Grand Committee
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China: Security and Trade (IRDC Report)
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Baroness Anelay of St Johns
That the Grand Committee takes note of the Report from the International Relations and Defence Committee The UK and China’s security and trade relationship: A strategic void (1st Report, Session 2021-22, HL Paper 62).
Baroness Anelay of St Johns (Con)
My Lords, I am pleased to present our report, The UK and China’s Security and Trade Relationship: A Strategic Void, to the Committee today. I thank members of the International Relations and Defence Committee and our staff, including our specialist adviser Dr Yuka Kobayashi, for all their hard work in producing this report.
The UK-China relationship is complex, of course. It has seen periods of both co-operation and confrontation. When David Cameron was Prime Minister, the focus on economic relations with China was characterised as a “golden era”, but tensions then rose rapidly as a consequence of increased concerns about matters such as security challenges, the imposition of the draconian Hong Kong national security law, and allegations of genocide in China’s Xinjiang province. Against that background, we launched our inquiry and published our report just over a year ago.
The central argument of our report is that the Government do not have a clear strategy on China, despite the shift in relations over the last few years. We found that the attempts made by coalition and Conservative Governments since 2010 to navigate complex interactions between trade, security and human rights had led to inconsistencies and uncertainties. We concluded that there was no clear sense of what the Government’s strategy was towards China, or indeed what values and interests they were trying to uphold in the UK-China relationship.
The Government claimed that they had set out their strategy in various speeches from time to time. We concluded that these did not provide clarity. In our view, the Government seemed to be
“using a policy of deliberate ambiguity to avoid making difficult decisions that uphold the UK’s values but might negatively affect economic relations.”
The committee therefore called upon the Government to produce and publish a “single, coherent China strategy” and a plan for how they would execute that strategy in the future.
The Government’s response did not confirm whether they would publish a written strategy on China. Instead, they referred us to the integrated review of security, defence, development and foreign policy. However, the IR simply alludes to the tension between balancing economic engagement with China with the need to uphold UK values and national security. It does not give any indication about how this tension will be resolved.
During this summer’s leadership contest, the Times reported that my right honourable friend the Prime Minister, then the Foreign Secretary, would class China as a “threat” to national security for the first time. However, the reporting was light on details—it was not clear what classing China as a “threat” would mean in practice, for example—and no further announcements have yet been made on this matter since the Prime Minister took office. What further details can my noble friend the Minister supply about the Government’s plans in this area?
I note that the Government have pledged to update the integrated review, saying that the updated review
“will ensure we are investing in the strategic capabilities and alliances we need to stand firm against coercion from authoritarian powers like Russia and China.”
I welcome the idea of updating the IR, but rumours are going around that it will not appear until next May. In the current volatility of events, one suspects that it may be even further delayed. Will there be any consultation on the key issues before the report is published?
I turn now to five specific issues: Taiwan; supply resilience; human rights; Chinese influence on UK universities; and, finally, the implications of China’s stance on Russia’s illegal and unprovoked invasion of Ukraine.
Our report argued that any assessment of China’s threat to the UK should take into account both the probability and likely consequences of conflict in Taiwan. We argued that the UK’s interests would be directly threatened, and concluded that:
“The uncertainty over the future of Taiwan therefore represents a major risk to the UK.”
The Government’s response to this section of our report provided limited information. It merely stated that the Government
“support a peaceful resolution through constructive dialogue”,
and that
“the numerous Chinese military flights at the beginning of October”—
in 2021—
“near Taiwan were not conducive to peace and stability in the region.”
It was astonishing that there was not a single reference to Taiwan in the integrated review.
Last weekend, the five-yearly Chinese Communist Party congress opened in Beijing. It is expected to endorse an unprecedented third five-year term for Xi Jinping as party general secretary—the de facto President. On the very first day of that congress, he said:
“We insist on striving for the prospect of peaceful reunification with the greatest sincerity and best efforts, but we will never promise to give up the use of force and reserve the option to take all necessary measures.”
I understand the diplomatic sensitivities on this matter but would be grateful if my noble friend the Minister can provide an analysis of the UK’s assessment of risks and a potential response to further developments in Taiwan.
The committee also explored the issue of supply chain resilience and vulnerability in the context of the UK-China relationship. The passage of the Telecommunications (Security) Act 2021 was a clear sign of the Government’s concerns in one area, but these vulnerabilities are much more widespread across the UK economy. We were particularly concerned about vulnerabilities exposed during the pandemic relating to the procurement of PPE and lateral flow tests. In subsequent correspondence, the Government confirmed that, as of 10 January this year, the total cost of lateral flow tests from China and procured by NHS Test and Trace or the UK Health and Security Agency was £5.8 billion.
Of course, it is important that the UK engages with China economically, and our report highlights a number of opportunities for UK businesses, particularly in the services sector. It is also vital to co-operate with China on global challenges, including public health and climate change—a subject on which my noble friend the Minister has particular expertise. This engagement with China should not, however, come at the cost of upholding the UK’s core values, including on human rights and labour protection—values which China does not share.
In April last year, a Motion was passed in the other place declaring that Uighurs and other ethnic and religious minorities in Xinjiang are suffering crimes against humanity and genocide. Our report stressed that the question of how to balance economic engagement with human rights must be front and centre of the Government’s strategy on China. We concluded that the Government cannot “sit on the fence” on this issue, and that they must not tilt the balance towards preserving economic relations at the expense of human rights.
I am pleased to say that the Government’s response indicated that they agree with the committee’s position in this area. In subsequent correspondence, the Government also confirmed that
“serious concerns about human rights violations in Xinjiang naturally inform our position towards China”.
I would therefore be grateful if my noble friend the Minister could give a practical example of how it informs our position What is the effect?
There has been increasing concern that British universities could be a target for technological espionage and that Chinese students in the UK could be put under pressure by the Chinese authorities. Clearly, the Government should seek to maintain the role and popularity of British higher education among Chinese students, but we recommended that the Government and the higher education sector should take steps to ensure that Chinese students can maintain freedom of research. The Government’s brief response to this recommendation did not, however, outline the steps that they intended to take. Moreover, when we raised this with them in subsequent correspondence, they referred us to the measures that they are taking through the Higher Education (Freedom of Speech) Bill, shortly to go through its next stage in this House. However, the relevance of that Bill to the specific issues facing Chinese students is not clear: the pressure they are facing comes from outside, from the Chinese Government, not from within the UK.
The Bill had its Second Reading on 28 June this year when several Peers raised specific concerns about China’s influence and pressure. When my noble friend Lord Howe wound up the debate for the Government, however, I could not find a single reference to China in his remarks. Can the Minister therefore provide clarity on the steps the Government are taking to protect Chinese students from political pressure from outside the UK and the role, if any, that is played by the Higher Education (Freedom of Speech) Bill in providing that protection?
Russia’s illegal and unprovoked invasion of Ukraine dominates most of the immediate foreign policy of western leaders, which is of course wholly understandable. It is vital, however, that we do not divert our attention from the activities of the People’s Republic of China, which could be viewed as the biggest long-term threat to our economic and national security. For its part, China has refused to openly condemn Russia’s invasion. It has opposed economic sanctions on Russia. It has abstained or sided with Russia in UN votes on the war. The new NATO strategic concept document agreed earlier this year raised concerns about China’s “deepening strategic partnership” with Russia.
However, China’s support for Russia has not yet been full-throated. As far as we know, it has not provided Russia with significant military assistance and, at the recent meeting of the Shanghai Cooperation Organisation, President Putin admitted publicly that China has “questions” and “concerns” about the war. How does China’s position on Russia and Ukraine inform the UK’s own position on China? I would be grateful if the Minister could set out the Government’s thinking in this regard.
Engaging with China will always be an enormous challenge, given its economic weight and its fundamental political differences from us. It would be unwise to think that there will be any softening of President Xi’s hard-line policies of competition with western democracies. It is essential for the UK to be aware and wary of the implications of that for our own security, trade and prosperity. The UK’s strategy for its relations with China needs more clarity and certainty than it has had until now. Trade-offs need to be confronted and ambiguities resolved. I hope that the Government will now provide more clarity and fill the strategic void that has beset the UK’s China policy over the last decade. I beg to move.
Baroness Blackstone (Lab)
My Lords, it is a great pleasure to follow the chairman of the committee, the noble Baroness, Lady Anelay. Undoubtedly, one of the most difficult areas of UK foreign policy is how it approaches relations with China. China is such an important global player that to shirk defining how we relate to it would be a serious failure of international policy-making.
In criticising the Government’s failure to define a coherent strategy, the committee did not underestimate how difficult it is to produce one. Moreover, no strategic position can be set in stone. Rethinking and updating will regularly be required. The invasion of Ukraine by Russia, which happened since the committee wrote its report, is the most obvious example of change that needs to be taken into account. My first question to the Minister is this: what steps are the Government taking, either bilaterally or multilaterally, to engage with China on the threat to long-term global security of Russia’s invasion of Ukraine? China probably has a unique potential to influence Russia. What assessment, if any, has been made of how to maximise this potential in the interests of peace?
My second question concerns the shocking human rights abuses against the Uighurs in Xinjiang province. Can the Minister give an up-to-date account of what is happening there now, including any recent developments in the work of the international community to condemn the policies of the Chinese Government? After all, Parliament has rightly claimed that what the Chinese Government have done in Xinjiang province are crimes against humanity. What progress is being made in getting the Chinese to withdraw the sanctions they have imposed on British parliamentarians and lawyers—including the noble Lord, Lord Alton, who is a member of the Select Committee—for criticising the Chinese authorities and using their right to freedom of speech? The Chinese argument that the international condemnation of the inhumane and repellent system of surveillance is unwarranted interference in China’s domestic agenda is clearly absurd.
I turn to some of the issues concerning our economic, trade and cultural relations with China. We cannot turn our back on engagement with a country with the second-largest economy in the world, which is likely to overtake the USA and become the largest within two decades. After all, China is the UK’s third-largest trading partner. As a member of the G20 and the UN Security Council, it is also a hugely important player in global security and the global economic order.
With respect to multilateral economic negotiations with China, the committee highlighted in its report the importance of World Trade Organization reform, where the role of China is crucial. It welcomed the Government’s intention to play a part in the WTO’s strengthening and reform, but regretted that it said so little about how it would do so. Can the Minister say what the Government have done so far and what their future intentions are, focusing on how they would support in this area our economic and strategic objectives with China?
The committee took the view that we should use our soft power wherever possible in engaging with China—a position I strongly endorse. The UK has one of the strongest higher education systems in the world, with many universities excelling in research, teaching or, in some cases, both. This is reflected in the very large number of international students choosing to study here, including those from China. While no single university should have so many Chinese students that the composition of its student population becomes very unbalanced—nor, incidentally, should they be admitting students with poor written and spoken English, as sometimes happens with Chinese students—there are benefits to the UK in students from China studying here. Many of them are extremely able and very hard-working. I remember in my time as Master of Birkbeck that the only students to be seen in the institution over Christmas were the Chinese—they were there throughout the holiday.
I certainly think that it is an advantage to us that young Chinese, able young people, should be exposed to a different culture and value system which has the potential to broaden their outlook as they perceive the importance of the UK attitudes to openness, human rights and democracy. However, if this is to apply, there must be no restraints on freedom of speech, as the noble Baroness, Lady Anelay, said, and there must be freedom to pursue research for Chinese students. There is a particular danger in researching some sensitive areas of technology which may have military as well as civilian uses, but the solution is not to withdraw from Chinese involvement but instead rigorously to assess the risks and to take action to mitigate such risks.
I hope too that the British Council and others will encourage cultural activities. There is, for example, a big appetite in Chinese cities for British performances of classical music and ballet, as well as an interest in English writing and literature and in British design, as I know from my experience as chair of the British Library. It is a missed opportunity to neglect soft power of this kind, and I hope the Minister will endorse that.
I will leave some of the threats to security posed by Chinese military power in the South China Sea and beyond, as well as the danger to some developing countries of belt and road policies, to other speakers. However, I ask the Minister, following the noble Baroness, Lady Anelay, how the Government are reacting to the very worrying comments on Taiwan made by President Xi in his speech last weekend to the Chinese Communist Party’s 20th Congress, with the threat of possible force to secure the co-operation of incorporation of Taiwan into mainland China. Are we urgently discussing an appropriate response with our allies in the international community?
I turn to an important area where we may be able to find common cause with China, and that is climate change. The noble Baroness, Lady Anelay, asked, in her follow-up letter to the Government’s reply to the committee’s report, for further information on how the Government plan to co-operate with China following COP 26. The reply from the Minister for Asia at the time was rather vague and procedural, citing the various contexts in which collaboration was taking place but giving virtually no detail on the content of such discussions. China has been the largest global emitter of carbon since 2006 and is now the second-largest historic producer of emissions, although it is well behind the United States. Its very size and the extent of its industrialisation mean that its climate change policies have a huge global effect.
However, the positive side is that China’s per capita consumption-based emissions, taking account of international trade, remain lower than those of the UK. Moreover, according to the International Energy Agency, its investment in clean energy amounts to a massive 30% of total global investment. It would be appropriate for the UK to recognise the efforts China is making to tackle climate change, with a goal to reach net zero before 2060. Nevertheless, there are still areas of concern, notably the fact that China is continuing to invest in new domestic coal, even though it has committed to end funding for overseas coal investment. What progress has the UK made in debating with China the continuing use of new coal, which could certainly jeopardise its net-zero targets?
I end by pointing out that our engagement with China cannot be pushed on one side. It can and should be constructive, but we must never pull our punches, particularly on human rights abuses, Taiwan, Hong Kong and on stretching WTO rules entirely in its own interest. The abandonment of any semblance of collective leadership with Xi Jinping’s appointment for a further five-year term involves a dangerous concentration of power in the hands of one man—a man whose ideological fundamentalism poses quite a big threat both to China and the rest of the world.
Lord Campbell of Pittenweem (LD)
My Lords, if I seem a little overexcited today, it is because, after 28 years in the House of Commons and seven in your Lordships’ House, I have at last been given something on which to rest my speaking notes. I should also declare an interest as the chancellor of the University of St Andrews, which has substantial numbers of Chinese students, who come to take advantage of the education provided there.
In preparing for this case, as I am sure others have done, I read again the terms of the summary of the report. It is almost entirely still relevant, but in almost every dimension there have been substantial changes—from David Cameron and George Osborne and from Hong Kong to Huawei. There can be no doubt that the relationship between ourselves and China has deteriorated.
