Delicate tango of UK and China
London and Beijing nurture a long, oft complicated relationship
Like two long-lost lovers brought together by Facebook, Britain and China have rekindled a burning desire. To some, Britain is coming cap in hand for cash to repair its nineteenth century infrastructure. To others, China seeks affirmation as the newly rich would seek a titled estate. As the Middle Kingdom comes to the United Kingdom, the reality is much deeper than that.
This is a momentous stage in one of the longest geopolitical relationships in industrial times. Britain was the first major country to recognise the People’s Republic in 1949 and the first to join the China-sponsored Asian Infrastructure Investment Bank.
Britain knows China. Morrison, Legge, Liddell, Needham, Menzies each in their way intimately understood China and that accumulated wisdom certainly assisted the tricky and ultimately wildly successfully negotiations for the hand back of Hong Kong.
Forgotten is the hurt of the powerful barbarian imposing “Unequal Treaties” on China, for with the British merchant adventurers followed a flood of people who for 100 years came to love China and the Chinese people. They ventured into distant parts, often missionaries with families, learning the local dialect, wearing Chinese dress, bringing rudimentary but modern health care, education and administration.
A great many left their bones in the red dust of Chinese soil. Those that did not left their hearts in China. Tens of thousands of young Britons lie in military cemeteries skirting China’s borders in the cause of a united China whose boundaries exist today. Britain and China are close.
The British do a good official welcome; the Royalty, the mounted Household Cavalry, the red carpet for the Red Flag. Britain’s open arms have melted the panda’s heart. However, it is a lesson in Realpolitik; this move by the Conservative Government is quite in line with Britain’s longstanding policies on the world and economics.
Britain has a habit of invention - soccer, tennis, cricket and most recently painful rugby were codified for the world, only to get thrashed by later adoptees. Britain was a leader in steelmaking, shipbuilding, textiles, heavy industry, cars, aviation; now finding stronger homes elsewhere. The country has but 65 million people, a rounding error against China’s 1.3 billion, but Her Majesty is still head of a Commonwealth of 2.3 billion people.
A politically connected Chinese friend once confided, “I don’t understand why the UK would allow Scotland to break away and lose 1/3 of its landmass; China wants to keep every single speck of an island”. The country seems both confused and yet successful because of it.
The British have a liberalism that translates into a strong sense of fair play. It has allowed American, Chinese, French and Swiss companies to buy the commanding heights of the British economy, even though the reciprocal deal would not be permitted.
This very liberal economic policy has made London the unparalleled capital of global business. It is not surprising for the Chinese to want to be part of that as the Middle East, Africa, the Russians, the Europeans and the Americans are. The London property, financial, medical and legal markets are global - and growing faster than ever.
Perversely, the experience of being the capital of a global empire means that Britain is not afraid for its people to make cars rather than own the company, to provide the long-term services rather than take short-term risk on the assets.
This policy provides an almost Maoist continual revolution to the economy. Lose 5,000 jobs to Chinese oversupply in the ageing steel industry one week; gain them the next week through Chinese investment in future technologies. It boosts Britain’s intellectual property so the public (paid for) schools are world class, so are the arts, so is professional training - all encouraged by the world’s use of English as the lingua franca.
The Xi’s had a sleepover in Buckingham Palace, combining two venerable institutions under one roof, Queen Elizabeth and the Chinese Communist Party - perhaps an opportunity to put the world to rights in their pyjamas, whilst downing a small Scotch.
Away from the fireplace, Britain continues its liberal economic policy of regeneration and China takes on an aura of old money; it has arrived. The Silk Road ends at the Atlantic – only Genghis Khan did that.
But Britain’s red carpet is not one to walk over with muddy boots. The liberal democracy and the aggressive London press will keep British politicians on their toes. There is no chance that China will drive a wedge in the special US/UK relationship. The Dalai Lama may be temporarily forgotten but Ai Wei Wei is the hottest exhibition in London. It is a delicious irony that Xi praised the Mother of Parliaments inside the House of Lords.
Richard Harris is chief executive of Port Shelter Investment Management