U.K. Weighs Profit vs. Principle as Li Keqiang Visits

Li Keqiang’s three-day visit to the U.K. got into full swing on Tuesday, with the Chinese premier meeting both the Queen and his British counterpart David Cameron. Deals and declarations were announced, covering trade targets, currency, a $20 billion natural gas agreement, Chinese investment in British infrastructure including nuclear power and high-speed rail, educational exchanges and new consulates. Britain had already announced new visa policies to ease visits by Chinese tourists and businessmen. In an article in The Times on Monday, Li explained his intention “to discuss ways to deepen cooperation in various fields and thus spur the growth of our respective economies. Second, to present the real China so as to change misperceptions and ease misgivings; and third, to draw on British perspectives and experience.”

Relations between the two countries grew frosty in 2012 after Cameron met with the Dalai Lama. Successive visits to Beijing by British chancellor George Osborne and Cameron last year seemed to show a thaw, but the prime minister was accused of having “sold the store,” “surrendered,” and “totally capitulated” in order to repair relations, delivering an “embarrassing” and “painful lesson in how not to deal with China.” When a government report in April expressed concern about the state of human rights in China—a topic Cameron had been accused of ignoring in Beijing—China canceled scheduled rights talks. Its Foreign Ministry complained of “irresponsible remarks made about the Chinese political system, rudely slandering and criticizing China’s human rights situation.” The 30-point communique signed on Tuesday expressed an aspiration to revive the rights dialogue, though such talks have in any case been criticized as unproductive face-saving exercises for both sides.

On Friday last week, Chinese ambassador and noted Harry Potter scholar Liu Xiaoming warned Britain to tread carefully around the subject of human rights, or risk losing out in its economic ties with China. From Reuters:

“It’s normal for countries to have their differences here and there,” he said. “What’s important is how we handle the differences.”

He said Beijing had been angered by a British Foreign Office report in April that listed China as “a country of concern,” and said Britain had observed increased curbs on freedom of expression, association and assembly in 2013.

“We think this report was biased against China,” said the ambassador, adding it had “missed the big picture.”

“We also have some concerns about human rights here (in Britain). I don’t think pointing the finger is the way. Many opportunities were missed in the last year and we all know the reasons behind it.” [Source]

He warned that Britain had lost its place as the most important European nation in Chinese eyes, sliding behind Germany and France. The Independent’s economics editor Ben Chu, though, argued that with China seeking to diversify its foreign investments and internationalize the renminbi, “British ministers can afford to hold their heads up with their Chinese counterparts”:

It’s true that Britain does less trade in goods with China than those other two major European nations. Nevertheless, there is a large amount of mischief in this comment from the ambassador, doubtless designed to play upon British insecurities. The reality is that, in financial terms, China needs Britain just as much as Britain needs China.

[…] China has been seeking, for some time now, to put more of its national wealth in real productive assets abroad. This means acquiring stakes in Western energy and infrastructure firms and other, smaller, companies. But China has run into big obstacles investing in the US and Europe. In 2005, a bid by a Chinese oil company to acquire a Californian energy firm failed amid opposition in Congress. And while Germany and France have been willing to sell and buy goods from the Chinese they, too, have been resistant to approving Chinese ownership of domestic assets.

This is where Britain comes in. The Coalition wants to boost domestic infrastructure investment, but because of its austerity commitments it cannot spend money itself. So it has rolled out the red carpet for the Chinese in the hope they will help to fill the gap. […] [Source]

An editorial in The Guardian similarly argued that Britain could seize profit without abandoning principle, referring to the ill-fated Macartney trade mission of 1793.

[…] Up to £18bn in Chinese investment in Britain’s energy, transport and financial sectors is thought to be coming our way. Yet the cultural misunderstandings observed in the 18th century have their parallels in the 21st, and they relate, as then, to the contradictions between economic and political power. The problem then was that Britain expected its political power to translate easily into trade advantage. The problem now is that China expects its economic power to translate easily into political advantage. It wants to use it to close off criticism of its human rights record, its treatment of minorities and of non-Han regions, its aggressive actions in the South China Sea, and its tight control of the news and information available to Chinese people.

[…] Britain wants Chinese investment,and we want to be China’s main gateway into Europe. But China’s economic leverage here is certainly not so very great that we have no choice but to compromise what should be our principles. If, as one report has suggested, we gave in to a Chinese demand that Mr Li should have an audience with the Queen or else they would cancel the visit, that was a mistake. Concessions on protocol, as Lord Macartney no doubt knew, can lead to more substantial compromises down the line. We do not need to make those compromises and we should not do so. [Source]

Ambassador Liu denied that any such demand had been made. Meanwhile, Li was asked about Liu’s comparison with France and Germany on Tuesday. He replied that “there’s an old saying in China that when you are at one mountain you shall sing their local song. I am in the UK and I’d say that I hope China-UK relations can become the driving force of China-EU relations.”