I propose to adopt—brevitatis causa, as the law would say—the two contributions made by the noble Baroness who was the chair of the committee and, equally perceptive, the address recently made by the noble Baroness, Lady Blackstone.
Of all the differences, it seems to me that the disagreement over Hong Kong, involving as it does the suppression of the terms of its return by the United Kingdom to China by the Blair Government, has driven a horse and cart through the relationship, to the extent that it existed on mutual trust. Indeed, just 48 hours ago, we had an extraordinary feature of that suppression, when a peaceful protest was subject to what one might describe as assault and battery. That, I think, tells us the extent to which the atmosphere which characterised the return of Hong Kong has long since dissipated.
However, notwithstanding all these issues, we need a relationship. Some will seek to characterise it as being a contest between human rights and economic opportunity. The difficulty of that relationship is underlined by the fact that China and Russia make common cause, invariably, in the Security Council of the United Nations, in vetoing resolutions which would otherwise pass.
As the noble Baroness, Lady Anelay, made clear, there are several indications of the nature of the relationship between Russia and China, but it appears from time to time that the Chinese part of that relationship is put on its inquiry. I have regard, of course, to the fact that Mr Putin felt it necessary to offer an explanation in advance before what he anticipated might be searching questions from China at the recent summit. There are those who argue that China’s reservations about the military action in Ukraine are greater than perhaps has been publicly expressed. All this suggests that China may have an interest in these matters that is more than that of cheap oil and gas—not least because, with regard to China, anything approaching instability is to be avoided.
There does not appear to have been any material impact on the conduct of Mr Putin as a result of this discussion, to which I have referred and, indeed, one could argue, particularly in recent days with the deliberate targeting of civilians and civilian properties, the conduct of Russia and its forces has deteriorated even further. Indeed, one could argue that, particularly in recent days, in the deliberate targeting of civilians themselves and civilian properties, the conduct of Russia and its forces has deteriorated even further.
President Xi is, as the noble Baroness confirmed in opening our debate, likely to be elected for a record third term at the National Congress of the Chinese Communist Party. Some have described this as a watershed, politically, militarily and economically but, so far, it does not appear that the ambitions of China are anything other than more of the same, except perhaps more extreme. As far as the leader of China is concerned, his confirmation will give him historic authority and, perhaps, overconfidence, which may explain his unspecified warning of the threat of “grave international developments”.
All of this is coupled with the assertion, to which the noble Baroness drew our attention, that military means are still on the table, as far as China is concerned, to further its ambition to bring Taiwan back into the fold. It is an interesting feature of the personality and ambitions of both Putin and Xi that they share a common interest in the pursuit of territory which, once upon a time, was regarded as being within their influence, to restore it in some kind of missionary approach as being truly part of the motherland to which it should now be restored.
As I said, in the case of Hong Kong, there is more than simply disappointment that the terms of the return of Hong Kong to China have been so badly treated. They were maintained for a period and the conditions followed as stipulated, but it is against that unhelpful background of change that the United Kingdom now needs to consider the establishment of a clearly defined relationship with China. As has already been pointed out, there is far from clarity on that matter, when clarity is urgent. It must be a relationship which does not prejudice our values; it must be a relationship that, from the point of view of both parties, is of mutual advantage. It is trite to say that it will almost certainly not be easy.
Such a relationship would best be viable if it is done with allies—I have particularly in mind allies from Europe. Our departure from the European Union is of course unhelpful in this regard, but it is not prohibitive. Respectfully, it seems to me that this would be an important way of establishing a relationship with Europe in which, thus far, the present Government, have shown little interest in creating.
In any discussion about a relationship, there will inevitably be the issue of ethical foreign policy. I remind noble Lords—because I was there when he said it—that Robin Cook never said that we had to have an ethical foreign policy. What he said was that we had to have a foreign policy with an “ethical dimension”. The truth is that in extreme circumstances, where the interests of the nation are at stake, there might be a move to depart from a strictly ethical approach. I do not believe that that is anywhere near what we are discussing in this debate, but it is important to ensure that an ethical foreign policy is not to be used as a blanket and simply the basis for refusal. It also has to take account of the fact that President Xi is open in his belief that the rules conceived in the years immediately after the Second World War do not reflect the circumstances of 2022. There may be some scope for altering rules, but there can never be any scope for abandoning the principles which lie behind them—principles which are as important today as they were in the period after the Second World War.
Let me finish, if I may, on this point. Our interest and our interests in our relationship with China should not be episodic. This is a relationship, if it is achieved, that will require consistent and continuing review. We would not expect the Government to do anything other than to approach the matter in that way, but in addition to government implementation, there is an overwhelming obligation to ensure that the legislatures—both this place and the House of Commons—have the opportunity to keep responsibility for implementing any such agreement, as I have said I believe is appropriate. The reasons for that are very simple: as the summary says, the issue is complex, and it has certainly changed very rapidly over a short period of time. There is nothing to suggest that these two characteristics will not continue to have an influence on our relationship with China.
Lord Stirrup (CB)
My Lords, the International Relations and Defence Committee’s report The UK and China’s Security and Trade Relationship contains much material and covers a lot of ground, but the central thrust of its argument can be identified from the second part of its title A Strategic Void.
The Government’s integrated review contained many aspirations and listed many activities, including in the section on China and the Indo-Pacific. But lists are not strategies. They do not aid clarity; indeed, they often confuse. The committee’s report, like that of the Foreign Affairs Committee in another place, called on the Government to produce a strategy which would set out a framework for dealing with China, and indeed it suggested what such a strategy might look like.
In their response, the Government seem to suggest that they have a strategy but are not going to tell us what it is for security reasons. This, if it is more than just camouflage, is unconvincing. No one expects the Government to reveal exact plans, specific means and tactical details—if indeed they exist—and I for one certainly acknowledge that intentional ambiguity can be useful in certain situations. But businesses wishing to engage with China need to have a clear idea of the risks they might be running. Academic institutions, too, need to have a good idea of how the Government might react to certain developments on the international scene. They do not need to know exactly what those reactions would be, but they need to be aware of where the Government set their priorities.
The issue of Taiwan, already mentioned this afternoon, is clearly the most dangerous aspect of our engagement with China. Supporting that country’s independence, while avoiding a general war over it, should be our top priority. President Xi’s recent statements have only added to the tension. The Government’s response to the report acknowledges the importance of the issue, but it does not say what assessments have been made of the risk of the likelihood of conflict and its possible consequences. This is not an area where I would look for detail, but I do look for an assurance that such work is in hand.
Beyond that, it is clear that China is, as one inquiry witness put it, out to make the world safe for autocracy. For those who have not read it, the special report in the latest edition of the Economist sets this out in stark terms. The Government’s response to the committee’s report admits that:
“Aspects of China’s approach to the multilateral system run counter to UK interests and values”,
and goes on:
“We will continue to take targeted action with international partners to defend universal human rights, free and fair trade, and ensure that in areas, such as emerging technology or space, that new rules, norms and standards enable freedom and democracy to survive and thrive.”
This is woefully inadequate. It makes the whole thing sound like a piece of peripheral business.
In fact, we are, or certainly should be, engaged in a fierce contest to determine the rules of the international order under which we will have to live and operate for most of the rest of this century. Very few things could be more central to our future welfare and prosperity; securing the right outcome should be one of the highest foreign policy priorities for the UK. It certainly is for the United States. President Biden has made his Administration’s position very clear on this and has set about assembling the necessary international economic, technological and military weight to counter that of China.
None of this is to argue against the desirability of business, academic and cultural links with China, but setting out the UK’s priorities in this regard would make it clear that those other areas of engagement would all be contingent upon the pursuit of our objectives regarding the international order. It is hard to see how spelling this out would endanger our security. It would, however, give those in business and elsewhere a clearer idea of the downside risks associated with such engagement.
As it is, if one reads the Government’s response regarding Huawei, for example, one gets the clear impression that this company would now have a substantial hold over our 5G network had the Americans not rather annoyingly imposed additional sanctions on it. A little earlier, the Government’s response says that the National Security and Investment Act is “country agnostic”. That might be true with regard to the wording of the Act, but to suggest the same is true of its application seems to me breathtakingly complacent.
The principal risk for UK business is of course the likely adverse Chinese reaction to our opposition in the contest to determine the future rules of the international order. The committee called on the Government to conduct an impact assessment of such an outcome. The Government’s response is a fine example of departmental waffle:
“The … relationship … is multifaceted”;
they will
“manage disagreements and defend our values while preserving space for cooperation in tackling transnational challenges … and … continued pursuit of a positive trade and investment relationship in line with our national security and values.”
It is cakeism at its best. But what do we do if somebody takes away the cake? We are given no answer.
This Panglossian approach is also evident in the Government’s response on higher education. They say:
“We will also ensure that Chinese students are treated equally to all British and international students, including protecting them from any undue pressure on political issues.”
Really? How? Are we going to ensure that their families in China are protected from official pressure or sanction? Are we going to monitor all their interactions with their own Government? Or perhaps these matters do not fall under the heading of “undue pressure”.
The Government’s response on supply chain resilience is little better. We are told:
“The Foreign Secretary has been clear that it is important that the UK does not become strategically dependent, and that, particularly in areas of Critical National Infrastructure, we work with reliable partners.”
So what action has followed? What exercises have been undertaken with a range of scenarios to give us a better idea of critical vulnerabilities and how these might be reduced? What specific command and control processes have been set in place to train for and respond to threats to our national resilience? Once again, we are given only vague reassurances.
The Government could and should do much better. We are dealing with an increasingly autocratic regime in China. I would have thought that our experiences with Russia over the past decade would have taught us what we should never have forgotten: how dangerous such regimes can be, especially when they are militarily powerful and, most especially, when they have nuclear weapons. We need a long-term strategy for dealing with them.
The Government should set out such a strategy. They should give some shape and sense of priority to their otherwise all too comprehensive and sometimes contradictory aspirations with regard to China. The committee has proposed such a shape. Finding a satisfactory but peaceful outcome to the Taiwan issue is at the top, but close behind it comes our pursuit of an international order that is fair to all and helps to protect the world from autocracy. Trade and wider engagement with China should be pursued, but not at the expense of higher-priority objectives, and in the knowledge that such prioritisation will at times lead to Chinese retaliation and all the associated risks.
In its leader article on China this week, the Economist said that
“handling the most powerful dictatorship in history was always going to require both strength and wisdom.”
It is not at all clear to me at the moment that we see enough of either. I hope that we can get more from the next Prime Minister, whoever that will be.
Lord Goodlad (Con)
My Lords, I congratulate my noble friend Lady Anelay and the committee on the report and my noble friend on her speech introducing the debate today. Much has taken place since the publication of the report, all of which underlines the importance of its deliberations and recommendations.
It is a great pleasure to follow the noble and gallant Lord, Lord Stirrup, who spoke with such authority, particularly about the strategic considerations covered in the report. I agree with so much that was said by the noble Baroness, Lady Blackstone, the noble Lord, Lord Campbell of Pittenweem, and, indeed, by the noble and gallant Lord, Lord Stirrup, that I will try to be brief and avoid tedious repetition.
The main recommendation, that the Government publish a clear China strategy that identifies the long-term objectives and relative priorities, has been extremely well covered by my noble friend and the noble and gallant Lord, Lord Stirrup. It is noteworthy that in the debate in July introduced by the noble Lord, Lord West, my noble friend Lord Sharpe said that the National Security Council leads the strategic approach to China and that the Government
“do not publish NSC strategies on China or other issues.”—[Official Report, 14/7/22; col. 1635.]
We all understand the reasons for that, as covered by the noble and gallant Lord. As the book of Ecclesiastes reminds us, there is
“A time to rend, and a time to sew; a time to keep silence, and a time to speak.”
It is certainly true, as the report says, that the Government have not set out a clear position on their strategy for balancing their ambition for increased economic engagement with China with the need to protect our wider interests and values. However, as the noble and gallant Lord said, there is a distinction between having a strategy and spelling it out in every detail publicly. The Government have not yet struck that balance, and must do so.
The strategic concept document accepted at the NATO heads of government summit in June summarised the situation starkly and succinctly. In the unprecedented joint address by the head of the UK Security Service and the head of the United States FBI in July, the former referred to China remaining opaque about its strategy, intentions and military build-up; the latter gave an informed summary of how their organisation viewed the threats to our—and their—economic and national security and how they were responding to them. I hope that when he responds, my noble friend the Minister will go as far as he reasonably can to reduce that opacity and amplify what has been said publicly by the Government.
In dealing with China, I use the word to mean the Government of the People’s Republic of China, rather than the country or its people.
I acknowledge that public utterances can sometimes make a bad situation worse. We in this country have historically taken, until recently, a very cautious approach. However, there is a distinction between counterproductive megaphone diplomacy and robust public exchanges. In my experience, Chinese government interlocutors respect plain speaking rather than circumlocution. Their own official spokesmen have seldom erred on the side of reticence or understatement. Speaking in private, which has been our tradition, may or may not carry more weight than public utterances, if indeed any weight at all, depending on the circumstances. The important thing in my view is to continue to engage. As the report says, there is no realistic alternative.
It is welcome that, in their response to the report, the Government said that they would continue to co-operate and engage with China in areas of shared interest, as my noble friend Lady Anelay, said, such as climate change, biodiversity and global health. To that I would add, among other things, Russia’s threats to use nuclear weapons in Ukraine, which I believe have rung alarm bells in Beijing as elsewhere, as the noble Lord, Lord Campbell, mentioned. China has considerable political leverage with Russia, and that is clearly an area where it is worth trying to engage.
In their reply to the committee’s report, the Government rightly recognised that British interests are best served by an international rules-based order—that has always been the British Government’s position. It is proposed that the Government should play a leading role in strengthening international organisations, such as the World Trade Organization, and assembling a group of nations with sufficient aggregate political, economic and scientific power to counter that of China and successfully influence uncommitted countries. It would helpfully serve that important and laudable objective if the British Government themselves continue to uphold and treat international law as a whole and not as an à la carte menu from which to choose their own preferences. In that context, I believe it to be important that this country continues to abide by our treaty obligations under the joint declaration on the future of Hong Kong, which continue for a further 25 years, whatever the future circumstances may be and whatever China may do.
