Britain and China: strange bedfellows?

Photo: Foreign and Commonwealth Office/Wikimedia Commons

By Loke Hoe Yeong

One year ago, Britain was desperately trying to be China’s best friend in the West, presumably to build up its trade ties with the world’s second largest economy in the case of British voters choosing to leave the European Union (EU).

Now that there is no turning back from Brexit, following the referendum of 23 June, why then has the new British government chosen to delay a key deal with China, to the shock and surprise of all parties involved?

On Friday (29 July), the new government of British Prime Minister Theresa May intervened a mere two hours after the French energy company EDF announced that its board had voted to approve the construction of Hinkley Point C, a nuclear power plant in Somerset, south-western England. EDF was expecting to sign the contracts for the plant with China General Nuclear Power Corporation (CGN), but was halted by the British government.

Both EDF and CGN were shocked. CGN issued a calm-sounding statement, saying:

We respect the new government’s need to familiarise itself with a project as important to the UK’s future energy security as Hinkley Point C and we stand ready to help the government in this respect […] CGN remains committed to delivering this much-needed nuclear capacity with our strategic partners, EDF, and providing the UK with safe, reliable and sustainable energy.

In reality, CGN and the government of China, which is very much behind the deal, is unlikely to be pleased at all.

The Hinkley Point C nuclear power point will provide 7% of Britain’s electricity supply. Scheduled to commence operations in 2025, it has been estimated to last for 60 years. It is possible that further delays will result from the postponement of the British government’s proposal of the deal.

For sure, there were a host of concerns – and resistance from many groups in Britain – as to safety concerns surrounding Hinkley Point C. Costs had also been spiraling, after the initial budgeting for the project.

The greatest sensitivity must have come from China’s involvement in the project. There has been speculation that China build in weaknesses and loopholes into the nuclear plant’s computer systems, which would give them ultimate control over the nuclear facility and put Britain and its households at the mercy of China.

But if that was such a major concern, why was the project, a collaboration between Britain, a French company and a Chinese company, allowed to progress to such a late stage, before the plug was pulled? And moreover, why was it pulled at the moment, after the Brexit vote last month, that Britain would need to cement its trade ties with a major power like China?

US: upset about Britain’s “constant accommodation” of China

The truth is that Britain’s and China’s burgeoning relationship over the past year was always met with awkwardness. Now with a new British prime minister taking over the helm, her new government has reserved for itself the right to review the programme and policies of the previous government – even if Theresa May and David Cameron were never known to have disagreed on anything of such major consequence.

The milestone reached by the two countries was when Britain signed up to be a founding member of China’s Asian Infrastructure Investment Bank (AIIB) dubbed as China’s version – and challenge – to the World Bank. The $50 billion bank was designed to provide infrastructure funds to the Asia-Pacific region.

This greatly upset the United States, which naturally viewed China’s plans with suspicion from start. It regarded the AIIB as China’s challenge to the world order of international rules that the US had underpinned since the end of World War II, with the establishment of the Bretton Woods system.

The Obama administration did not hide its true feelings, even when it concerned its special ally, Britain. One of its officials said: “We are wary about a trend [on the part of Britain] toward constant accommodation of China, which is not the best way to engage a rising power.”

Britain’s move to join the AIIB came at the apex of the plan of George Osborne, the previous Chancellor of the Exchequer and close confidante of David Cameron, to strengthen ties between the two countries. He spoke of a “golden decade” in Sino-British relations.

China was flattered by the attention. On the eve of a state visit to Britain last October, Chinese President Xi Jinping praised Britain’s “visionary and strategic choice” to become its best friend in the West.

This had harmed Britain’s reputation among human rights groups, which typically raise a host of issues with regard to China. In particular, such groups found that London’s comments over the debates on democracy in Hong Kong were more “muted” than before.