Jim O'Neill Photo: Sun Wei/GT

 

Editor's Note:

The UK has taken a back-and-forth attitude toward China. It has followed the US's campaign against China. Why has Britain changed its course in such a short time? What should be a wise choice for the UK when pressured by the US to pick sides? Jim O'Neill (O'Neill), chair of British think tank Chatham House and former British treasury minister, recently shared his views with the Global Times (GT) in a written interview.

GT: The UK recently reversed course on Huawei's involvement in its 5G network, announcing it would ban Huawei from its 5G systems in a decision to please the US. Why has the UK taken a back-and-forth attitude toward the Huawei issue and decided to change course? 

O'Neill: On one level, it is all quite straightforward, as some UK ministers have either said, or hinted. The UK made its own position clear with its previous policy on the use of Huawei, but the change in US policies, including the semiconductor ban, led to a genuine change of view from our British security experts. In this regard, it was the UK security experts informing the government based on updated knowledge, and the UK responding accordingly. In this sense, I don't think it was done to please the US. But the UK perhaps had little choice because of the decision the US had decided, which of course, has pleased the US.

GT: Some people in Britain who oppose engagement with China called the "golden era" under Cameron administration a "golden error." They accused the "golden era" policy with China of putting economic interests above security concerns. How do you view these voices? To what extent have they influenced the UK's China policy adjustment?

O'Neill: I think there is a specific, broader issue. On the specific, it is quite clear that there are a significant number of back bench conservative MPs as well as some opposition Labour MPs who simply don't believe the UK should have pursued the golden relationship that happened in 2015/2016. Some of them are very emotional about many matters, often see Britain through a rather colorful lens, influenced by our history, and certainly, if not so aware about economics, don't value economics as much as security issues and democratic values.

I don't share the balance of judgments they make, not surprisingly because I am an economist. In the last decade, world real GDP rose by 3.7 percent, compared to just 1.7 percent in the G7 countries (some of that of course, boosted notably by trade and investment with China). If we want trade only with countries that share just our principles (assuming we can define them!), then our growth would be even weaker, plain and simple. Many either don't understand this, or don't care.

GT: You said that the impulse to isolate UK from China is like "weird self-imposed dilemmas" in your interview with the Financial Times. Can you elaborate on the idea? Has the UK prepared for, or can it afford, detaching itself from China?    

O'Neill: Linked to what I have just said, the whole purpose of Brexit was partially explained as being able to pursue more independent trade deals all over the world. One took for granted, that included China, the biggest influence on global GDP for the past 20 years. So now, the UK has deliberately chosen to weaken its trade relationship with the EU, and now is adding to that problem, by weakening ties with China, probably. It doesn't seem as though, at least economically, the vision Global Britain has yet any clear positive narrative.

GT: Is the UK's decision on China being influenced by the US? Pompeo urged the UK to join a coalition against China during his recent trip to the UK. What do you think should be the wise choice for the UK?   

O'Neill: The UK has tried - at least until the COVID-19 pandemic - to maneuver a neutral to independent stance, where it can get the best it can from its relationship with the US, as well as China, and others. What is clear is that the US is trying to persuade its democratic allies to join its position on China, which of course, is something we should be careful about. But it isn't easy given the past "special relationship," and to some extent, frankly, China has not made it easier, given the historic sensitivity to Hong Kong. This has resulted in fresh pressure on the government from its back benches, and allowed other issues to become heavily discussed in the media, including technology and of course, Western China. I do think the UK would like to pursue something closer to the golden relationship but it's not so easy given what is going in each of the US, and China, and especially between them both.

GT: While it seems Britain is following the US' lead to get tough on China, the EU has displayed a relatively independent stance. Given the difference, will Britain lose more economic opportunities? 

O'Neill: I have explained how I think the UK finds itself in this position. As far as the EU is concerned, there is a more nuanced position, but I would note that it isn't universal inside all EU countries. Some have differing views, but of course, it goes without saying that the EU, as a big exporter, especially Germany, thinks a lot about trade relationships, and perhaps prioritizes these higher than the UK.

GT: China is supposed to be an important partner of Britain in fields such as economics and trade. If the relations continue to deteriorate, how will it influence the British economy, especially amid the pandemic? 

O'Neill: Obviously the UK has somehow managed to have one of the most disappointing health responses, and now, is seemingly suffering one of the weakest economic responses also. It is quite worrying, but frankly, I think this reflects long existing British problems, which relate to very weak productivity, as well as a judgment about our place in world issues - that is out of kilter, with what our ongoing economic performance really justifies. Along with this, there is urgency for a post-Brexit government to develop a cohesive and credible Global Britain narrative.