The committee rightly pointed out that, in seeking to further any of our objectives and strategic priorities, careful diplomacy would be needed and that the necessary understanding of China was neither as deep nor as widespread across government as needed. I share that perception. We live, needless to say, in straitened economic circumstances, but in the totality of government expenditure the Foreign Office budget is exiguous. We have spent time and money in the past, through the Great Britain-China Centre and other organisations, seeking to help build capacity in China in such areas as law and accountancy. We should now devote resources to building our own capacity, both linguistic and in knowledge of China’s life, history and culture across government. It is encouraging that the Government in their response to the report have recognised that.
Nor should those efforts be restricted to government employees; there should be a holistic approach across government. The education system itself should be encouraged to foster a knowledge of Chinese languages, history and culture. I speak as the modestly proud father of one who studied Mandarin at both British and Chinese universities before working in China. This should be a high priority across government. Again, it is welcome that, in their response to the report, the Government commit to strengthening people-to-people links and support Chinese language teaching and cultural exchange with China.
The noble Lord, Lord Campbell, referred to the disgraceful scenes in Manchester, which we all saw on our television screens earlier this week. In his book Experiences of China, published in 1994, the late Sir Percy Cradock recounts how after the sacking of the British embassy in Peking during the Cultural Revolution, he, bloody but unbowed, surrounded by a howling mob, quoted to his British companions in distress Virgil’s line from the Aeneid:
“forsan et haec olim meminisse iuvabit”—
perhaps even these things it will one day be a joy to recall. Perhaps we should today read a little further in the Aeneid:
“Durate, et vosmet rebus servate secundis”—
then endure for a while and live for a happier day. Or again:
“nunc animis opus, Aenea, nunc pectore firmo”—
now, Aeneas, for a bold spirit and a strong heart. The Government deserve our full support in this important and extremely difficult task of managing this relationship. We wish them well.
Lord Alton of Liverpool (CB)
My Lords, it is a great pleasure to follow the very thoughtful speech of the noble Lord, Lord Goodlad. I think the last time we were together at a public event was at the launch of the diaries of the noble Lord, Lord Patten, in which Sir Percy Cradock features quite prominently. Anyone wanting to understand the betrayal of the people of Hong Kong should most certainly read them. I declare my interests as vice-chair of the all-party groups on the Uighurs and Hong Kong. I am a patron of Hong Kong Watch and a member of the Inter-Parliamentary Alliance on China.
Notwithstanding the disappointment that it has taken so long for the Select Committee report to be debated, I put on record my thanks to the noble Baroness, Lady Anelay, for her superb chairmanship of the committee and for navigating us through controversial issues to produce a report which moves the debate beyond the naivety of the “golden era”—which was, as the noble Lord, Lord Patten, told us, an example of “doubtless well-meaning failure”. The report tackles hugely important questions about trade and security, not least the gaping wounds of lost national resilience and our phenomenal dependency on a country which stands accused of genocide.
Sir Malcolm Rifkind told us:
“China has become much closer to a totalitarian state than at any time since the death of Mao Zedong.”
We heard what we called
“conclusive evidence that China also poses a significant threat to the UK’s interests, particularly in light of the … tilt to the Indo-Pacific region.”
We concluded that the UK has had a lack of clarity and a policy of “deliberate constructive ambiguity”, as my noble and gallant friend Lord Stirrup has reminded us, and what the noble Lord, Lord Patten, referred to as the “cake-ism” of the 2021 integrated review, which regarded China as both a “systemic competitor” and an “important partner”.
The report criticises the failure to provide any details on how the Government will balance plans for
“increased economic engagement … with the need to protect the UK’s wider interests and values.”
It calls on the Government to produce a “single, coherent China strategy” and warns of serious risks to our security and prosperity—including to our international trade and investments over the longer term.
This month’s government announcement that China is to be formally designated a “threat” to Britain rather than a “systemic competitor” is a belated but very welcome move towards a clearer strategy. It follows the recent warnings by Jeremy Fleming, the head of GCHQ, about the CCP’s efforts to exploit control and surveillance capabilities in emerging technologies, such as satellite location systems and digital currencies, which he said represent a “threat to us all”. I have eight questions for the Minister about specific threats to which I hope he can give us some answers today—if not, I hope he will agree to write to us.
First, during the passage of the telecommunications legislation, the Government said they would strip out 5G Huawei components from our telecom network. This removal of 5G was to happen in January 2023, with fines if the deadline was not met. Now we are told that there will be delays, even though a designated vendor direction has been issued identifying, in the Government’s words, that
“covert and malicious functionality could be embedded in Huawei’s equipment.”
When will the decision on Huawei be fully complied with?
Secondly, why have the Government, unlike the United States, still made no move to ban and remove Hikvision and Dahua cameras made in Xinjiang and used to collect data up and down the length and breadth of the UK? There is an opportunity in the Procurement Bill to remedy this. Will the Minister be able to tell us whether that opportunity will be taken at Report stage of that Bill?
Thirdly, on Monday—the noble Lord, Lord Goodlad, and others have referred to this—the Minister told us that the assault on Bob Chan, the young man at the Chinese consulate in Manchester, was “a very serious incident.” I met Bob Chan yesterday. Can the Minister tell us when the Greater Manchester Police are likely to provide a report to him and the Foreign Secretary and to spell out the consequences when the brutality for which the CCP is renowned is exported to the UK, threatening the safety of the 133,000 and more Hong Kongers who have fled to the United Kingdom under the Government’s admirable BNO resettlement scheme? I draw the Minister’s attention to a column in today’s Times, written by Jawad Iqbal, a freelance journalist, who says that what happened in Manchester was an
“affront to British democratic norms and values.”
Fourthly, the BBC reported last week that up to 30 former UK military pilots are believed to have gone to train members of China’s People’s Liberation Army, lured by the CCP with large sums of money to pass on their expertise to the Chinese military. What are we doing to address that threat?
Fifthly, with the noble Baroness, Lady Anelay, and the noble Lord, Lord Anderson of Swansea, we were in two of the Gulf states last week and were concerned to learn of joint military exercises between China, Russia and Iran. So imagine my consternation on return on reading a report in the Telegraph saying that:
“British academics have collaborated on thousands of research papers with Chinese military scientists, according to a government-funded report that universities sought to suppress.”
Some 13,415 collaborative partnerships with China, Russia and Iran were identified, and 11,611 were between Chinese and British academics. Why was the report suppressed, and what are we doing in partnerships on things as sensitive as rail gun design, hypersonic missiles and tracking systems for nuclear submarines? Why are we sharing expertise or developing partnerships to do those things?
Sixthly, despite our intelligence service publicly warning Parliament of the presence of CCP operatives and spies on our Parliamentary Estate, with one claiming that she had even secured amendments to legislation in your Lordships’ House, why has no action been taken to bring her here, for instance, to answer questions about these subversive activities?
Seventhly, in addition to subversion of UK institutions, we have seen the subversion of international institutions, with the votes of countries being bought and linked to belt and road indebtedness. How are we countering this? For instance, what will be included in the National Security Bill, currently in another place, to limit interference by people operating on behalf of the Chinese state?
Eighthly, the Minister is rightly regarded as one of this country’s leading champions of renewable energy and sustainability. What does he make of reports drawn to my attention by the noble Lord, Lord Hunt of Kings Heath, that BMW is to stop producing electric cars in England in 2023 and moving the production of electric Minis from Cowley to China? Last year, Cowley made around 40,000 electric Minis. Why are we ceding our aspirations to be a leader in global electric car manufacturing? What can be done about this? How can we avert it? I will have more to say about resilience and dependency.
Ken McCallum, MI5’s director-general, has said
“what is at risk from Chinese Communist Party aggression is … The world-leading expertise, technology, research and commercial advantage developed”
by technology companies and universities in the UK. We have to take that seriously.
In addition to threats to cybersecurity and technology, our report highlighted threats to maritime security in the Indo-Pacific region and to Taiwan, as we have heard, where we said conflict would be “catastrophic” and that
“managing this risk should be the Government’s top strategic priority.”
We raised serious maritime threats, the imposition of the national security law, the trashing of an international treaty and destruction of democracy in Hong Kong—all illustrative of the CCP’s contempt for international rules-based order—and what Michelle Bachelet recently described as “crimes against humanity” in Xinjiang in a report commissioned by the UN.
In his evidence to the committee, Charles Parton went further and said that genocide—not just crimes against humanity but outright genocide—is under way in Xinjiang. When she was Foreign Secretary, Elizabeth Truss said the same. The appalling treatment of the mainly Muslim Uighurs, which was referred to by the noble Baroness, Lady Blackstone, has included intense surveillance, much of it manufactured by Hikvision, mass detentions, forcible sterilisation and insertion of IUDs, forced migration, and the kidnapping of Uighur children, abducted from their parents and placed in state institutions, accompanied by terrible violence, torture and killing.
Both Sir Geoffrey Nice KC’s independent tribunal and the Holocaust Museum found evidence of coercive interventions by the Chinese government to prevent sizeable numbers of Uighurs from coming into being, suggesting that the deliberate goal is
“to biologically destroy the group, in whole or in substantial part.”
Nice’s tribunal concluded that this is indeed genocide.
I ask the Minister the same question that I put to George Osborne when he appeared before the committee. It was not a question about whether we should trade with countries that commit human rights violations, because we could identify countries around the world that commit human rights violations, it was: is it licit to do business as usual with a state credibly accused of genocide, which is the crime above all crimes?
In our report, we recommend that the Government
“should incorporate an atrocity prevention lens in its overall approach to trade. Current atrocity prevention tools and strategies have fallen short.”
When will the Government do this?
Then—as I said I would return to it—there is our appalling dependency on the CCP. Compare it with the clarity of its strategy of undermining resilience and security; acquiring intellectual property and data; and destroying competitiveness through slave labour in everything from green energy to surveillance equipment. One of the CCP’s reasons for wanting to destroy the freedoms of Taiwan’s 23 million people is to control the production of the world’s semiconductors—the cornerstone of modern economies. One Taiwanese company, TSMC, makes over 80% of the world’s most advanced semiconductors.
Meanwhile, further illustrating our incoherent strategy, we seriously consider allowing the sale to China of Newport Wafer Fab—our biggest producer of semiconductors. As Germany has discovered, love affairs with dictatorships come at a terrible price. Where does the sale of Newport Wafer Fab now stand?
During our inquiry, I was surprised to hear witnesses tell us how fortunate we were that China had made available invaluable help during a pandemic that had its origins in Wuhan. This included a reluctant admission that the Government had bought 1 billion lateral flow tests from China. They subsequently confirmed that they bought 24.1 billion items of personal protective equipment where China is recorded as the country of origin, at a phenomenal total cost of £10.9 billion. That is about the equivalent of the entire—reduced—British overseas aid budget.
This is not philanthropy. Increasingly, developing nations are being turned into dependent vassal states. We saw in the recent vote on the Bachelet report in the Human Rights Council that votes of those who voted with China not to even debate the report have been bought via indebted dependency. A diplomat recently said it was like having a
“1,000 pound gorilla on my back.”
Note, too, that by September, in the face of the global food crisis, China had given $10 million to the World Food Programme, compared with $5 billion from the United States of America. We see the same attempted systematic appropriation and subversion of international institutions, including the World Health Organization and the World Trade Organization.
Xi Jinping and the CCP have demonstrated time and again that they are unwilling to abide by international treaties, and that they are untrustworthy, cruel and unpredictable. This includes when it comes to the ongoing breach of the Sino-British joint declaration and the human rights crackdown in Hong Kong; the crimes against humanity or genocide taking place in Xinjiang; the launching of trade wars against countries such as Lithuania and Australia; the unlawful detention of Canadian diplomats; and the flouting of basic obligations under the WHO when it comes to sharing information regarding pandemics. Ministers could do well to look at the Biden Administration and recent legislation in the US Congress, including the CHIPS Act and the Inflation Reduction Act, to see a Government willing to invest in domestic industry, tackle climate change and reduce their dependency on authoritarian regimes.
If the West wants to protect itself, it must face up to the reality of the CCP’s history and its future intentions: executions; famine; deaths through forced labour; mass deportations; forced sterilisation and coercive abortion; purges of opponents; incarceration for dissent or unwillingness to comply with a brutal ideology—these are all the hallmarks of the CCP. With Vladimir Putin and Xi Jinping signing a declaration that there will be “no limits” to their friendship, it is crucial, as the noble Lord, Lord Campbell, reminded us, that we build our international partnerships and alliances through NATO, AUKUS and elsewhere.
To conclude, the CCP has been holding its rubber-stamp Congress. Obsessed with control—evidenced by its lockdown policy—it is veering in the direction of belligerent nationalism. But as has been demonstrated by “Tank Man” in Tiananmen Square in 1989, “Bridge Man” on the Sitong Bridge last week or Bob Chan protesting in Manchester on behalf of those who remain in Hong Kong, and by the brave people of Taiwan, Ukraine and the young women of Iran, authoritarians often overestimate their hold on power.
Liu Xiaobo, the Chinese writer and dissident and Nobel laureate, who died in 2017 after serving four prison sentences, said,
“there is no force that can put an end to the human quest for freedom”.
He was right.
Baroness D'Souza (CB)
My Lords, it is a privilege to follow the noble Lord, Lord Alton. There has been a marked diminution of trust between the US and UK and China and its leadership, and the resulting tensions are likely to continue and even to escalate. The committee’s report is therefore extremely timely and important.
As we have heard repeatedly this afternoon, the main lacuna in the UK’s approach to China includes the lack of a clear strategy on what values and interests the UK is trying to uphold. What follows is a number of actions and policies which amount to a series of tactics rather than a strategy—tactics which are weakened as a result.
The report calls on the Government to remedy this by developing and publishing a single coherent China strategy which details objectives and how they plan to achieve them. The standard response to this request is either that it is already in hand or just about to be completed. So far, however, the UK Government have declined to publish their plans. China experts lament this and continue to push for details on both the overall strategy and the mechanisms by which it could be achieved.
What is needed is a new politics of balance: a stated policy of “on the one hand and on the other” approach. That would entail co-operation and reaching out to the PRC on matters of trade, environment and civil affairs while protecting national security, economic prosperity, personal data and values. If there were to be an unambiguous and consistent approach in all UK dealings with China that was clear not only to the PRC but to all countries in the Indo-Pacific region and beyond, red lines would quickly become apparent.
