CCP inches closer to a European HQ in London
New UK treasury minister ‘pro-China’ stance may pose complications; TikTok ban in UK on the horizon
Observing China is the essential newsletter to understand the UK-PRC relationship, explained in the context of global developments.
Last week I wrote an article pondering whether the tone of Rachel Reeves, Chancellor of the Exchequer, when visiting the People’s Republic of China (PRC) amounted to a full ‘kowtow’. Despite her best efforts, Beijing retained its historical imperviousness to the British charm offensive.
Reeves’ demeanour is almost demure compared to the latest curveball thrown by David Lammy, Foreign Secretary, and Yvette Cooper, Home Secretary. On the 14th January, Lammy and Cooper submitted a joint letter to the Planning Inspectorate expressing support for the construction of a new Chinese ‘mega-embassy’ in London, overriding local objections. The current embassy covers an area of 830 square metres and the new one will cover an area of 20,000 square metres. If approved, the new embassy will be Beijing’s largest in all of Europe.
Why is nobody asking why Beijing wants an embassy in London that is 24 times the size of its current one?
Welcome back to Observing China.
1.1 Is the clock ticking on TikTok in the UK?
TikTok, the social media app owned by Chinese parent company ByteDance, was temporarily saved from being banned in the United States (US) over concerns that the company can pass on consumer data to the Chinese Communist Party (CCP). Many analysts believe the app could also be banned in other Euro-Atlantic nations due to the same concerns.
For now, Donald Trump, President of the US, wants to ‘save’ the app, but if he changes his mind again, he will likely exert pressure for allied nations to follow suit. But Darren Jones, Chief Secretary to the Treasury in His Majesty’s (HM) Government, maintained that while it was prudent for the app to be banned on devices used on government premises, the national security threat does not ‘seem’ to extend to civilian users who ‘want to post videos of their cats’.
This logic seems rather fallible. While there is no evidence yet that the CCP has requested data from consumers in the free and open nations (though it legally can), the fact that the app has been banned on government premises amounts to official recognition of a potential threat. Political leaders should remain aware that the target of foreign interference extends beyond government officials.
1.2 Vice President of the PRC to attend Trump’s inauguration
Han Zheng, Vice President of the PRC, will attend the inauguration of President Trump today instead of Xi Jinping, General Secretary of the CCP, to whom the invitation was initially extended. According to reports, members of Trump’s team had advised that the highest representative possible be sent to avoid upsetting the new president. It was intimated that for Trump’s advisers, the ideal representative would be Cai Qi, member of the Politburo Standing Committee of the CCP and Xi’s right-hand man. Trump’s advisers believe Cai to hold much more influence over Xi than either the vice president or the foreign minister of the PRC.
1.3 Beijing sends its largest coast guard vessel into Manila’s maritime zone
On 13th January, the Chinese Coast Guard (CGC) sent the 541 feet long ‘monster ship’ into the maritime zone of the Philippines. In 2012, Beijing seized the Scarborough Shoal and has since continued illegally deploying coast guard vessels closer to Manila’s exclusive economic zone (EEZ). Tokyo expressed concern over Beijing’s aggressive behaviour in the regional waters and the willingness to offer Manila development and security assistance if needed.
1.4 PRC to resume some group tours to Taiwan
Since 2020, Beijing and Taipei have disagreed on how tourists from the PRC could resume visiting the island following travel restrictions during the Covid-19 pandemic. Taipei criticised Beijing for weaponising tourist travel, while the PRC disagreed with Taiwan classifying the country as unsafe for Taiwanese citizens due to the CCP declaring it was prepared to execute ‘die-hard separatists’.
1.5 No tightening of the Belt and Road Initiative (BRI) in Sri Lanka
Beijing has offered to invest US$3.7 billion (£3 billion) in Sri Lanka, in what would be the largest ever foreign investment in the island nation. The most notable project will be a modern oil refinery, constructed under the auspices of the BRI.
1.6 Taiwan concerned about Trump’s Greenland claims
Concern is brewing in Taiwan over Trump’s declarations that he is willing to take Greenland by force if necessary. Analysts in Taipei noticed discussions on social media platforms in the PRC where it was opined that if Trump is rejecting the norms of US diplomacy, it may open the door for a forced annexation of Taiwan with no justifiable backlash from the US.
1.7 Sweet nothings from Beijing
The European Union (EU) will impose anti-dumping duties on imports of the sweetener erythritol from the PRC. An EU investigation found that the sweetener was being sold at unfairly low prices, and the duties will range from 34.4% to 233.3%.
