United Kingdom and China

Lord Dobbs Excerpts

Thursday 7th November 2013 Lords Chamber

Moved by

[Lord Dobbs]

To move that this House takes note of the recent developments in the relationship between the United Kingdom and China.

[Lord Dobbs (Con)]

My Lords, I first express my appreciation to the House and its authorities for the opportunity to promote the debate—and, indeed, to all noble Lords who are here today. It is also a very pleasant duty to extend a warm welcome to the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Whitby, both of whom will be gracing the debate with their maiden speeches. On behalf of us all, I wish them nothing but fulfilment during their time in this place. I also declare my interest as a board member of Conservative Friends of the Chinese, but I do not wish to turn this into a partisan debate. It has been too long since we had the chance to debate these hugely important issues.

China is the world’s most populous country, with one-fifth of all humanity’s children, the second biggest economy on the planet and the largest standing army. We keep talking about Chinas as an emerging nation, but China is not emerging: she has already arrived, an ever-strengthening wind in our world. My own interest in China dates from my doctoral studies at the Fletcher School of Law and Diplomacy in the 1970s when China was in the throes of the Maoist madness that killed, murdered and even starved to death tens of millions of Chinese. China today is unrecognisable as that delta of misery which flooded into the Yellow Sea. The first thing I do, therefore, is offer my unstinting congratulations to the people and the Government of China for the enormous strides that they have taken since then.

Britain’s relations with China are long-standing, although they have not always been good. Our imperial past has left many scars; the Chinese still remember. However, both our worlds have moved on since those inauspicious days. Our economic ties have expanded enormously. In the past three years, British exports to China have doubled, although they are still less than those of France, way behind Germany and only a squeak more than Italy. Our trade deficit with China is far larger than those of our European neighbours. On the other hand, our financial services industry is a world leader. The plans to turn London into a major hub for renminbi dealing are truly exciting. What draws so much attention is the flow of Chinese investment into Britain. It includes investment into Heathrow and Manchester airports, our new nuclear power plants, the Lloyds building, the Royal Albert Dock, Thames Water, good old Weetabix, our next-generation telephone and broadband systems, and even London’s traditional black cabs. It is an arrangement of mutual advantage: they send us cuddly pandas and, in return, we send them Boris.

If we intend to strengthen our economic links with China, as we should, we need to give attention to many areas. I will highlight three. The first is that of visas. In the past three years, the Government have been making it easier for Chinese businessmen and tourists to come to Britain. All the required paperwork is now available in Mandarin, making the process of getting a visa much less onerous. George Osborne, in his remarkable trip to Beijing last month, promised even further improvements. We must, however, put those promises into action. Seven times as many Chinese visitors go to France as to Britain. There is more to be done.

My second point relates to our air links. We are going to have to work a lot harder to make sure we are competitive with the rest of Europe. We wring our hands about whether it should be Boris Island, Heathrow’s third runway, Stansted or Birmingham—yet, while we argue rather than implement, the Chinese just get on with it and increasingly fly to mainland Europe. We have been awful at our planning of airports policy. We need to get much better, and very quickly.

Thirdly, I will say a few words about education—that vital bridge not just between businesses but between cultures. We are by far the most popular destination in Europe for Chinese students and the third most popular in the world after the United States and Australia, yet we do far too little in return. At state-school level, only a tiny fraction of pupils are offered any education in Mandarin. The situation is improving, but far too slowly. At university level, we have only around 400 graduates a year who get any training in Chinese. The situation at postgraduate level is even more challenging. The British Association for Chinese Studies reports that, in the past four years, Britain has produced only 13 doctoral students covering all Asian studies—all Asian studies, not just Chinese studies. Noble Lords might be interested to know that the comparable figure for Celtic studies is 19. As delighted as I am that we rejoice in our Celtic roots, I think we need to dig rather deeper than that.

There are those who are fearful of our growing contacts. They are worried about the extent of Chinese hacking and industrial espionage, the theft of intellectual property, the inadequacies of Chinese commercial law, and the corruption that is endemic. There is no point in pretending that everything is as it should be. We still need to do business with not only our wallets but our eyes open.