The takeover of Hong Kong by the PRC, dismissing all previous treaties and agreements, sadly, did not seem to constitute a red line, and fears that similar inroads on Taiwan would not evoke unequivocal action from the UK are realistic. Nor, apparently, is the widespread view that China’s actions against the Uighurs amounts to genocide eliciting strong enough condemnation and action by the UK Government, as we have heard from the noble Lord, Lord Alton.
The inconsistency of the UK approach to China’s aggression is itself a weakness that could be resolved in part with a strategic plan of action. Meanwhile, actions that are being taken or planned by the UK Government have a somewhat capricious, even unserious, flavour due to the lack of a stated strategy to which all tactical actions could and should be directed.
To put meat on the bones of tactics, the report and other contributions from China experts suggest a number of innovations. These include an in-depth study on the extent of the security threat posed by the PRC, to be carried out in consultation with scholars and other advisers. The current FCDO China department refers to the PRC only as a “systemic competitor”, which tends to downplay serious efforts to infringe the UK’s integrity. A programme of recruitment is needed to ensure that there is wide expertise available to the civil servants and to government departments. Given that the PRC’s ambitions, intentions and methods shift constantly, there needs to be ongoing research, consultation and policy adjustments by the China watchers as well as effective cross-government liaison and co-ordination. Interestingly, there is no reference in the Government’s response to co-ordination with European partners on trade and security policies.
The Government’s response on Taiwan is to “grow our relationship”. Once again, what is needed here is a detailed inventory of actions to support Taiwan with strong lobbying for its inclusion in relevant international organisations; a willingness to accede to requests from Taiwan for asymmetrical—or porcupine—defence weaponry; and to encourage further visits by senior ministerial, parliamentarians and other arms of government personnel.
As in other nations with questionable values and freedoms, the outreach activities tend to centre around institutional and capacity building and non-traditional security areas, such as training and joint exercises. The BBC and British Council are long established and greatly valued soft-power organisations and their role in bridging peoples across nations cannot and must not be diminished. In this context, the planned or proposed cuts to the BBC World Service are, to say the least, disheartening.
Above all, there seems to be a consensus that the UK’s China policy must avoid being dominated by profit alone.
The Government’s response to the committee’s report is, to my mind, rather too full of intentions in place of actions: for example,
“We … intend to increase our broader Defence Engagement including through capacity building and training, delivered by longer and more consistent military deployments”;
or, to give another example, the Government intend to overcome barriers to investment and point to the potential export opportunities in education, food and drink, pharmaceuticals and medical technology, without any concrete suggestions as to how this will be achieved.
Overall, the grandiose statement in the Government’s response that
“we will harness the UK’s strength as an outward-looking nation, confident in its ability to innovate, compete, lead and deliver for British businesses and the British people”,
is not always matched by diverse actions and intentions. If a coherent strategy can be agreed on which makes all the red lines clear and emphasises both the opportunities and constraints, there will be increased room for trade and soft power initiatives to achieve a much greater return.
Lord Howell of Guildford (Con)
My Lords, it is a privilege to participate in such a highly informative and well-informed debate on such a vital issue. It is a bit hard to focus at the moment when I gather that we are once again in search of another Prime Minister, but that is an issue that we shall put aside for a moment and rightly concentrate on this one.
It is a very interesting report. It is remarkable that we are debating it now, a year after it was published. There seems to be something wrong with the machinery for deciding the timing of these things. It is an excellent volume, under the superb chairmanship of my noble friend Lady Anelay, and we ought of course to have come to it much earlier. Oddly enough, and ironically, because of that delay it has arrived for this debate at a very topical time indeed. China is now more than ever at the centre of our affairs—our home affairs as well as our international affairs—on energy questions and the climate issue, which has already been mentioned, where it is central. We have Xi Jinping at the 20th plenum eyeing up Taiwan again and saying that he is not ruling out force, and apparently we are being told by the strategists that Beijing says that, if China sees that America is getting too intrusive, it will, in those chilling words, “surround Taiwan” in three hours—a rather sinister warning of what is to come.
As for Ukraine, the Chinese role has always seemed to me—and, I think, to many others in this Room—pretty central to that as well. As long as Putin has felt that he has solid support from Beijing, he will not lose much sleep over threats from NATO and so on. Slightly encouragingly, I hear, and I am sure others will hear, that the Chinese are getting increasingly worried about Putin and feeling that they are losing control of him. Of course, what they are terrified of is that he will start with the tactical nuclear weapons. So I hope that, maybe if we have good back-track relations with China on that issue, we can exert some more influence on this evil man in the Kremlin.
Meanwhile, of course, China continues to be, embedded here at home right in the United Kingdom at the heart of our nuclear power replacement programme, which happens to be vital to the whole strategy of carbon reduction in the future. That is more and more important now, as our leaders realise that net zero is splendid but it will not be anything like enough to check the vast growth in emissions, coming not least from China but also from the rest of Asia, which is roaring ahead and for which entirely new policies will be needed. So here we are, dealing with and addressing an issue which is highly topical, despite this deplorable delay.
I just had one additional theme to add to the story, and indeed to the report and to the Government’s response, where it was a missing element. I refer to it in rather over-graphic terms used by one expert, who observed that China as part of its hegemonic strategy is hoovering up the developing world, and in particular the Commonwealth members of the developing world—the coastal states of Africa, but even more the islands of the global south: the South Pacific and the Caribbean as well, and indeed parts of Latin America too. This development does not get much mention from the witnesses in this report, and yet it is really the key issue in our relationship with China and the most serious threat in the medium term to our influence, to the transmission of our soft power and to our place in a transformed world with a rising Asia accounting for an increasing volume of world product activity and indeed a major contribution to security.
The most visible immediate sign of that is what has been going on in the Solomon Islands, which I think took everybody by surprise. Indeed, it seemed to me, listening to our distinguished diplomats, that they were only dimly aware that the Solomons were part of the Commonwealth, that the Queen was the Head of State and that we appointed the governor-general. However, that picture was soon asserted when we saw photographs of the Prime Minister of the Solomon Islands with the Defence Minister of China inspecting a rather grim formation of burly-looking Chinese troops on parade. Was that supposed to be what we were trying to achieve in the Solomon Islands? Rapidly, people reassessed and increased our influenced on them and realised that that is not the way we want things to go.
Then there is Vanuatu, of course, which has a huge Chinese base on it. Tuvalu has now been incorporated. Incidentally, the Solomons sit over one of the main maritime routes of the entire east Asian trade, which is a huge proportion of world trade, and the arrival of China there, and its proposal to have a nuclear base, is a matter that concerns us very much indeed.
Then we have Africa where, as we know, the Chinese have had their setbacks and are not always popular, particularly when they have used prisoners to do infrastructure work. But they call themselves Africa’s “dependable ally”, and are increasingly involved in a whole range of countries. Indeed, they have a military base in the top of Africa, in Djibouti, which is a real advance and departure. That is significant, because it brings home that we are talking about not just trade involvement—bags of gold, infrastructure, new conference centres, roads and railways and all that sort of thing—but about security co-operation. We are talking about military training, weaponry and the Sandhurst of China— the Sandhurst of Beijing, rather than the Sandhurst of Camberley—offering thousands of places for officer training to teach military values that are very different from our views of how armies should fit into democratic societies. All that is going on, almost—and I hope that I will be forgiven for saying this—with an oblivious disregard from our policymakers here about what is really happening.
That is the global south—and then we have the Caribbean, of course. I know that Barbados has not left the Commonwealth, although the media think that it has, because it has ceased to be a realm. They are very confused and do not actually understand what is happening in the Commonwealth at all. But those who went there tell me that, as they left, large jumbo planes were arriving and parking at the airport, covered in Chinese designations and signs. It turns out that the Barbadian Government have become dangerously involved, as have many other countries, in owing China a large amount of money for what they thought were grants, which turned out to be loans. They are going to cause a lot of grief when they have to be repaid.
So here is a picture of our Commonwealth of like-minded countries, which are privileged to be members of it—and it is one of the main sources of our transmission and influence in the world. We would like to think that it would be a chain of liberty and democracy containing China, but almost before our eyes it is being turned on its head into a chain of Chinese projection of its power, instead of a containment of its power. It is a very serious development, not mentioned here and not mentioned by the Foreign Office; it is not understood, and it is coming into our lives in very serious ways and at great speed.
We have, of course, huge involvement in south Asia. We have our involvement in Five Eyes and the Five Power system, which was mentioned very thoroughly in the report. We have our links with Japan, which are again covered in the report, and we have AUKUS and the submarine plans, which are important. We have our ambitions to join the CPTPP. We are not involved in the RCEP. All these are organisations far larger than the European market, and far more important in the long term for our development.
We have that; versus that, we have a China which at a very deliberate, practical and detailed level—with not too much ideology but in detail—is constantly moving from island to island and state to state. China is arranging not only the links that I talked about earlier but also technology links and opportunities that they can use as basis for GPS, which we are told is part of the next war, in space, and for drone development, which you do not need on a small island, for a large airport with a large airstrip, and for a whole range of other technologies controlling maritime movements through the continental shelf and the UN’s law of the sea provisions of immense strategic value.
I was saddened to hear from a leading Foreign Office expert a year or so ago that the Commonwealth was a bit boring; it was much-loved by the late Queen, but these little islands were very remote and of no strategic significance. The Chinese do not think that; they think the opposite. They think they are of high strategic significance, and they are involving themselves in these nations at a great rate and in many very effective, soft-power types of ways. I wanted to add that missing bit to our debate, to the Government’s response and to the report, because it is the most important bit of all.
I wish we could have a strategy and framework, which noble Lords with huge expertise are calling for, but I do not think it will be like that. The pace of change of events is enormous, and we have to, at best, try to fit in with the hard cop, soft cop pattern. We need to be hard cop.
We listened to the noble Lord, Lord Alton, with his ceaseless and superb indications of the nasty, illiberal side of China, and what it is doing to people in thuggish ways—there was a little demonstration of that in Manchester last week, which I thought was very interesting. These are Chinese thugs at work; we know that this is a streak in the Chinese character. We have to listen to Xi claiming his endless term of office and talking, frankly, ideological rubbish about how we must go back to Marx and Leninism. He has issued his own absurd “Little Red Book”. The Chinese are not fools; I do not know how they will tolerate that sort of thing, but I do not think that it will last.
We have to be the hard cop there, but we also have to be the soft cop, because China is a world leader in technology, it is a decisive part of the world economy—I understand that China is the second-largest source of imports to this country—and it is embedded in our nuclear power, as I said earlier, and indeed in many other aspects of our infrastructure, partly as a result of being perhaps overencouraged 10 years ago. As noble Lords have rightly said, the world has changed radically. We now have to look at China with the scales dropped from our eyes and realise that we have to deal with it—while holding our noses—but that it is also, potentially, an increasingly dangerous threat to the order of a democratic, free world.
Lord Teverson (LD)
My Lords, it is a great pleasure to follow the noble Lord, Lord Howell, and his wise words, particularly on Chinese influence in Africa and beyond, because that is where the cut in our foreign aid budget has quite substantially taken away the power, prominence and respect that we had in international development. It is something that we pay for when our competitors take over.
My bedtime reading tends to be contemporary and modern history, rather than fiction—although obviously as you get close to the Trump Administration the two tend to merge. It is quite clear, and comes over in the report, that we as a nation were a major part of China’s humiliation through the opium wars. Perhaps there is a lesson there that, as you overtake people going up the global league table, it is good to remember occasionally that you might be on the way back down a few years later—maybe that affects the relationship.
I am reminded that we had President Xi here in this Palace in 2015, only seven years ago. He addressed us as the combined Houses of Parliament in the Royal Gallery, and I was privileged—I will use that word—to meet him personally for an instant afterwards at a reception, because I had chaired a committee delegation to China a few years before. We were given the chance to say one sentence to him. I do not know whether he understands any English—he certainly makes out that he does not, and he probably does not—or whether what I said was translated, but I made some fatuous comment about the importance of the European Union. What I really wanted to say to him was, “President of China, you don’t have to assert yourself as China in the globe, because the rest of the world realises that you as a nation will be a major player globally over the next century. You don’t have to assert that in other ways; it is evident in the economy, size, population and other issues.”
Unfortunately, he clearly has not taken the advice that I would have given him. As has been said, we have very much seen this in Hong Kong and the end of “one country, two systems”. We have also seen it in the gradual but assertive implementation around the nine-dash line in the South China Sea; although we have shown that we still treat them as international waters, along with our other allies, predominantly America, its taking control of that area continues. On Taiwan, both we and China have become more threatening, as we saw in particular with the Nancy Pelosi visit. I am pleased to say that India, which we often forget about, is also mentioned in this report, as is the control line, where China is claiming parts of the Indian nation—those are two nuclear powers occasionally facing off with border skirmishes. There is also the growth of its military power and the President going for life presidency of China. There are other big challenges that other Members have already gone through.
Connections with China are important, however. I will reflect some of the themes around climate change that the noble Baroness, Lady Blackstone, talked about, and then move on to supply chains, which the noble Lord, Lord Alton, mentioned. As the noble Baroness, Lady Blackstone, said, it is quite clear that China is the largest emitter of greenhouse gases in the world, having overtaken the United States. It accounts for something like a quarter of emissions. Without getting too techie on this, even on a consumption basis—often we look at China as the workshop of the world, exporting to us, and we export its emissions back—it still accounts for about a quarter of emissions, given its economic growth and the way that incomes have gone up there. Even cumulatively, to look back through history, China is now the second most responsible for the greenhouse gases in our atmosphere. No longer can it blame the western world for being the major emitter; admittedly, on a per capita basis, although it is now ahead of us in the United Kingdom, it is still well behind the United States.
Partly through our good work—and that of Alok Sharma in his presidency of COP 26—China has now set a target of peaking its emissions in 2030 and meeting net zero in 2060. I do not know whether it will do that; ironically, it seems it might actually achieve it through the continued zero-Covid policy, which has crippled and will continue to cripple Chinese economic capacity for some time to come, until it has to make that break—I hope for the Chinese population that it will use western vaccines.
It is imperative that we engage China in that process globally. As the noble Baroness said, it is ahead globally on investment in renewables of all sorts. In fact, it has three times the level of renewables investment of the United States, which is second. It is a key player in that area and we must encourage and include it globally, despite the rest of the issues, in those conversations moving forward. It is so important that we remain global leaders in that area. How does the Minister see our leadership now that the present Government—and, I presume, the next Government under a new Prime Minister—have endorsed fracking in this country? I would be very interested in his comments on that.
