Friend and a slight foe: China Audit unveiled

Brussels bars PRC medical device companies from public tenders; Britain flooded with cheap Chinese goods diverted from US

Observing China is the essential newsletter to understand the UK-PRC relationship, explained in the context of global developments.

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Britain awoke from its post-lunch slumber on Tuesday 24th June to hear the much-awaited ‘China Audit’. The summary? David Lammy, Foreign Minister, concludes that Beijing is indeed a threat to British democracy, but economically, we cannot survive without it. In fact, he quoted Rachel Reeves, Chancellor of the Exchequer, verbatim in her op-ed to The Times in January, stating that ‘not engaging with China is therefore no choice at all’.

For some analysts, the Audit (which clarifies that Whitehall’s approach will ‘always be guided by the UK’s long-term economic growth priorities’) amounts to a ‘re-risking’ of Britain’s national security, instead of ‘de-risking’. In other words, and to use ‘China Watcher’ parlance, it is too soft on the People’s Republic of China (PRC).

But what did others think of the Audit? The Embassy of the PRC to the United Kingdom (UK), certainly did not consider the ‘China Audit’ to be at all soft. The statement it issued focused solely on the parts of the Audit which acknowledged the security concerns of the UK-PRC relationship, labelling these acknowledgements as ‘malicious slander’ and defiantly declaring that it would not capitulate.

It is nigh impossible to satisfy everyone as a politician, but on an issue as complicated as the UK-PRC relationship, the odds are even less.

The PRC also featured heavily in the National Security Strategy (NSS), published on the same day as the Audit, and which the latter fed into. While the Audit mentioned the key areas of security concern, the NSS delved into more detail and better demonstrated His Majesty’s (HM) Government’s ‘clear-eyed’ approach to the challenges which the PRC poses.

While the NSS does not shy away from delineating the many ways in which the PRC undermines multiple parts of life in Britain, there is still a general, unspoken trend that the UK and the United States (US) are diverging on the PRC and Russia, the other authoritarian state of concern. Whitehall, despite acknowledging the unsavoury elements of the PRC’s integration into the UK’s socio-political sphere, makes clear that Beijing’s potential to offer Britain economic growth will ‘always’ guide HM Government’s approach to the PRC.

To understand how London and Washington are diverging on the PRC and Russia, read our report on the ‘special relationship’ between the US and the UK – it dives far deeper than any headlines about the tricky areas the two countries will have to navigate, on top of the many areas which will continue to bind them together. Beijing will be a sticking point in this ‘special relationship’, like a former romantic partner who looms in the background and is too big to ignore.

Welcome back to Observing China.