Lord Sassoon: Britain can ill afford to turn its back on China

Our relationship with China is far more symbiotic than its vociferous critics like to acknowledge

Britain is in the grip of some serious soul-searching over its relationship with China.

The coronavirus crisis has seen numerous appeals for us to “get real” about our approach towards the world’s second-largest economy. Most of these clarion calls have taken a similar form: a litany of grievances against the Chinese, capped by vague demands for Boris Johnson to take a tougher line with Beijing.

Playing the blame game might feel good, but it would be no substitute for a serious and thought-through strategy.

“Getting real” in the case of China means understanding that the UK already has important economic ties, which we can ill afford to put at risk. It also means recognising that the relationship gives us influence and a platform from which to pursue our broader goals. We need a load-bearing relationship that allows us to work with China on shared endeavours, such as combating climate change and future pandemics, and to challenge its government where we disagree – particularly on rule of law issues.

China already plays a central role in Britain’s economy. It is the third largest export market for British goods, with items worth £25.8bn sold there last year. That is more than 7 percent of our total shipments, and over double what we sold to China in 2012.

British service sector firms are forging ahead too, and running an ever-expanding surplus with China. Opportunities for British banks, schools and healthcare providers will continue to grow as it opens up further.

The tens of thousands of Chinese studying here provide vital revenue for our universities, while tourism from China was growing quickly pre-pandemic. Britain’s appeal to Chinese consumers is broad – Peppa Pig is a phenomenon among children, while football fans closely follow the Premier League. The likes of the British Museum and the Royal Shakespeare Company have enjoyed great success in China over the past few years.

Because of this export success, our sizeable trade deficit with China is shrinking. British companies from AstraZeneca to Burberry to Rolls-Royce have thrived on Chinese demand.

The pandemic’s impact will undoubtedly slow trade growth this year. Yet China’s economy has started recovering and its longer-term growth potential is huge as its middle class becomes wealthier.

For this very reason, China-Britain Business Council members remain committed to the market beyond the current difficult period. We should also be proud of our record in attracting Chinese capital.

Since 2000, the UK has received over £44bn of Chinese investment – more than twice as much as Germany, the second biggest recipient in Europe.

Scaremongers warn of China stealing British expertise, but more often such investment has helped to create or preserve British jobs. Jingye’s purchase of British Steel, helping to save 3,000 jobs, is a case in point.

A government looking to invest in the UK’s infrastructure renewal can ill afford to spurn China’s expertise – but that is what it will effectively do if, under pressure from the Sinophobes, the Government reverses its decision to allow Huawei’s limited involvement in building out Britain’s 5G network.

The desire to put our national foot down with China is perhaps understandable given this year’s events. But it is demonstrably neither in our own interest, nor in the interests of others whom we might seek to protect. Hectoring impotently from the sidelines will not persuade the Chinese to change their approach and may do considerable damage.

These are dangerous times for the global system. Yes, the UK must learn lessons about supply chain security. But to disengage with China just because globalisation has failed to turn that ancient nation into a liberal democracy would be folly.

Much of the analysis ignores the benefits to Britain from China’s rise: not just cheaper goods for our consumers and a vast new market for our companies, but a route in to win over 1.3 billion hearts and minds to our values and way of life. If we walk away from China now our competitors will happily move in, pocketing the gains in jobs and in soft power.

After this pandemic subsides, and this crisis is over, China will matter more than ever for the future of our planet. Turning our backs now and walking off the field might bring momentary gratification but it would not be statesmanship. It would be an emotional spasm, and an egregious abdication of our patriotic duty to stand up for British jobs and British values.

If we want to have any influence on how the next superpower uses its huge economic and political weight, clear-eyed engagement – in our own hard-nosed interest – is the only answer for Global Britain.

James Sassoon served as the UK’s first commercial secretary to the Treasury from 2010 to 2013. He was chairman of the China-Britain Business Council from 2013 to 2019 and has been president of the council since 2019. He sits as a Conservative peer in the House of Lords. This article was first published in the Daily Telegraph on June 8, 2020.