That leadership on investment, however, has another difficult effect on us. Through its supply chain and economy, China produces some 80% of solar panels globally. It has, if not quite a monopoly, a dominant oligopolistic position in supply chains nationally and globally, which is expected to rise to something like 95% if trends continue in certain areas of that supply chain. We in this country are very much into wind, and offshore wind, but solar is the major area of renewables transition and China has, and will continue to have, a stranglehold in that area. In EV batteries—I think the noble Lord, Lord Alton, mentioned EVs—it has a market share of about 60% at the moment in productive capacity. Even on wind turbines, 10 of the top 15 companies globally are Chinese. Most of those are for investment within China, but believe me, Chinese companies are predatory globally. Once they fulfil their own market and have extra capacity, they will move outside. There is real concern here about the transition needed throughout the world when China has a stranglehold on those technologies. I am interested to understand from the Minister, who I know is very strong in these areas, how we might start to change that so we do not have the equivalent of Russian gas dependency that the European Union has had until now.
I mention one more related area: rare earths. Again, China has something like an 80% stranglehold on the production of rare earths. As we know, there are 17 of these elements and, because of their conductivity and magnetism, they are used in all sorts of high-tech applications. I am not so much asking about alternative sources of supply—although that is important and I would be interested to also hear how the Government are approaching that. To me, this is the key area where we need to move from a linear to a circular economy; this is true in batteries—lithium and others. For all transition and high-tech sectors, we need to concentrate on and incentivise a circular economy, so that we can recycle these products and use them within our economy, increasing our security and lessening our dependence on other, chancier nations, securing our supply chain and helping the earth’s resources as well. Can the Minister say whether the Government are really going to push forward that agenda?
China may look on the United Kingdom as a not particularly helpful player in the past, but that is no excuse for its agenda at the moment. This report, produced under the excellent chairmanship of the noble Baroness, Lady Anelay, lays out a lot of those challenges. We must work with our allies in Europe, the rest of the world and the G7 to ensure that the rise of China is much more benevolent and less dangerous to us as a civilisation.
Lord Hannay of Chiswick (CB)
My Lords, it is a great pleasure to follow the noble Lord, Lord Teverson, particularly since he referred to a couple of themes I will mention myself: the pitiful state of our international aid performance and how that affects competition with China, and climate change.
We should perhaps be thankful for small mercies: we are debating this valuable report from the International Relations and Defence Committee a mere 13 months after it was published and nearly a year after the Government’s response to its conclusions and recommendations. I join those who say that if we cannot remedy that sort of delay, we are not performing very effectively. However, I would not give any criticism whatever to the excellent introduction and presentation by the noble Baroness, Lady Anelay, at whose feet I sat for the years I was on the IRDC—not, I hasten to say, when this report was being written—and the noble Lord, Lord Howell of Guildford, who started that committee off on its voyage of discovery.
What a year it has been. It has upended some of the foundations of both the report and the Government’s response, principally with Russia’s invasion of Ukraine, and it is now concluding with President Xi’s likely coronation for a further five years in power—or perhaps longer. It is no wonder that the Government are said to be going to revisit their pre-predecessor’s security review; it would certainly be welcome to have the Minister’s indication on the timing of that when he replies to the debate.
The first requirement for such a review would be the rather overhyped “tilt” in our security and defence policy towards the Indo-Pacific region—overhyped because not much has actually happened since it was proclaimed, other than the very welcome AUKUS agreement over the provision of nuclear propulsion submarine technology. In any case, the trouble about a tilt towards something is that it is necessarily a tilt away from something else, and this is hardly the time—following the invasion of Ukraine and Russia’s nuclear sabre-rattling—to be tilting away from European security, which surely remains at the heart of this country’s overall security and to which NATO has now committed itself with renewed vigour and determination. How do the Government plan to adjust that balance or, I suggest, potential imbalance? Do the Government recognise that perhaps the best contribution Britain could make to the security of Taiwan is to ensure that Putin’s Ukraine gamble fails?
It was somewhat surprising to see nothing in the report, or in the response to it, about China’s role as a nuclear weapons state, one which without much shadow of a doubt is substantially increasing its nuclear capabilities and arsenal. The need to draw China into a serious discussion of strategic stability between the P5 recognised nuclear weapons states is surely more necessary than ever, however daunting the obstacles may now look in the short term. What is the Government’s view and policy on that critical issue?
I found some contradictions, in both the report and the Government’s response to it, between the section on China’s role in the multilateral system, on which the report and the Government’s response were critical and rather negative, and what was said about the handling of some of the vital global multilateral challenges such as climate change and trade rules—and one should probably add health pandemics to that list. The report states bluntly:
“The challenge of climate change cannot be addressed without engagement with China.”
That surely cannot be gainsaid, in which case we will have to accept that China will need to play a major role in the search for solutions to these challenges. There I slightly differ from my noble and gallant friend when he said that we must lay down the rules; good luck to him, going off to the Chinese, telling them that we need their full commitment to climate change and saying, “By the way, here are the rules”. That sort of approach may be manageable with Russia, which can be treated as a pariah state, but it cannot be successfully used with China.
The problem of China’s human rights record, which several noble Lords have referred to, clearly cannot, should not and must not be ducked—whether one is talking about Xinjiang or Hong Kong. However, we need a rapier rather than a battle-axe when responding to the abuses taking place. Do the Government agree with that analysis? By the way, how will we handle China’s bid to join the CPTPP if, as is to be hoped, we succeed in joining that group before China does and thus acquire a say in China’s accession? How will we use that say?
In conclusion, I add one caveat to the committee’s broadly very welcome call for a clear British strategy towards China. It must surely be evident that Britain cannot, on its own, hope to fashion or apply such a strategy. We must work one out in concert with our main allies and partners. We also need to recognise that we will not get a lot of support for such a strategy from the wide range of countries in Asia, Africa and Latin America, which have been referred to by many participants in this debate, if we frame it simply as a “with us or against us” choice and, even more so, if we continue to shrink our overseas aid contribution to helping these countries face their own main challenges. We need to reach out to like-minded countries to fashion this strategy and not simply wrap a towel around our head and produce it ourselves. I noticed that the advice that the Foreign Minister of the European Union gave to the Heads of Government who are meeting today on toughening up the EU’s policy towards China bore a singular resemblance to the views expressed by many noble Lords around this Room this afternoon —so I think we know where to start.
Lord Bethell (Con)
My Lords, it is a great privilege to follow the noble Lord, Lord Hannay, who speaks with such wisdom and experience in these matters. I thank my noble friend Lady Anelay, the chair of the committee, for bringing this remarkable report. I echo my noble friend Lord Howell in saying that it was always a hard-hitting, wake-up call of a report, but it is even more relevant today. While the delay is regretful, this debate could not be more timely.
I completely agree with those speakers who have noted the failure by the Government to publish a clear China strategy. The noble Baroness, Lady D’Souza, was quite right when she said that that is a big mistake. My area is that of innovation and I just want to talk about what the implications are of that mistake in that area of innovation.
I saw for myself as a Health Minister during the pandemic the critical importance of trade and scientific dialogue with China. When the supply chains collapsed, I was on the phone trying to rustle up PPE from suppliers literally standing on the tarmac at Hong Kong airport. I had a role in the £3.5 billion-worth of LFDs that have been bought off China and which have been incredibly important in our battle against Covid. I also gave ministerial oversight to the development of new therapeutics and diagnostics, often with Chinese academic partners and suppliers involved. So I am in no doubt about the value of Chinese scientists to some of the great challenges of our time, including fighting disease and climate change.
However, we are entering a period where the CCP has outlined a clear manifesto for technological supremacy in a number of strategic fields—fields that we have a very keen and important interest in. Launched in 2019, as many noble Lords know very well, the Chinese Government’s “Made in China 2025” programme is a highly sophisticated state-led industrial policy, which has a clear purpose of making make China dominant in global high-tech manufacturing. This is, I am afraid, an example of China turning in on itself, making preparations in case there is a confrontation with its rivals. We would be absolutely foolish to ignore this. We should take this 10-year plan seriously as a piece of hard-edged industrial strategy with key metrics and a ruthless approach to success.
We know a lot about China’s approach. Beijing’s hybrid innovation system blends academic collaboration, industrial partnerships, cyberespionage, direct investment and influence operations to enhance China’s comprehensive national power and, in particular, to acquire modern technologies. I can report that it is absolutely working: China is making remarkable strides towards realising its dream of technological self-sufficiency. Chinese companies have caught up and even surpassed western firms in key strategic industries such as 5G, genomic science, AI, quantum computing, space and aerospace electronics. This does not necessarily contribute to the sum of human happiness because, unfortunately, China is at the same time becoming a competitive, authoritarian, imperial power, not necessarily apt to share its technological advantages. We will suffer if it dominates strategically important industries.
We should not give up in this battle for technology. We know that we have keen advantages still in important areas. The area of vaccines is one area where we have demonstrated the strength of our science. That is why I welcome the change in rhetoric from “golden age” to “global threat”. But the implementation of the Government’s new thinking is worryingly slow, as many noble Lords have noted, and I want to give two illustrations of the problem.
Let us take for instance the area of medical devices, an industry that we have very strong capabilities in, and one of the strategic industries identified in “Made in China”. China lacks technological leadership in this area, and it is therefore a valuable market for European and American companies, as China imports over 70% of its medical devices. Given the importance of this sector to the resilience of the health system, the Chinese Government have worked on a five-year plan to make at least six companies in China reach the top 50 globally from pretty much a standing start. It is going very well for them. During the pandemic, as my noble friend Lady Anelay pointed out, Chinese firms boomed. Off the back of that success, in the last few months, Chinese ministries and commissions issued notices prohibiting all public medical institutions from procuring imported medical equipment without approval. Overseas firms are being pressured into technology transfers. Many are backing off trade and production in China, with an impact on jobs at home. Meanwhile, Chinese medical technology firms are beginning to use their domestic market power to drive down costs.
We have already seen in fields such as telecoms and solar energy how Chinese companies can use domestic market power to dump product and crush our businesses. If we do not have a thoughtful fight-back, we can lose technological advantage in an industry that protects our people, provides jobs and is critical for a better life. That is why it is worrying that Chinese investors have such a strong presence in the British life sciences sector, embedded as investors, vendors and suppliers. For example, Tencent, China’s leading investment house, is an absolutely remarkable investor that takes bold creative investments in some of the most strategically important growing companies in the world, including British companies such as Oxford Nanopore and Congenica. Some British firms would not have flourished if Tencent had not got involved. But we should be worried if British investors cannot make the same investments in similar Chinese firms.
We should review our laissez-faire attitude to Chinese investment, now that the CCP has picked up its pace for dominance in this key life sciences sector. Whatever Tencent’s current governance arrangements, we have seen how the CCP can apply coercion on Chinese companies. How would we feel if, say, China invaded Taiwan, international relations deteriorated, and an investor with considerable China-state connections owned stakes in some of the most strategically important companies in the UK? This is a really important question, and I do not have the answer, but it is a question that the Government need to answer, and I do not know who is going to provide that up-to-date answer that reflects the latest events.
Secondly, we should be aware of the strategic threat around some of these industries—for instance, the genomics industry, which has grown massively after Covid-19. The value of health data now represents a new battlefield for parliamentarians, regulators and national security protectors. The CCP sees genetic data and genomics as a priority industry to target as part of its “Made in China” programme. It is acquiring and exfiltrating huge datasets to power its AI machinery for global surveillance, political control, mass disinformation and military strategic advantage. These datasets and the AI machinery will be key to future warfare and therefore have huge implications for our national security.
Allies in America, Australia and Europe recognise this threat and have sought to control the risk, including by blacklisting Chinese genomics companies, such as BGI Group, in response to human rights concerns and, possibly, participation in the persecution of Uighur Muslims. In the UK, BGI has links to British universities, companies and institutions on a grand scale, for instance with the University of Birmingham, the University of Exeter, the University of York, the University of Plymouth, Cardiff University and Newcastle University.
My fear is that we just do not understand the risks involved in commissioning genomics firms with close ties to the Chinese state—firms that have demonstrated the capability, resources and intent to misuse genetic data gathered from around the world. We do not understand what is being done to help keep this data safe. We seem to be relying on GDPR, and we are ignoring Article 7 of China’s famous national intelligence law, which states that
“organisations and citizens shall support, assist, and cooperate with national intelligence efforts”.
As the noble Lord, Lord Alton, rightly reminded us, we are at risk from Chinese Government-linked companies, and have sanctioned, for example, Huawei, Beijing Infinite Vision Technology and Hikvision. However, despite calls from MPs, noble Lords and campaigners, in the more sensitive area of human genomics the UK Government do not seem to show the capability to take even minimal action.
There is progress. The Procurement Bill and the National Security Bill present vital opportunities to address the UK’s one-dimensional approach to national security and plug the serious gaps in our coverage. I pay tribute to the Government for statements from the Prime Minister—as she was—and the appointment of Ministers such as Tom Tugendhat and Nus Ghani.
However, the noble and gallant Lord, Lord Stirrup, is right: there is no sign of implementation behind that intent. Even if the powers are now on—or heading for—the statute book, I do not see the implementation plans, the resource building, the institutional infrastructure or the expertise recruitment to tackle these complex issues. When I was a Minister and had concerns about national security, I was met with a fuzzy and unclear response, and I am not sure that has changed.
My specific concern is that, despite the warnings of Ken McCallum at GCHQ about tech theft, there is no mechanism for answering the Tencent or the BGI questions. Where is that China policy that should provide the strategic direction? Who are the people who should be thinking through these risks? Which office at BEIS or elsewhere should be responsible? Where is the risk assessment published? The noble Baroness, Lady Blackstone, emphasised the engagement with risk assessment, but who will actually do that risk assessing?
Speeches and laws are all very well, but our relationship with China is changing very quickly and we need agile, expert trade infrastructure so that we can walk the very delicate line that maximises valuable global trade and protects our national interests against a formidable threat.
That is why recommendation 56 in the report is so important. I join the committee in calling on the Government to publish a detailed plan for implementation of the National Security and Investment Act, to provide confidence for overseas investors and to help us understand how investment will protect British interests.
I support recommendation 57, calling on the Government to conduct scenario planning on supply chain vulnerability and identify where action is needed to mitigate the risks. I support recommendation 63 calling on the Government to conduct an impact assessment of the potential consequences of increased political tensions between the UK and China on British businesses or Chinese investment.
