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G20: What does China really think of Britain?

Do they secretly hate us? Is it a mistake to irritate them? Why are they so keen to invest in Britain?

Ben Chu
Friday 02 September 2016 16:34
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Premier League football is popular in China
Premier League football is popular in China

The G20 conference will kick off in Hangzhou, China on Sunday.

Relations between the host and the UK will be unusually strained, thanks to Theresa May’s surprise decision in July to push the pause button on the £18bn Hinkley Point nuclear deal.

Liu Xiaoming, the Chinese ambassador to the UK, has warned that “right now, the China-UK relationship is at a crucial historical juncture.”

Attitudes to China here in Britain are divergent. Some say Britain is in danger of compromising its values and its national security by getting close to a China still governed by an authoritarian Communist Party. Others insist we would be idiotic to spurn a partnership with what is still the fastest-growing economy in the world – and that we risk doing severe damage to our economic prospects by irritating Beijing.

There have been some suggestions that if Hinkley Point does not go ahead, Bejing might refuse to co-operate on a post-Brexit UK-China free trade agreement.

Our national sense of uncertainty about China’s state of mind was perhaps summed up by the Margaret Thatcher biographer Charles Moore who wrote recently in The Spectator: “If Britain stays ahead of China in the Olympic medal table will this make China tougher about the Hinkley Point deal – to get revenge – or softer, because China respects only superior power?”

So what does China itself really think of the UK?

Does China dislike us?

If you believe some of the noises from Beijing, Britain is regarded with a condescending sneer by the Chinese. In 2013 the Beijing-controlled Global Times newspaper said that “the UK is not a big power in the eyes of the Chinese. It is just an old European country, apt for travel and study. This has gradually become the habitual thought of the Chinese people”.

Where is this animosity coming from?

History plays a part. The British Empire treated China brutally in the 19th century. The Chinese emperors were resistant to trade, particularly to imports of British opium grown in India. Britain essentially battered the Chinese into submission with its superior military technology, forcing the country to open up in two Opium Wars.

The Chinese saw Britain’s violent incursions as the beginning of a “century of humiliation” in which China was carved up by stronger foreign powers. This history is still taught in all Chinese schools and often bought up by officials. The fact that Hong Kong – taken in the Opium Wars – remained a British colony until 1997 was a constant reminder of this unpleasant imperial legacy.

But that’s all just history now isn’t it?

Of course it is. The events of the Opium Wars have zero bearing on the lives of ordinary Chinese people today. And the Chinese went through agonies in the 20th century at the hands of fascist Japanese invaders and the monstrous Mao Zedong that were many times worse than anything they suffered at the hands of imperial British generals.

Yet the “century of humiliation” rhetoric endures, thanks to its value as a plank of the Communist Party’s nationalist propaganda. A noisy minority of ultra-nationalist Chinese also draw upon and feed the narrative of constant British treachery.

By the way, that 2013 Global Times editorial seems to have been a response to David Cameron’s decision to meet the Dalai Lama in 2012, which infuriated the Beijing authorities and sent UK-China relations into the deep freeze for a time.

If China hates Britain, why does it want to invest here?

According to some in this country the answer is, of course, that Beijing secretly wants to take control of Britain’s infrastructure. There has been much talk about the idea that China wants to build weaknesses into the computer system at Hinkley Point so it can shut off our power supplies at will. This is a theory that the Prime Minister's own key adviser has publicised. Yet this is almost certainly a paranoid fantasy.

The reality is that China wants to invest in Western economies because it has accumulated a vast pile of foreign cash – worth more than $3 trillion – that it cannot invest at home because of the grossly unbalanced way it has been running its domestic economy.

At the moment this hoard of foreign cash is stored largely in US government debt, which is generating a virtually zero return. China has made it a strategic economic goal to direct much more of this money into Western infrastructure (such as nuclear power, telecoms and water) and also the shares of foreign companies, where returns are higher.

So why Britain?

Because Britain is one of the few big Western economies that was (until recently) prepared to accept Chinese investment with open arms. America and the rest of Europe have been wary of Chinese offers of investment. America’s Congress rebuffed a Chinese oil company’s bid for a US rival in 2005. And Australia recently blocked a proposed Chinese investment in its electricity network.

Yet Britain has allowed China’s sovereign wealth funds to buy a stake in Thames Water and the Chinese telecoms giant Huawei provides key technology for Britain’s landline and phone networks. And there were high hopes in Beijing for funding the Hinkley Point nuclear project alongside the French state-owned EDF – and the associated option of China of building more plants in the UK on its own. China was hoping to develop a lucrative niche as a builder of new generation nuclear power stations for export.

The previous Chancellor, George Osborne, also wanted Chinese cash to fund his Northern Powerhouse project. This co-incidence of mutual interest was largely why Chinese and UK officials were recently describing British-China relations as entering a new “golden era”.

And what about football clubs?

A very good example of the UK’s so-called “soft power” appeal in China. The Premier League is immensely popular in the Far East, even China’s president Xi Jinping is a fan. He visited Manchester City last year on the state visit and not long after a Chinese consortium took a £265bn stake in the Abu Dhabi-owned club. A Chinese businessman called Tony Xia has bought newly relegated Aston Villa. Liverpool FC is reported to have been the subject of a £700m takeover bid from China Everbright, a state-backed financial giant (although this has now been denied).

One view in China is that this investment in UK football clubs is a way for Chinese business leaders and officials to curry favour with Xi Jinping. It is also probably motivated by the desire to increase foreign investment wherever possible.

There are a lot of Chinese students here too aren’t there?

When the Global Times said the UK was “apt for study” it wasn’t joking. In 2014-15 there were 89,540 Chinese students in Britain, easily the biggest single national overseas source of students. Given overseas students pay even higher fees than natives, they are an immensely important source of revenue for universities. British universities are popular with the Chinese because of the quality of their teaching.

Britain accounts for four of the top 10-rated universities in the world and 10 of the top 50. Chinese parents may have been raised on a diet of stories of “national humiliation” at the hands of the British army but when it comes to choosing an education that will increase the prospects of their children they recognise the quality Britain has to offer.

Despite the periodic bouts of anxiety here in the UK about China’s supposedly brilliant school system, a great many Chinese families would send their children to school here in Britain too if they could.

So where does that leave us?

Ignore the extremes. The Chinese people do not revile Britain, despite the tone occasionally adopted by the state media. Most ordinary Chinese admire our higher education system and enjoy Premier League football. They’re increasingly interested in visiting as tourists, too.

The Beijing authorities do sometimes make anti-British noises that dredge up the Opium Wars but they generally appreciate, in a practical manner, they have more chance of achieving their foreign investment aims in the UK than elsewhere in the West.

Yet at the same time also discount any talk of a “golden era” love-in. The relationship between any British government and the authoritarian Chinese communist party will always be essentially a transactional one because of their fundamental differences over human rights and democracy.

Ben Chu is the author of Chinese Whispers: Why Everything You’ve Heard about China is Wrong

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