prioritisation of economic interests in the bilateral relationship. The 2015 state visit by President Xi Jinping highlighted the positive tone in relations, but was criticised by the British (and some international) media as well as civil/human rights groups, on the basis that the image created was one of effective subservience to China’s economic strength. The ascendancy of Theresa May to the post of PM in the summer of 2016 has resulted in a ‘cooling off’ from the idea of a ‘golden era’ of UK-China relations. The Prime Minister raised security concerns in relation to China’s involvement in the Hinkley Point C civilian nuclear project, although only delayed the final approval. The new government has understandably been preoccupied with preparation to leave the EU, thus China has slipped down the political agenda. Nevertheless, in the short term it does not seem likely that there will be a substantive policy shift on the UK’s part. 2. From China’s perspective, there is likely to be a ‘wait-and-see’ approach adopted with respect to the relationship as the UK leaves the EU. China has carefully cultivated its bilateral relations with key EU Member States – especially the so-called EU3 of the UK, France and Germany – and will continue to do so. However, the value of the UK is undoubtedly reduced as it will no longer be able to influence the EU’s collective position on relations with China. For example, the UK had long advocated for the EU to grant China Market Economy Status (MES). That the EU did not automatically do so in December 2016 – which China contends was part of its World Trade Organisation accession agreement – is likely to lead to problems in the EU-China relationship in the short-term. China would have previously been able to look to the UK to support its position, but will no longer be able to do so as the UK’s ability to influence EU positions has evidently been constrained even before the formal negotiations on its exit have begun. More broadly, the PRC leadership have a preference for stability and predictability in international affairs – that the UK and the EU are now entering a period of uncertainty in their relationship, China will be concerned about the possible negative consequences for its own interests and also for the wider international system. The uncertainty created by the incoming Trump administration and its position on relations with China also fuels uncertainty; the UK could potentially act as a ‘bridge’ between the two to ensure that tensions are not – deliberately or accidentally – increased.
The EU and UK arms embargoes against China
- One issue that HM Government and the FCO in particular should be prepared to consider in the near future is the status of the UK’s arms embargo against China and the future of dual-use exports. Since June 1989, the UK has been politically, but not legally, committed to an EU-level arms embargo. Since 2003, China has asked the EU to lift the embargo, with the issue gaining significant prominence between late 2003 and mid-2005. That China reiterated its desire to have the embargo lifted in its 2014 policy paper on relations with the EU indicates that the issue has not been forgotten. The UK government clarified its definition of the arms embargo in 2012; however, the SIPRI arms transfer database reports that since 1997 there have been frequent exports which can be considered defence-related, even if only ‘dual-use’ (both civilian and military applications) in nature. It would not be surprising if China sought to utilise the UK’s departure from the EU to revive attempts to have the embargo(es) revoked by both. With respect to the UK, China may attempt to tie the issue to wider economic/trade agreements and demand it lifted or at least relaxed.
- At the EU level, other Member States who have been proactively in favour of lifting the embargo have seen the UK as one of the main obstacles to achieving this goal. Thus, without the UK, both China and these Member States may seek the opportunity to remove the ‘political’ arms embargo, even if the wider legal apparatus – specifically the Code of Conduct on Arms Exports – remains in place. Any such move would be watched closely by the US, which has consistently opposed any changes to the status of the arms embargo since the debate was initiated in late 2003. The potential to damage transatlantic relations (for either the UK or the EU) by granting China this wish without taking into account US preferences remains high. Thus, the UK-China relationship has clear potential to affect the UK-US and UK-Japan relation, given that Japan was a vociferous opponent of the arms embargo being removed in 2003-2005.
Economic and trade interests
- On the economic/trade front, while both governments have reported that this has been moving in a positive direction in recent years, the uncertainty of the UK leaving the EU – particularly the Single Market and Customs Union – will require recalibration of the relationship. The UK will no longer be able to shape, or ultimately benefit from, the EU-China Bilateral Investment Treaty currently under negotiation. It is possible that once successfully concluded and implemented, the new EU-China BIT may decrease the attractiveness of the UK as a destination for Chinese investment and/or the UK will not benefit from new ‘openings’ in the Chinese market. The BIT has also been touted as a ‘testing ground’ for the prospects of negotiating and EU-China free trade agreement. Although this is unlikely to happen for some time, the UK would, in relative terms, likely lose out from not being party to the FTA. Any bilateral UK-China FTA in the future would likely benefit China to a greater extent than the UK, given the simple importance of economic weight (market size) as leverage in bilateral trade negotiations. However, that the UK lacks sizeable domestic industries that are acutely vulnerable to cheap Chinese imports – such as the textiles industries in a number of other EU Member States – entails that there will be fewer protectionist interests which might otherwise narrow the scope of any such deal. The Asian Infrastructure Investment Bank (AIIB) and the One Belt, One Road initiative will provide new investment opportunities for the UK, albeit some perceive both as an attempt by China to use its economic power to increase its political influence and, in the case of the AIIB, challenge the dominance of the established (Western-led) institutions.