We have a lot on, but I urge the Minister that there is not much time to put in place this implementation so that we can avoid the inglorious scramble we saw when Russia invaded Ukraine—and that was a much less important trading partner.
Baroness Coussins (CB)
My Lords, one of the report’s conclusions is that:
“An increased knowledge and understanding of China—including its languages—within Government, the civil service, and the public more generally will be crucial for both constructive engagement and managing periods of stress.”
The committee calls on the Government to provide greater support for Chinese language teaching and cultural exchange with China—an issue also touched on by the noble Lord, Lord Goodlad. I declare my interest as co-chair of the All-Party Group on Modern Languages, and my other language interests, as set out in the register.
The government response to this conclusion and recommendation was positive and pointed to the Mandarin Excellence Programme, the MEP, which funds the teaching and learning of Mandarin in state schools, aiming to
“provide an increased pipeline of fluent Mandarin speakers to meet the future business and economic needs of the country.”
Set up in 2016, the MEP has been extremely successful. Indeed, since the Government’s response to the committee’s report was published, the figures have improved still further, with over 8,500 pupils enrolled to date.
GCSE results have been excellent, significantly above the national average, with 91% of the cohort achieving level 5 or above last year, and 72% with level 7 or above. In one north London school with a very mixed intake, the entire cohort achieved level 9. In addition, PGCE recruitment is going well and is back to pre-pandemic levels, which is a lot more than can be said for MFL teacher recruitment more generally.
An independent evaluation of the programme found that it was well-designed and balanced, was achieving its objectives and was having a national impact on the numbers of pupils studying Mandarin over and above those in the MEP schools. Research published earlier this year by Cambridge University described the MEP as an exemplar model which could be replicated for other languages. Even more significantly, in the context of this Select Committee report, it concluded that, if language barriers were removed and more was invested in the teaching of Mandarin, the UK could increase the value of its exports by £5 billion a year.
The UK’s languages deficit has long been acknowledged as one of the barriers to export growth. In the SME sector alone, there is good evidence that language capabilities add 30% in value to success in export growth. The UK’s deficit inhibits both recruitment and employability. The CBI has said that better foreign language skills are critical to increasing the UK’s global competitiveness and ensuring that young people have the high level of cultural awareness that supports a successful career. The Government are to be congratulated on supporting the MEP.
The reason I wanted to speak today, in the context of this report, is to caution against throwing the baby out with the bathwater by responding in a disproportionate way to pressure to ban the Confucius Institutes which support the MEP, and instead to work with Taiwan rather than China for the teaching of Mandarin. These concerns have been expressed by the China Research Group of MPs and the Foreign Affairs Committee of the other place, and several others.
The Confucius Institutes have been described as effectively an arm of the Chinese state, which I have no doubt is a perfectly fair assessment, but the implication that they are having some sort of undue influence over the UK students learning Mandarin with the MEP in our state schools is, I suggest, rather wide of the mark. We should be clear that these worries are not shared by the students, parents, teachers or head teachers involved in the MEP.
Katharine Carruthers, the director of the consortium consisting of University College London’s Faculty of Education and Society, which actually delivers the MEP in conjunction with the British Council, points out that the DfE contract for the programme is with UCL, not the Confucius Institutes. In addition, every school participating in the MEP is responsible for engaging its own teachers locally, in exactly the same way as they employ teachers of Spanish, French or indeed anything else. The teachers are not provided by the Confucius Institutes; they do supply guest teaching assistants from China, but these are supplementary to the core classroom teachers. Some Confucius Institutes, however, also engage with Mandarin teaching in universities, and it is there that there is a potentially legitimate concern that some universities need to exercise caution to ensure that Chinese studies there are not influenced or delivered by Confucius Institutes.
There would be a major practical challenge to the support of the development of Mandarin teaching in schools if there were a switch to Taiwan from China, with obvious significant geopolitical ramifications too. The MEP’s main practical challenge at the moment has been in sustaining pupil visits to China, because of Covid restrictions, but a comprehensive programme of virtual interactive learning with the help of 16 universities right across China has been able to fill some of that gap. It is difficult to see how this could be matched by far more limited Taiwanese institutions and resources.
In conclusion, I ask the Minister two questions. First, will he ensure that his colleagues in government, across various relevant departments, are fully briefed on the importance and success of the Mandarin excellence programme and understand that the role of the Confucius Institutes should be seen in its proper perspective, and that any action should be proportionate and properly targeted, given the actual structure, control and delivery of the programme in schools by UCL and the British Council? Leave the schools alone and let them get on with it—but, at the same time, closer monitoring of the situation in some universities is clearly advisable.
Secondly, I understand that government funding for the MEP has been guaranteed until 2024, with an expectation that it will be extended for a further year to 2025. Will the Minister confirm this and commit to pressing the strong and positive case for continued funding after 2025? This would be good for schools, good for our young people and their future employability and, as the Select Committee report concludes, good for UK-China relationships, not just in security and trade but in the all-important intercultural understanding that underpins all those geopolitical challenges.
Viscount Waverley (CB)
My Lords, I absolutely agree with the noble Baroness, Lady Coussins, but will express it differently. That difference is contained in the title of the report, which refers to a “void”. We are far short of understanding how to deal with China—and rather worryingly, that pertains to the US as well.
The noble Baroness, Lady Anelay, referred to the next update of the integrated review possibly being delayed until next May. Continuous review is fundamental in today’s fast-moving world. I suggest that a rolling update should become the norm. She also referred to supply chain issues. Having returned from India and the Gulf last week, I believe that there is merit in encouraging countries such as India, and including countries such as Turkey and Brazil, to assist in the diversification of supply chain issues—not just for the UK but globally. This can also help the economies of developing nations.
The Government have become increasingly hawkish towards China and formally designated it a threat to Britain, with the redesignation bringing the UK’s official position towards China closer to its stance on Russia. I reaffirm at the outset that the Uighur situation is an abomination, the Taiwan threat real and regrettable, and the Hong Kong circumstance sad and unbecoming for a state of the importance of China. My overall assessment is that China is becoming more inward-looking and protectionist, which is not helped by constant hostile rhetoric, with the deterioration of relations transitioning from hesitation to deep freeze and China signalling alignment away from being a rule-taker to a rule-maker in the international community.
China is a major trading, investment and supply chain partner, but its economy is at a crossroads, with slowing growth and increased debt and facing a property crash crisis. However, it is currently the world’s second-largest economy and the world’s second-largest public capital market, with the third-largest stock exchange and an IPO market of importance. It is responsible for one-third of global emissions, but is also the world’s largest producer of renewable energy and committed to reaching peak carbon emissions by 2030 and net zero by 2060.
Its strategy is, on the one hand, to make its economy more resilient against external shocks and to fulfil self-sufficiency to counter the hostile geopolitical environment by being more reliant on the economies of scale of its large domestic market and increasing control over supply chains where import dependencies exist, most particularly for food, energy and high-tech inputs. The dual-circulation strategy, the interplay between domestic circulation of production, distribution and consumption by insulating the domestic market, whether in terms of natural resources or technology, is to vertically integrate its production. Chinese decoupling from the US is advancing, with China’s master-plan to enhance its position through third-market engagement available through the belt and road initiative.
It should be remembered that the UK became the first western country to join the Asian Infrastructure Investment Bank, with a previous US Administration accusing the UK of “constant accommodation” with China. London’s stance towards Beijing has now shifted from the so-called, perceived “golden era” to a complex phase of diplomatic and military tensions and scrutinised economic relations, compounded by US pressure. US national security strategy since the integrated review reflects a world order where great power competition is back in town, representing a profound move away from a not-distant past advocating for a deeper relationship.
The integrated review made an economic and military case when it stated that the PRC is
“the biggest state-based threat to the UK’s economic security”
and that its military modernisation and assertiveness threaten British interests in the Indo-Pacific. To China, a Cold War mentality of encirclement exists. It believes that London, with its Pacific tilt, is advocating an anti-China diplomatic and military coalition in the Indo-Pacific, with the Government’s U-turn on Huawei, combined with the first deployment of HMS “Queen Elizabeth II” aircraft carrier to the Pacific, and the trilateral AUKUS security pact between Australia, the UK and the US, escalating the relationship to a new hostile era.
How comfortable is the UK, in reality, in attempting to organise a unified anti-China front behind the Build Back Better World label? The G7 Cornwall meet suggested a differing narrative in the making, but now increasingly there appears acceptance of the US narrative and Washington’s framing of the US-China strategic rivalry as a life or death struggle between democracy and autocracy, treating China as an adversary. There is no question but that the urgent need is to conduct an overall review and analysis of our relationship. We cannot afford to ignore China and must seek to balance the relationship in a manner which draws together shared interests and aligns on underlying challenges, or we will face a steady drumbeat.
All this is a far cry from the economic mantra of a global Britain, with a view held by some that if we deal only with countries that share our values, we will have a limited range of countries with which to engage. Constant barking, confrontation and economic sanctions, including diplomatic restrictions and isolation, can have their place, but I wonder how effective and sustainable they are and whether they are likely to achieve positive outcomes. We should be wide-eyed when taking a tough policy line on China without clearly understanding what the impact, including economic, will be. I have already mentioned that, for me, the key takeaway from the report before us was the use of the word “void”, which encapsulates our lack of understanding of the techniques required to engage in a manner that advances or contains a relationship.
So, how to engage with the Chinese state? Engage we must, but we must certainly lead by example. I fear that, if we fail to do so, it will have consequences for the longer term, including a clash of ideals that would include the likes of Russia and Iran, which are anxious to drive a wedge between our immovable principles. An accommodation must be sought, otherwise I see no alternative other than a slow drumbeat emerging over the horizon. The outcomes of the current party congress, which will set the tone on domestic policies and international trade relations for the next five years, should be analysed with care and taken as a renewed engagement starting point.
I ended a recent contribution with the conclusion that
“a window still exists to pour oil on troubled waters”.
However, I went on to say:
“Western policymakers and diplomats need to up the game and face the gravity of the situation with a supercharged, innovative carrot-and-stick strategy.”—[Official Report, 14/7/22; col. 1629.]
I remain of that view.
Lord Purvis of Tweed (LD)
My Lords, as always, it is a pleasure to follow the noble Viscount. This has been a characteristically serious debate which has done credit to the excellent report comprehensively introduced by the noble Baroness, Lady Anelay. I had the pleasure of serving on the committee under her chairmanship, and indeed under that of the noble Lord, Lord Howell. We were blessed in this debate with contributions from both those chairs of the committee.
The IRDC is a significant and senior committee of this House, and the delays before its reports are debated are unacceptable. The fact that we made the same appeals when we debated the committee’s report on sub-Saharan Africa, which had been delayed and delayed until we had an opportunity to debate it, springs to mind. I hope that this is the last time there will be such a delay before we are able to debate such a significant report from this committee, because one of the purposes of these debates is not only to hold the Government to account but to inform the whole House of how we conduct that work in holding the Government to account. In that regard, I was struck by the contribution of the noble Lord, Lord Bethell, who rightly highlighted how, in many respects, there is a delicate line to tread in our relationship with China, but in order for us to tread that line, there needs to be the guidance of a clear government strategy. The fact that such a strategy is absent was the underlying proposition of the committee. It struck me when the noble Lord said that as a Minister he sought clarity and that it was “fuzzy and unclear”.
The Government’s response to the committee’s report said:
“The National Security Council continues to provide clear direction for the Government’s China policy. It is supported by the work of the Integrated Review Implementation Group on China”.
Can the Minister tell us why the National Security Council was abolished by the current Prime Minister, Liz Truss? I understand that it has now been replaced by a Cabinet sub-committee, which will not provide the clear direction that is necessary. What is the current situation? Is there a current situation? If not, it highlights the void not just in government strategy but in government operation. We cannot afford that as a country.
This is my opportunity to state on behalf of the Liberal Democrat Benches that what the Conservative Government are doing to our international reputation at the moment is just unacceptable. During this debate, I had a message on my phone from a good friend of mine who served in the United States Cabinet, who was in shock when he woke up to see the news from the UK. He was bemoaning—and sympathising—the fact that we are a laughing stock. He said: “The UK is too important to be laughed at.” That is from a former senior US official. I agree with him.
This debate on this topic really must be the opportunity to start providing more clarity on our way forward for UK relations with China. The committee highlighted—as have the contributions today—a whole series of areas where that strategy is necessary. It highlighted that there has been a shift, but it is unclear where that shift is to. We are, theoretically, currently in year 7 of the golden decade announced in 2015. Whether this golden decade is now in deep freeze or is still government policy for trade and development, I do not yet know. The noble Viscount mentioned the Asian Development Bank; can the Minister clarify whether our support for that is still categorised under overseas development assistance or whether that has been cut? George Osborne said during that visit in 2015—like my noble friend Lord Teverson, I was there in the hall, but I did not have the opportunity of shaking the President’s hand—that
“No economy in the west is as open to Chinese investment as the UK.”
Is it still? What is the Government’s intent for that? The Government’s response to the committee did not provide a great deal of clarity on that.
When the House debated the committee report on sub-Saharan Africa, so many areas combined with regards to our relationship with emerging markets and emerging countries, as well as the need for clarity on China. It is an absolute fact that, in the absence of a clear direction for our relationship with emerging markets and countries in Africa, China will fill that void. In the absence of a clear strategy, understanding and stability in our relationship with China, other countries will not see us as a reliable partner either.
We recognise that China’s development and rise has been remarkable, lifting millions of its citizens out of poverty and single-handedly having a major impact on overall human development. However, we cannot use just one indicator alone. The noble Lords, Lord Alton and Lord Bethell, and others have highlighted these issues with our trading relationship—I will return to that in a moment. Over this period, growth in UK-China trade has been marked, but it is not equal growth, because the UK now has a trade deficit with China in goods of more than £40 billion. That is at an unprecedented scale in our trading history. Under this Government, this deficit has grown. We are now in the unhappy position that trade with autocracies has risen under this Government, but trade with democracies has fallen. This is not good for our national security, nor is it good for our resilience as far as our own industry is concerned.