2.1 The China Observatory at Council on Geostrategy published a Primer detailing the CCP’s increasing erosion of civil liberties and religious and political freedoms in Tibet. The paper also makes recommendations to HM Government.
2.2 This paper by the Centre for New American Security considers how the Quadrilateral Security Dialogue (Quad) – made up of Australia, India, Japan and the US – may expand to include the Philippines, given Beijing’s increased aggression in the South China Sea.
3.1 British intelligence services warn against PRC’s proposed London ‘mega-embassy’
The new embassy proposed by the PRC will be opposite the Tower of London, at a site very near a sensitive artery of critical communication cables which British intelligence services say will be at very high risk of being intercepted by Chinese spy operations.
The former Chair of Parliament’s Intelligence and Security Committee joined a cross-party group of Members of Parliament (MP) in writing to the Planning Inspectorate to warn of the security risk posed by the building plans.
Lammy and Cooper justified their support for the new embassy by stressing the ‘importance of countries having functioning diplomatic premises in each other’s capitals’. According to reports, the British Embassy in Beijing has been left in retaliatory tattered disrepair following the delay in HM Government’s decision on the Chinese Embassy at Royal Mint house. This makes one wonder whether HM Government’s burgeoning support for the embassy comes partly from coercion and not solely from wanting to ‘reengage’ with the PRC. Lammy and Cooper’s words speak to an equal need – but the British Embassy in Beijing is said to be barely functioning, while the CCP simply wants to upgrade the current Chinese Embassy in London.
3.2 Eyebrows raised over appointment of new ‘pro-China’ economic secretary
The appointment of Emma Reynolds, Economic Secretary to the Treasury, has raised questions given her stance on dealing with Beijing, as she previously lobbied for fewer restrictions in investments from the PRC.
According to reports, under the previous Conservative leadership, Reynolds voiced support to exclude the PRC from the ‘enhanced tier’ of the Foreign Influence Registration Scheme, a scheme aimed at protecting the British political system from covert foreign influence. The scheme was passed into law, but never implemented, by the previous government and the Labour leadership has not yet brought it into effect.
Sir Keir Starmer, Prime Minister, has refused to say whether Reynolds will be able to make executive decisions on agreements with the PRC. The potential conflict of interest in her specific role as Economic Secretary to the Treasury is of particular importance as the new Labour leadership seeks closer financial ties with Beijing.
4.1 Xinhua news reported that Zheng Zeguang, Chinese Ambassador to the UK, called for greater bilateral cooperation on peace and stability in the Asia-Pacific region, at a meeting held in London on 16th January. Zheng spoke out against ‘unilateralism’ and ‘protectionism’, accusatory terms used by the CCP to refer to the US.
As is typical of government statements from the PRC, there is a lack of specificity. Even if the UK were prepared to collaborate with the CCP on countering ‘protectionism’ in the Asia-Pacific, how, exactly, do they propose the two sides approach it?
4.2 In a phone call with Antonio Costa, President of the European Council, Xi declared that ‘there exists no clash of fundamental interests or geopolitical conflicts between China and the EU’. Who is he trying to convince here? The EU Commission voted in favour of tariffs for electric vehicles made in the PRC and finds itself on the receiving end of an increasing number of export controls from Beijing.
According to the People’s Daily report, Costa conceded that ‘the world needs closer EU-China cooperation to tackle global challenges such as climate change, and to contribute to world peace, stability and development.’
The American publication Politico reported that Brussels may be trying to soften trade relations with Beijing ahead of expected pressure from Trump for the EU to fully decouple its supply chains from the PRC.
The tides are turning in HM Government’s attitudes towards the PRC. It would be helpful if at the very least the ‘China audit’ was published before symbolic moves were made, such as the Reeves trip and support for the new embassy.
Stay tuned while we unravel the rationale over the coming weeks…
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Grace Theodoulou – Policy Fellow, China Observatory
Email: grace@geostrategy.org.uk
If you would like to explore any of the Council on Geostrategy’s PRC-focused research papers, click here to visit the China Observatory.
Thanks for the round-up but but I'm sorry there is little possibility of China having a European HQ in Britain. First and foremost, Britain is out of the EU, and it makes no sense from a Chinese mainland perspective to have a European HQ in Britain. Second, the Chinese ambassadors in Brussels, London, Berlin, and Paris are all at the vice-ministerial level. It's, therefore, bureaucratically impossible to have a London HQ for Europe.