China an UK roles in international organisations, alignment of interests
- In the UNSC, the pattern of UK and China support for each other and voting patterns are unlikely to change significantly. China will continue to defend the principle of sovereign spheres of non-influence, while the UK will continue to broadly be aligned with the US and France on key issues. However, both the UK and China have a vested interested in the continued UNSC unity on the issue of Iran’s nuclear programme and ensuring the success of the Joint Comprehensive Plan of Action (JCPOA). The incoming Trump administration in the US raises uncertainty in this respect, thus the UK and China should seek to use their influence in international organisations such as the UNSC to prevent the deal being undermined. Unity in the UNSC among the UK, France, China and Russia may prove to be vital for the JCPOA’s continued success.
- My recent research into EU-China interactions in the G20 showed that, despite rhetorical promises for increased cooperation, the EU and its Member States largely coordinate with each other and the US and are usually aligned on key issues. China tends to work closely with Brazil, Russia and India (the other key BRIC nations) in the lead-up to, and during, G20 summits. Given their divergent economic interests and levels of development, this is unlikely to change in the short- to medium-term. China’s leadership role in the 2016 G20 summit was largely viewed positively, although whether this reinvigorates the multilateral format to the extent that was seen in the first few years following the 2008 financial crisis remains to be seen.
- In the WTO, the UK will establish itself as an independent member following departure of the EU. Until then, the UK will continue to be represented by the EU in the WTO and, importantly, the WTO Dispute Settlement Body. The UK will require trade lawyers prepared to deal with complaints brought by China in the future, as it has become more active in the DSB in recent years, learning how to use the system to its own advantage. The UK should also be prepared to lodge complaints against China in the WTO when deemed necessary to protect its rights under international trade rules.
China’s foreign and security policies in East Asia and South East Asia
- At present, the most pressing issue is the actions of China in the South China Sea, particularly in the wake of the 2016 arbitration ruling which found many of these to be illegal. China’s island-building and militarization activities risk destabilising the region and also have caused considerable environmental damage. China had previously given assurances to the US that it would not militarise the South China Sea, but has now acknowledged that it has effectively done so and, moreover, publicly defended the decision. China has also established an Air Defence Identification Zone (ADIZ) in the East China Sea and it is widely speculated that it may do so in the South China Sea. These activities are in direct opposition to the UK’s stated commitment to the peaceful resolution of territorial disputes in the South China Sea and the continued freedom of navigation and overflight in the region. How China’s behaviour evolves in the South China Sea will be a key test to the extent to which it is willing to integrate with the established rules and norms of the international system. The UK’s position aligns with (most of) the EU and the US, as well as other allies in the region. The UK can continue to play a role in the UNSC to encourage China to abide by existing rules – particularly those laid down in the UN Convention on the Law of the Sea – but will, within the next few years, lose its ability to use the collective influence of the EU. Nevertheless, the UK and EU could continue to work closely in terms of setting out their positions on these issues. The UK will also have to watch how the incoming Trump administration recalibrates US-China relations, particularly as nominated Secretary of State Tillerson, during his confirmation hearings, advocated a “blockade” of the South China Sea in response to China’s island-building/militarization activities. Such a policy would be the quickest route to confrontation and possibly conflict between the US and China, and it is in the UK’s interests to ensure that this does not occur. The UK could look to work with the US to foster other policy responses which will receive support from the wider international community.
Opportunities and threats posed by China’s long term relative and absolute growth as an economic and security power, UK contribution to shaping China’s global role
- The key question remains as to whether China is going to fully integrate with the established international order. The UK, through both its independent foreign policy and the framework of the EU, has consistently adopted a strategy of engagement in order to ensure this outcome. Leaving the EU will undoubtedly weaken the UK’s relative influence in this respect. Nevertheless, its seat on the UNSC will be one facet of its power that will not change. Thus, opportunities to positively influence the direction of China’s (re)emergence as a great power remain. The UK lacks a significant regional presence; an attempt to establish one in the current environment would likely be perceived negatively by China, which frequently warns against increased external interference.
- The economic opportunities will likely continue to increase, as China’s economy matures, with a growth in the middle class which provides new opportunities for British investment. Barring a collapse of China’s economic growth, the UK will have new trade and investment opportunities to explore with respect to China. However, China is increasingly learning to use its economic weight as leverage in its economic and political relations, and the UK – once removed from the EU – arguably will be more exposed in this sense. It may be able to mitigate these by aligning with the EU, the US, and others, when their interests vis-à-vis China overlap.
- China, like the UK, has a vested interest in both regional and international peace and stability in order to ensure its continued economic growth and, at the elite-level, the survival of the current regime. However, this does not preclude the possibility of misunderstanding, miscommunication or miscalculation on the part of China and other actors in the Asia Pacific – including, not least, the US and Japan – which might inadvertently lead to regional conflict. Under such circumstances, the UK’s main allies may look to it for political, if not military, support. China does not pose a direct threat to the security of the UK, but there are scenarios under which the UK’s wider interests with respect to international security are undermined by situations beyond its control. The UK, however, could use its close relationship with the US to exert influence over the latter to ensure that policies towards China are measured and responsible.
 I have previously published research on the UK (and France’s) input in the 2003-05 arms embargo debate. Available freely at: http://www.jcer.net/index.php/jcer/article/view/306/260
 The SIPRI arms exports database (https://www.sipri.org/databases/armstransfers) reports that between 1997 and 2015, the UK’s arms-related exports to China were valued at a total of $800m at constant (1990) prices.