This report is about how the UK Government now respond to these concerns. While recognising China’s growth in the positive areas, my party and others in this debate have recognised some of the concerns, including China’s challenges to the international liberal order, such as at the UN Human Rights Council. I have a little more sympathy with the noble and gallant Lord, Lord Stirrup, than with—if he will forgive my saying so—the noble Lord, Lord Hannay. The issue about rules, values and standards is not necessarily that we impose them, but that we work with allies on what we consider to be the most beneficial areas. If they are unclear on our approach in some of these areas, an alternative approach will become the norm. From data transfer to e-commerce, regulatory reforms, privacy, and human rights within supply chains, we have been at the forefront, with consensus, of establishing some of these norms and rules. There is, in many areas, a competing narrative with which, if we are not robust, they will be filled. On human rights abuses, which have been referred to, we have debated them repeatedly and, unfortunately, will have to continue to do so.
We have heard in the debate about the aggressive posturing towards Taiwan, including the latest address by President Xi in the congress. A further concern is surveillance technology, which is used at home in China as a tool for suppression but has been bought here in the UK and by others abroad without the level of reliance on a set of standards, which we believe would be right for the use of surveillance technology. Of course, we have seen a regrettable and increasing trend of interference in civic debate in other countries—and, as my noble friend Lord Campbell of Pittenweem said, here in the UK, just within the last 48 hours.
We strongly support the need for a comprehensive China strategy but, in our view, a comprehensive industrial strategy too. They are intertwined. I hope that we will see some clarity on this soon from a new Government. It will mean that the UK has to have a significant review of China’s preferential market access in a whole sweep of areas, from foreign direct investment screening to pension fund investments. It is not acceptable that local authorities and public sectors are not aware, when investing in a Chinese-indexed market, whether their investments are in regions and enterprises in China that are conducting significant human rights abuses. There needs to be much more clarity in this area. I have repeatedly asked the noble Lord, Lord Ahmad, whether any of the preferential agreements signed in 2015 have been reviewed in light of the grotesque human rights abuses, and the Government have failed to provide any clarity as to whether they have.
In an industrial strategy, we need a review of supply-side security. The noble and gallant Lord, Lord Stirrup, and others are absolutely right. On concerns with regard to Taiwan, how resilient is the UK if China seeks to weaponise our trade deficit in certain key sectors? We have seen this within the domestic UK market with regard to chip supplies, as the noble Lord, Lord Alton, said. Why has not the UK opened up discussions about the equivalent of a US chips Act? Why is the United States looking at this in a strategic way, while the UK has, as the committee put it, a complete void in that regard? We must be willing to cease research co-operation and technology sharing if our Chinese colleagues are unable to provide adequate reciprocity and transparency in the regulatory framework.
The noble Lord, Lord Bethell, was absolutely correct to raise the issue of data. I am genuinely concerned about the Government’s current approach. He rightly said that China has access from government officials. The UK has now signalled that we will be leaving GDPR principles, but there is no clarity as to their successor. In some of our key sectors, the service sector and financial reform, this is critical, and I hope that the Minister has a response in his remarks.
I close on Hong Kong. It is a necessity for the UK to audit UK-based assets owned by CCP officials, state-owned enterprises and Hong Kong officials. We need to review bilateral FDI with Hong Kong relations. I hope that the Minister can say that the global human rights sanction regime is now being considered very carefully with regard to officials in Hong Kong. All those areas are vital, and we need to signal that we are now in the process of considering UK resilience in our relationship with China, in case of disruption. It is not a signal that we are seeking to remove ourselves entirely from our partnership with China or indeed to have, in certain areas, a weakening of the positive cultural relationship with the people of China. However, it is necessary for the United Kingdom to be resilient and to stand up for the rules, standards and values that we helped shape and should invest in, and we should work on with our partners.
Finally, I could not agree more strongly with my noble friend Lord Teverson. Many of the countries in emerging markets and developing nations that are looking at the UK and China at the same time see that the UK has stepped back. We have slashed support with very little notice, and there is a lack of stability and reliability in our relationship with them. That is creating a new void which China will fill, and that will be to the United Kingdom’s long-term detriment.
Lord Collins of Highbury (Lab)
My Lords, I start by commenting that we have of course all been looking at our mobile phones during this debate. I agree with the noble Lord, Lord Howell, that the Prime Minister’s resignation earlier today is not a matter for debate now, but I also agree with the noble Lord, Lord Purvis, that we should not underestimate the impact of the Government’s actions on our global reputation and credibility. It will come back to haunt us.
I very much welcome this report, and certainly the excellent introduction by the noble Baroness, Lady Anelay. We have discussed elements of the report in previous debates, and I repeat what we said then: this is about making a very clear case for a consistent written strategy setting out the Government’s security relationship with China. As long as Ministers maintain their policy of ambiguity, we cannot be confident that they are properly balancing the need for economic engagement with the importance of the UK’s interests and values.
Unfortunately, as noble Lords mentioned, the response to the report gave no further indication of a wide-ranging strategy—far from it. Instead, there were only piecemeal points about the UK’s interests and values. It focused on things such as the importance of avoiding strategic dependency on China. The Government argued that the National Security Council provided clear direction for their China policy, and that it was supported by the work of the integrated review. I too welcome the fact that events have overtaken us and the integrated review will be re-examined in the light of Russian aggression. I accept that that does not undermine the case that the committee has made. The fact that events have overtaken us does not undermine the fundamental case for a clear strategy in dealing with China.
As the noble Baroness said in her contribution and in her follow-up letter to the Minister, ambiguity and uncertainty are
“damaging to businesses and detrimental to our partnerships and alliances in the region.”
I hear what the noble Lord, Lord Howell, said about those alliances, but unless we are clear, they will not know what we stand for. The noble Baroness wrote that it was unclear how the Government intended to balance human rights issues with the economic relationship with China, and how they
“will prioritise when these considerations clash.”
Amanda Milling said:
“We will uphold our values and protect our national security while promoting a positive and reliable economic relationship”.
As I have asked in previous debates, can the Minister say what exactly is the extensive programme of engagement with UK businesses to ensure that our policy is fully understood? The noble Baroness was absolutely right: the ambiguity continues to damage both our business interests and our political interests. Noble Lords will want to hear some concrete examples from the Minister, not just vague words.
The noble Baroness, Lady Coussins, mentioned the language deficit. It is a sad fact that, under the Conservative Government, the number of Mandarin speakers in the Foreign Office has fallen to a pitiful 14, the deployment of personnel to the strategically vital Pacific region has shrunk, and the often-mentioned China strategy is nowhere to be seen. The resultant drift and confusion undermine our position on the world stage, leave our allies unable to rely on British support and risk our technological and industrial advantages, while Chinese companies single out emerging technological advantages in areas such as semiconductors and biotech. Let me be clear. Labour will take a strong, clear-eyed and consistent approach to China, standing firm in defence of human rights, national security and international law while, as my noble friend, whose name I have forgotten—I am sorry.
Lord Collins of Highbury (Lab)
I had a mental block; it is age, I fear. As my noble friend Lady Blackstone urged, we will engage with China where it is in our interests to do so, particularly, as noble Lords have highlighted, in the global challenges we face that we cannot address unless we work with it, such as climate change, trade and especially global health. For years, the Government have turned a blind eye to human rights and national security concerns. Now they are divided and have no strategy, lurching between U-turns on issues such as Huawei and nuclear power.
In government, Labour will carry out a complete audit of UK-China relationships so that we can ensure the relationship reflects our interests and values and set a consistent strategy for the long term. China remains crucial to addressing those global challenges I have mentioned and is deeply integrated into the global economy. We will engage with China on the basis of our national interest and those clear principles but will not be afraid to speak out on human rights, particularly in Xinjiang, Hong Kong and Tibet. It is simply wrong that China has brought sanctions against UK parliamentarians for raising those concerns. I too pay tribute to the noble Lord, Lord Alton.
The brutal campaign of oppression in Xinjiang is a scar on the conscience of the world. In this House we have consistently raised the plight of the Uighur people, which the UN has said constitutes a crime against humanity and which our Parliament has voted to recognise as genocide. We support absolute, strong action, including a ban on cotton produced with forced labour, and the extension of human rights sanctions against the individuals responsible. As part of that strategy, a Labour Government will increase our independence in critical national infrastructure and will not repeat the sort of mistakes the Government have made in the past, particularly over nuclear power.
However, as the report and noble Lords have mentioned, it is really important that we underline our soft power activity, particularly the British Council and the BBC, which are key elements of an overall integrated strategy. I noticed in today’s Guardian an article showing how the Chinese Communist Party was using influencers in social media—it spreads without us even noticing that it is happening. What is our strategy in response to that? I do not see one. It is really important that we work cross-departmentally and across government to have that absolutely clear strategy.
As the noble Lords, Lord Howell and Lord Hannay, mentioned, we cannot do this on our own: it is really important that we work with our allies to provide real alternatives to China’s finance and investment in the developing world. Again, we have sort of turned a blind eye to that. The noble Lord, Lord Howell, is also absolutely right to mention the Commonwealth; our response to that has been minimal. In fact, as noble Lords have mentioned, we have seen how we have cut our influence by going to 0.5%. We use a statistic such as 0.5% and 0.7% but those bilateral programmes, particularly in Africa, were cut overnight. There was no plan or strategy—no understanding of the impact. Instead, they were cut straightaway. The speed of those cuts, not just the amount, was incredibly dangerous.
I repeat what has been said about the importance of our relationship with Taiwan. We absolutely support and want to see dialogue and peaceful moves to address those issues across the Taiwan Strait. We have been clear about our serious concern about China’s increasingly aggressive actions towards Taiwan and the attempts to intimidate its democratic leaders. We need to be clear about our support for that beacon of democracy. We also need to understand—I have said this about the global challenges—that we are not challenging the recognition issues that we addressed, but it is important that the globe does not miss out on the expertise that Taiwan has developed, particularly on global health. We should ensure that it is included in our discussions wherever possible.
I conclude by addressing the discussion this afternoon in the other place on the Urgent Question on the events in the Chinese consulate in Manchester. We had the Urgent Question repeat here, and I made the point to the noble Lord that it was absolutely essential that Ministers and the Foreign Secretary took responsibility and communicated the Government’s concern about these actions. The fact that it was left to officials and the ambassador was not summoned was a disgrace. It is time for the government to be very clear. Jesse Norman said in the other place that the ambassador is not in this country. We have seen clear evidence of what has happened in Manchester, and we cannot tolerate that those sorts of people who conduct themselves in that manner should be allowed to stay in this country for a day longer.
The Minister of State, Foreign, Commonwealth and Development Office (Lord Goldsmith of Richmond Park) (Con)
My Lords, I thank my noble friend Lady Anelay for tabling this debate and for her committee’s work, as well as for her introductory remarks. I thank all noble Lords for their insightful contributions.
Last year in our integrated review, the UK Government assessed that China’s increasing assertiveness and growing impact on many aspects of our lives will be one of the defining geopolitical factors of the 21st century. This is, therefore, a key and timely debate.
In line with the IRDC’s report, I will cover the UK’s approach to China, our trade relationship, regional security, and the importance of working with our allies and partners, and I shall do my best to answer as many of the questions that were raised as possible.
The global geopolitical context has changed greatly in the last year, and in response the Prime Minister has commissioned an update of the integrated review. Vladimir Putin’s invasion of Ukraine has threatened our collective security and stability, and it has had an acute impact on global economic resilience, supply chains and energy security. We will continue to press China to use its relationship with Vladimir Putin to push for an end to his war, rather than condoning or excusing his actions.
The noble Lord, Lord Goodlad, made the point that China’s influence on Russia is considerable. There is no doubt that that is true, so we continue to engage with China at every level—in Beijing, in London and at the UN—to make it clear that the world is watching what it chooses to say and do. Of course, we condemn any military support to Russia for its illegal invasion of Ukraine, and we expect China to stand up for Ukraine’s sovereignty and territorial integrity and to uphold its commitment to the UN charter. Without going into detail, I note the comments made by the noble Lord, Lord Howell, on China’s anxiety about Russia’s potential use of strategic nuclear weapons.
As the Foreign Secretary recently made clear in his speech in Singapore, it remains a top priority for the UK to pursue deeper engagement with our partners in the Indo-Pacific region. China is a major global actor as a G20 member, with a permanent seat on the UN Security Council. This Government are committed to doing more to adapt to China’s growing impact and influence. As we do so, our policy will be defined by our national interests, particularly our sovereignty, security and prosperity. It is in our interest to have a mature and robust relationship with China in order to manage disagreements, defend our freedoms and co-operate where our interests align.
One of the greatest strengths in our relationship with China is the link between the people of our countries. It is worth emphasising that the British-Chinese diaspora play a key role in our communities and culture. We continue to welcome hundreds of thousands of Chinese students to the UK and work to ensure that they are treated as well here as British and other international students are. International research collaboration, including within our universities, is central to the UK’s position as a science superpower. However, as a number of noble Lords suggested, we will not accept collaborations that compromise our national security, and we work closely with universities, funding bodies and industry to protect our higher education and research sector.
In response to the noble Baroness, Lady Coussins, who raised Confucius Institutes in particular and asked what the UK is doing about them, the Government obviously take seriously any concerns about the operation of international organisations at UK educational centres. Like all similar bodies, the Confucius Institutes need to operate transparently and with a full commitment to our values of openness and freedom of expression. As with any international collaboration, universities have a responsibility to ensure that any partnership with a Confucius Institute is managed appropriately and that the right due diligence is in place. We encourage providers with any concerns whatever to contact the Government directly.
A number of noble Lords mentioned the importance of engaging China on the global issue of climate change, and they were absolutely right to do so. The committee rightly observes that we cannot deliver our global climate goals without engaging with China. It is just not feasible; it is not possible. That point was well made by the noble Lord, Lord Teverson, and the noble Baroness, Lady Blackstone. As the world’s largest greenhouse gas emitter, and the world’s largest investor in renewable energy, China plays a critical role. In particular, we are working with China and other financiers of international coal to accelerate momentum and ambition for the global transition from coal to clean energy through our COP 26 energy transition campaign. As a consequence, and on the back of very extensive diplomacy in the run-up to COP 26, we were able to have an influence on China’s position. Noble Lords will know that China has committed to net zero by 2060 and has said that its intention, and its policy, is to see emissions peak by 2030, the end of this decade. China also committed to ending the financing of overseas coal, which we also pressed hard for in the context of our presidency of COP.
Scientific collaboration also plays a key role in mitigating climate change. The UK Government supported work by meteorological experts in both countries to model extreme climate change impacts around the world. We are increasingly working with China at the diplomatic level: first, to support efforts to secure an ambitious outcome for the CBD COP 15 in Montreal, at the end of this year; and, secondly, to follow up on commitments that we secured from China—quite late in the day, as it happens—to join other countries that signed the Glasgow leaders’ declaration, the commitment to end deforestation by the end of this decade.
