China

Lord Wallace of Saltaire Excerpts

Thursday 6th July 2023 Grand Committee

[Lord Wallace of Saltaire (LD)]

My Lords, I declare my interest as someone who went to Hong Kong for the first time when Britain was clearly running it with what one has to say was benign authoritarianism. I went to China for the first time as it came out of the period of deprivation and seemed very optimistic about coming to terms again with, and opening themselves to, the world. We all know that has now been disappointed, but we do not yet know where China is going.

I am conscious that there is a contested history of British-Chinese relations, and that in the Chinese reassertion of its role as a dominant power in east Asia after a century of humiliation, Britain helps to serve as one of the past humiliators. That is part of our problem in developing a different relationship with China.

We have in this country a large and significant population of citizens of Chinese ancestry or birth who contribute a good deal to our economy and society, not all of whom have links with Hong Kong. It is of great interest to all of us how we protect them, both within the United Kingdom and when they travel abroad. Perhaps the Minister could say something about the problem we have with the way other countries treat British citizens who are dual nationals. Both Iran and China appear not to recognise the validity of the British citizenship of people who were born with Iranian or Chinese nationality. How do we help to protect British citizens in those circumstances?

I think that we have a degree of consensus. We now recognise that China has taken a very unfortunate turn. We all thought that economic development and education would lead to a more open and tolerant society and less harsh government, but China has demonstrated that authoritarianism and state capitalism go with the deepening repression of dissent and religious and ethnic minorities and, so far, it has proved effective.

The noble Lord, Lord Alton, suggested that the Communist Party in China is running scared. We do not know how strong or how nervous the current regime is. I suspect that the answer will depend partly on whether the threat of a recession in China becomes real and whether the property market goes down, because economic delivery has been part of what has given the current regime its legitimacy.

We also agree that the regime’s behaviour in Hong Kong and, even worse, in Xinjiang has breached human rights in all sorts of ways and that Chinese attempts to interfere within the UK in monitoring the behaviour of Chinese students and pursuing our own citizens are completely unacceptable. I think we also agree that China is nevertheless too large and important and too powerful a player in the global order and the economy, and important in combating climate change and managing pandemics, to isolate or to attempt to exclude. We have to continue to engage, however difficult it is at present.

I am not sure whether we also agree that the UK is now too dependent on China in economic and industrial terms, and that derisking, by reducing our dependence on imports of goods, food and materials from China, is now necessary. I recognise that this would mean the Government accepting elements of an industrial policy to counteract the evident mercantilism of Chinese policy.

I note that the British Government and the British economy have limited opportunities to expand exports to China, given Chinese resistance to industrial exports and given the limits to accepting services provided from abroad at present. The width of the current trade deficit is such that the only option appears to be derisking by reducing imports. I welcome what the Minister has to say on this.

We must clearly work with others as we respond. I hope that we are working with our European partners, but I see that the European Union is now developing a policy to reduce dependence on rare earths and a number of other resources that come from China. I hope we are associated with that.

I agree strongly with the refresh of the integrated review that we need to develop “China capabilities” in government, but also in universities and think tanks, so that we can try to understand what is happening in China, even if my friends in universities who are China experts all tell me that they really do not know what is happening. That is extremely worrying. The prospect is that, at some stage, China will perhaps take another turn, reopen and turn away from its current aggressive approach to international co-operation. We need to be there for that.

I will end with two questions for the Minister. What does the IR refresh mean by its reference on page 31 to

“the review of how we can protect our higher education sector”?

When will that review be presented to Parliament or published?

Secondly, we know that the Intelligence and Security Committee has completed its report on China and presented it to the Government. Can the Minister give us any assurance that this will be published and presented to Parliament before we all rise for the summer?