Despite Liu’s warning, Deputy Prime Minister Nick Clegg spoke out about rights abuses on Monday, while reaffirming his belief that economic ties would eventually bring improvement. From Nicholas Watt at The Guardian:

Speaking at the launch of the first phase of the Liberal Democrat manifesto for the general election, the deputy prime minister said: “We can’t ignore the large-scale and systematic human rights abuses which still continue in China to this day [and] the very widespread use of the death penalty.”

Clegg said China was embarking on “an extraordinary journey”. But he added: “We have seen economic transformation on a scale possibly unheard of in the modern world where millions of people have become economically emancipated but where they are still politically shackled to a doctrine which is a one-party state communist doctrine which is the antithesis of the kind of open, democratic society that I believe in.”

Despite this background Britain would still have “very productive discussions” with the Chinese leadership and would build up strong commercial links. Clegg added: “It certainly doesn’t mean that we should somehow commercially sever our ties because in the long run my view is that commercial prosperity in China, economic transformation in China will lead to an ever increasing pressure for social and political emancipation as well. […”] [Source]

The BBC’s Carrie Gracie asked Li about Clegg’s comments at a joint press conference with Cameron on Tuesday. (“To show respect for human rights,” Li made a point of inviting questions from female journalists.)

The Chinese premier said his country was protecting and advancing human rights in line with its constitutional obligations while “choosing our own path in accordance with our own national conditions”.

“Over the last 30 years, China has lifted 300 million people out of poverty,” he said.

“I believe there are diverse dimensions to the issue of human rights and countries at different stages of development, with different historical and cultural background, may see this issue of human rights from different perspectives.” [Source]

Clegg was not the only one to raise concerns.

Sky News’ Richard Suchet reported that at least five groups awaited Li outside Downing Street, including a hundreds-strong contingent of Chinese students and others waving Chinese flags in welcome:

But who organised the delivery of their water bottles? Who paid their band to turn up and drown-out everybody else? Before she was silenced by an older gentleman, one young lady told Sky News the Chinese embassy were the ones to thank.

On the other side of no-man’s-land (a five-metre gap, patrolled by the Metropolitan police) stood a group of 50 or so protesters, raising awareness about China’s persecution of the Falun Gong.

[…] The Free Tibet campaign and its subsidiaries were flanked by campaigners against Chinese expansionism in Eastern Kazakhstan, and against the nation’s oil exploration in Vietnamese waters.

[…] The cacophony of noise that echoed through Whitehall all morning quickly faded after Mr Li’s arrival. The pro-China rally was over within minutes – the PR war was over as far as they were concerned. [Source]

The embassy had also arranged a traditional lion dance troupe with drummers to drown out the protests, London’s Evening Standard reported:

Members of a Chinese lion dance team from Medway in Kent said they had been contacted by the Chinese embassy to welcome Mr Li.

Spokesman Ashley Davis, 66, said: “They’ve asked us to come along today because it is a big day for the Chinese with the premier Mr Li here. We have been asked to greet him as he arrived at No 10.

“But we didn’t know what time he was arriving so our performance has gone on for rather a long time.” [Source]

After running the Tibetan gauntlet, Li was asked at the press conference for his views on Scottish independence. From The Guardian:

Li was asked about the referendum at a joint press conference with David Cameron in Westminster. Li said he wanted a “strong, prosperous and united United Kingdom”.

He added: “I believe that the United Kingdom can stay at the forefront in leading the world’s growth and development and also continue to play an important and even bigger role for regional stability and global peace.” But he added: “We certainly respect the choice you make.”

A spokesman for the Yes Scotland campaign said: “Unlike people in China, people here will have a free and democratic vote on 18 September when they will decide on the future of their country. We believe that decision will be yes.” [Source]

Meanwhile, the future of Hong Kong was also at issue, following the publication last week of a white paper asserting Beijing’s supremacy there. Some in the city were angered and disappointed that Cameron did not challenge the document, saying it undermines the terms of the handover agreement made between Britain and China thirty years ago. From Patrick Boehler and Jeffie Lam at South China Morning Post:

The white paper released last week emphasised Beijing’s “comprehensive jurisdiction” over Hong Kong and said the city’s autonomy was subject to the central government’s authority.

That sparked concerns that the high degree of autonomy, guaranteed to Hong Kong in the Sino-British Joint Declaration of 1984 and the Basic Law, was at risk.

Democratic heavyweight Martin Lee Chu-ming, who helped draft the Basic Law, described Cameron as “very irresponsible” for not speaking up for Hongkongers or the Joint Declaration.

[…] For Steve Tsang, director of the China Policy Institute at Nottingham University, the wording reflects British sensitivity towards Chinese concerns over the former colonial power’s influence in the SAR.

“London is aware that Beijing sees a conspiracy behind any overt British ’interference’ in any aspect of development in Hong Kong, particularly if it is something disapproved of by Beijing,” he wrote in an email.

“This limits what the British government can say and do.” [Source]