Even more importantly, we secured a commitment from China’s biggest commodity trader, COFCO, to align its purchasing criteria with 1.5 degrees and our efforts to break the link between commodity production and deforestation. It was COFCO coming to the table that allowed us to encourage countries such as Brazil, under President Bolsonaro, to sign up to a commitment that they were absolutely not willing to sign up to that point. There are numerous ways in which we are seeking to work with China on climate change and the broader environmental challenge we face.
As an open economy, the UK Government welcome foreign trade and investment to support growth and jobs, including from China. However, we will not accept commercial activity that compromises our national security or values, and we have safeguards in place that enable us to engage with Chinese investors and businesses with increasing confidence.
The National Security and Investment Act came into force in January 2022. It is not specific to China and applies to all investors in the UK, regardless of nationality. We will not hesitate to use the Act’s powers to intervene if and where necessary—including to block the most concerning acquisitions. The Act’s annual report and final orders document the use of NSI powers to date, including to block two acquisitions by Chinese companies. In May this year, a package of measures came into force to update the UK’s export control regime. This enhanced our military end-use controls and added China to the list of destinations to which those controls must now apply. These changes strengthen our ability to prevent exports and address threats to national security and human rights.
In different ways, the noble Lords, Lord Campbell and Lord Alton, and the noble and gallant Lord, Lord Stirrup, referenced the controversy over Huawei, which rightly dominated the news for some time in the year before last. On 13 October this year, the Secretary of State for DCMS issued a designation notice to Huawei and a designated vendor direction to 35 telecom providers. This gives 12 specific restrictions to telecom providers in their use of Huawei. The Secretary of State has decided that these legal controls are necessary and proportionate to our national security risks. The UK is now on a path towards complete removal of Huawei from the UK’s 5G networks by the end of 2027.
The noble Lord, Lord Alton, also asked about Hikvision. I needed to check, but we continue to make clear our concern about human rights violations in Xinjiang—which I will come to in a few moments—including the use of mass surveillance and the technology used to facilitate it. We take the security of our citizens and establishments extremely seriously and have a range of measures, some of which I have just identified, to scrutinise the integrity of those arrangements.
The committee rightly identifies the risks to trade and investment and our supply chains in today’s increasingly interconnected world. We recognise that China has clearly set out to use its influence in the global economy to pursue its broader foreign policy objectives. We monitor this closely and are working to strengthen the UK’s critical supply chain resilience and avoid strategic dependency. This includes international collaboration with allies and partners to discourage trade restrictions and coercive measures.
My noble friend Lord Bethell emphasised this particularly well. To him I just say—he may even have been part of this—that BEIS launched the UK’s critical minerals strategy in July, which sets out measures to improve the resilience of critical mineral supply chains. Obviously, supply chains are complex and markets are volatile, with most critical minerals sourced from just a small handful of countries. China is a big player, for reasons that noble Lords have already identified.
I will move on to respond to comments from the noble Viscount, Lord Waverley, who talked about British investment partnerships. Through BII, we are providing a positive development finance offer in the Indo-Pacific region and around the world. Our offer is characterised by high standards, transparency and reliability. It supports the Build Back Better initiative—I hesitate to use the term—specifically as an alternative to the belt and road initiative. With a particular focus on climate finance and green infrastructure, we are helping developing and emerging countries in the Indo-Pacific meet their financing needs for infrastructure and enterprise.
The Government have deepened economic ties with our partners in the Indo-Pacific region in the last two years. We have signed free trade agreements with Australia and New Zealand and a digital economy agreement with Singapore, and we continue to make progress towards a new free trade agreement with India. We are also now in the second and final phase of accession to the CPTPP. By acceding to the CPTPP, the UK will join a valuable network of countries committed to the international rules and norms that underpin free trade. Meanwhile, as an ASEAN dialogue partner, and the only European country to have been given such status, we recognise the key role that ASEAN plays. We have made clear our full support for the ASEAN outlook on the Indo-Pacific.
The committee rightly recognised the importance of working with allies and partners in the Indo-Pacific and beyond with regard to China. We speak to those partners on a regular basis to understand their approaches towards China, their hopes and concerns and more. There is much common ground between us; we share many of the same concerns. We and our international partners have a clear message: China must live up to its international responsibilities.
A number of noble Lords rightly referenced the horrors in Xinjiang—in particular, the noble Lord, Lord Alton, who has raised the issue many times with me in our various exchanges in the Chamber. The noble Baroness, Lady Anelay, also spoke powerfully about the issue, as did a number of other noble Lords. Clearly, China must be held to the same human rights standards as all other members of the international community. The UK has led international efforts to hold China to account for its human rights violations through the UN and through our sanctions regime and measures to ensure that no UK organisations are complicit in these violations through their supply chains.
Given the gravity of the recent UN High Commissioner’s report, which found that China has carried out serious human rights violations—including, as the noble Lord, Lord Alton, said, possible crimes against humanity in the area—it is important that UN members are given an opportunity to consider those findings fully. On 6 October, the UK brought a vote to the United Nations Human Rights Council requesting a vote on the report. We did not succeed—the vote did not pass—and China successfully managed to stifle debate temporarily. However, we are convinced through our efforts that that will not endure and that we will be able to ensure that the report and its findings are properly digested and responded to in that key UN context.
I echo the comments of the noble Lord, Lord Collins, about those Members of Parliament in the UK who have been sanctioned by China, and pay tribute to them. Those sanctions are not only unwarranted but completely unacceptable, and we have provided, as noble Lords will know, guidance and support to those sanctioned by China, including a specialist briefing from relevant government departments on such things as cybersecurity.
Just to move to Hong Kong, China’s national security law has undoubtedly stifled opposition and, more than that, criminalised dissent. In response, the UK has declared China to be in a state of ongoing non-compliance with the Sino-British joint declaration. As noble Lords commented, we also introduced a bespoke immigration route for British national overseas status holders and their immediate family members. The UK will continue to stand up for the rights and freedoms of the people of Hong Kong, as agreed in the Sino-British joint declaration.
I think it was the noble Lord, Lord Purvis, who asked why the Prime Minister had scrapped the National Security Council—I hope that I have attached the question to the right noble Lord. My understanding is that she replaced it rather than scrapped it; she replaced it with a foreign policy and security council. From my understanding, there is no difference in function, so we are talking about semantics and a label, as opposed to anything meaningful.
Lord Purvis of Tweed (LD)
I am grateful for that clarification; perhaps the Minister could write to Members who took part. I looked at No. 10 Downing Street’s briefing on the new Cabinet sub-committees. It is a markedly different committee which includes trade; it is not simply a change of title with the same definition—as I understand it, but I am happy for him to write to me with more information, because it is important.
Lord Goldsmith of Richmond Park (Con)
I doubt I am qualified to get into a scrap on this issue, but my understanding is that there is nothing that the NSC was doing that is not done within the new council. But I shall seek clarity on the issue.
Regional partnerships are especially important in defence and security. We are deepening our engagement with Indo-Pacific partners bilaterally, multilaterally and with smaller groups of like-minded partners. The Five Power Defence Arrangements, where we work together with Australia, Malaysia, New Zealand and Singapore, reached their 50th anniversary last year. The AUKUS defence partnership with Australia and the US also strengthens regional peace and stability, and the UK has responded positively to the requests of our partners to build their capacity in maritime security. The deployment of the UK carrier strike group to the Indo-Pacific last year, where it engaged with 40 countries, demonstrated our commitment to partnership. Two Royal Navy offshore patrol vessels, now stationed permanently in the region, are further deepening this partnership and supporting capacity-building.
The former Prime Minister—my apologies: she is the current Prime Minister—has commissioned an update of the integrated review to be completed by the end of the year. That integrated review will take account of and reflect the dramatic changes that have happened as a consequence of Russia’s illegal invasion of Ukraine, but the priorities within the integrated review will remain the same: we are not looking at any dramatic shift.
I am so sorry, but I cannot read the names of who asked me certain questions; I apologise if I attribute them to the wrong noble Lords.
On Taiwan, the UK has a clear interest in peace and stability in the Taiwan Strait. As we have always said, the issue must be settled by the people on both sides of the strait through constructive dialogue, without any threat or use of force or coercion. On the issue of visits to Taiwan by western politicians—this is an example of where I cannot read the name of the noble Lord who asked the question—and specifically the visit of Speaker Nancy Pelosi to Taiwan, it is our view that China’s military exercises were inherently destabilising. They form part of a pattern of escalatory Chinese activity over recent months which includes a growing number of military flights near Taiwan. These are not the actions of a responsible international actor. They undermine peace and stability in the Taiwan Strait, which is clearly a matter of global concern. The UK’s long-standing policy on Taiwan remains exactly the same. We have no diplomatic relations with Taiwan, but we have a strong unofficial relationship based on deep and growing ties in an increasingly wide range of areas, underpinned by shared democratic values.
On the issue of academic freedom, particularly in relation to students from China here in the UK—a question raised by the noble Baroness, Lady Anelay—academic freedom and freedom of speech are obviously fundamental values to us in the UK. They are cornerstones of the UK’s world-class higher education system and central to a student’s experience. Universities have specific legal responsibilities to protect academic freedom and freedom of speech within the law. Academics, students and visiting speakers must therefore be empowered to challenge ideas and discuss controversial subjects. If institutions or individuals feel under pressure to compromise on those values, to compromise on academic freedom or freedom of expression, we strongly encourage them to come to the Government and provide us with that information.
It is essential to maintain the UK’s place at the heart of an unrivalled global network of economic, diplomatic and security partnerships—partnerships that deliver for British businesses and British people. That is why the Government continue to invest in China expertise and Mandarin language skills across government and our international network. This expertise, coupled with a deeper understanding of the wider Indo-Pacific region, will be even more important as China’s international assertiveness increases and our ties to the region continue to grow.
Before I come to the end, I want to address recent events in Manchester, which we discussed yesterday on the back of an Urgent Question. However, the Minister in the other place has since said more on the subject. Like other noble Lords, I have seen the consul general’s Sky News interview, which has been referenced in the debate today, in which he claimed that it was his duty to get involved in a physical altercation with a protestor. I would add, as my colleague in the other place did, that no matter how absurd those comments may appear to us, it remains important that we follow due process and await details from the police investigation before determining whatever actions we should take.
However, as the Minister for the Americas and the Overseas Territories, Jesse Norman, set out in the other place, we will take further action without any hesitation, depending on the outcome of that investigation. Our ambassador in Beijing will deliver a clear message directly to the Ministry of Foreign Affairs, and we will send a public message to the Hong Kong community in the UK. I was asked by a noble Lord—again, I sincerely apologise that I cannot read my own writing to see who it was—when that police investigation is likely to end. I am afraid I cannot give a specific date, but I will seek to extract one from the authorities and to share it if I can.
To conclude, the International Relations and Defence Committee’s report makes a valuable contribution to this hugely important topic. We welcome the committee’s scrutiny of our approach to China as we manage disagreements, defend our freedoms and co-operate where our interests align. I end by thanking my noble friend Lady Anelay once again for tabling this debate and all noble Lords for their insightful contributions.
Lord Alton of Liverpool (CB)
My Lords, I asked a number of questions—eight in particular—which have not been answered. I recognise that the Minister cannot answer everything in the course of the debate, but I did ask if he could give an assurance that he would write to answer those questions he was not able to deal with.
Lord Goldsmith of Richmond Park (Con)
I apologise if I did not answer all eight questions. I am quite sure I did not; I will check Hansard and will certainly follow up on whatever questions remain unanswered.
Baroness Anelay of St Johns (Con)
My Lords, I am very grateful to all those who spoke in this debate and contributed information based on their own expertise. They did so with a great depth and breadth of information, which has advanced the debate. Of course, I also thank my noble friend the Minister. I hope his offer to respond to all the questions posed by the noble Lord, Lord Alton, may be extended to other Members who have spoken today. I appreciate that the officials sitting behind him will be thinking, “Oh no”—or something rather stronger—but I know that the questions were asked with a genuine commitment to ensuring that our relationship with China is on the right track, so we would be grateful for responses to them.
It is always said that the first duty of any Government is to ensure that the defence of their country is secured. Of course, that includes economic security. At the beginning of the debate, I referred to my right honourable friend Liz Truss as Prime Minister, but during the course of the debate she has resigned.
Baroness Anelay of St Johns (Con)
As leader of the party—and ipso facto, et cetera. It is a brutal world we inhabit, as we know, but that is the nature of democracy, however it is defined.
I refer to my right honourable friend having expressed the view that the approach to China in the integrated review was no longer the full description. Instead of being a systemic competitor, she recognised it in its true state as a “threat” to the security of this nation. I was very pleased to hear my noble friend the Minister make that important differentiation between the description of the Chinese people and the description of the CCP as it runs the Government of China. It is important that we always all remember that. I hope that whoever succeeds my right honourable friend as leader of the party, and potentially Prime Minister, espouses the same views on China as expressed by Liz Truss.
My friend, the noble Lord, Lord Alton, referred to our visit just two weeks ago to the Gulf—to Bahrain and Qatar—and the fact that we learned there about the joint exercises shortly to be carried out by China, Russia and Iran in the region. It was a real example of “in your face” diplomacy by them. We should always remember that China likes to show what its power really is.
We saw a series of alliances, agreements and co-operation which works very well in that region. I put on record today my thanks to the Governments of Bahrain and Qatar for their hospitality. I also thank our UK ambassadors in Bahrain and Qatar for putting together such a really exhaustive—and exhausting—programme, which enabled us to see so much of the defence co-operation by our allies and friends in that area. I also thank our serving personnel there and those of the United States Air Force, whom we also met.
I mention this in a little more detail than other matters simply because it comes back to the matter of trust. The work we are doing in the Gulf, which is crucial to the security of this country, is possible only because of the way in which so many countries—France, countries across western Europe, the United States and others in the whole of the Middle East region—trust us and work with us to secure what is also our security. Therefore, I reflect very carefully on what the noble Lord, Lord Collins, said, about the importance of Governments remembering that they need to retain international trust if they wish to secure their objectives.
I hope that the objective of our Government continues to be to trade with China, because with its economic heft we need to do so, but to do it in a way that in no way undermines our adherence to the core values that have made this country a great place to live, and to ensure that it remains a great place to live for future generations, who must be watching with some concern today. They need to know that they have a safe future.