Our relations with China stretch far wider than trade and commerce. The continued progress of China is key to the stability of the rest of the world, and she faces huge domestic challenges. China has the most rapidly ageing population in the world. Her workforce is about to start shrinking rapidly. The failures of the one-child policy are coming home to roost. It is said of China that she will be old before she is rich. Like so much of Asia, China is desperately short of energy and raw materials. However, her biggest challenge is perhaps the shortage of water. Much of it is polluted, unsuitable not simply for human use but even for agriculture and industry. I will give one statistic. The water table in Beijing has dropped 300 metres—a full 1,000 feet—since the 1970s. All this matters to us because China is far too large a part of our world to be ignored.

When China sneezes, the rest of the world catches cold. We talk glibly about China being monolithic—one country politically, economically and geographically—but that can be hugely misleading. China is confronted by immense internal challenges, and many observers believe that the most significant story of the next 20 years will not be the story of her inexorable rise but of her growing domestic problems. There will be rifts between the generations, the regions, the religions, the haves and have-nots, the literally wets and dries, between opposing ideas and conflicting needs.

The country’s interior is still one of the most backward parts of the planet. Some 400 million Chinese are desperately impoverished and have gained nothing from the great economic awakening. It is said that a rising tide will float every boat, but what happens when the water runs out? There are also ongoing and deep-seated concerns about human rights—of which I suspect we will hear more in this debate.

Of course, there is a new leadership in Beijing. From the speeches of Xi Jinping and Li Keqiang, it is clear that they understand the magnitude of the challenge they face. We should wish them well, for China at discord could be no friend of the West, let alone a partner in our future prosperity. This is where I want to leave my personal mark on this debate. Although in many eyes the rise of China is a threat to the West, I argue that the greatest threat comes not from China’s expansion but from the possibility of her implosion. That would cast a shadow over the world so intense that it would propel us into an ice age that would make our recent economic troubles seem like an outing on an iceberg. To borrow a phrase from Henry Kissinger’s recent book on China,

“no issue preoccupies Chinese leaders more than the preservation of national unity”.

To understand that point is to understand much about current Chinese policy.

If we criticise Chinese inflexibility towards Tibet, for instance, we should at least understand their genuine fear that unrest in Tibet will be followed by upheaval in Xixiang and other border regions, and then perhaps throughout the entire country. To some, it is an extraordinary concept that China could be a vulnerable member of the international community. It is a particularly odd idea when we see China becoming more assertive. She has border disputes with Japan, India, Vietnam and the Philippines. Her army is mighty and she is flexing her muscles. American academics talk of a new cold war as the United States pivots away from Europe and towards Asia, and as China increasingly joins forces with Russia. The seeds for future conflict exist; they could all too easily be sown.

Yet, inevitably, and happily, there is another side to all this. China has shown little appetite for external aggression. Many of these border issues are left over from the centuries of humiliation, and many of the disputes are about rocks and oil and, in the long tradition of Asian politics, about face. Very often the Chinese have found an accommodation. For instance, many feared that Hong Kong would be destroyed after it was handed back, but Beijing has been true to its word and handled our former colony rather like a precious Ming vase. We should not blind ourselves or be complacent; we must realise that the growth of China will inevitably create the need for change. Through that, it will create also the potential for conflict. She is already developing a more assertive foreign policy; she will insist on being involved in a dialogue over the future not just of border regions such as North Korea and Pakistan but of places further afield, such as Syria—as we have seen—the wider Middle East and Africa. The tectonic plates of our world are shifting.

But this is not a zero-sum game in which they win and we lose. We have our differences, but we also both have an overriding interest in stability. We need to develop a strategy of engagement with China—engagement, not appeasement—that is capable of recognising China’s legitimate requirements, making them compatible with our own and finding common purpose in the search for stability. We need to show an open hand rather than a narrow mind.

Britain has a huge amount to offer China in this process of change. It is not simply the economic stuff but our goods and financial services, our expertise in health care and our great creativity. We even have our history to offer. Britain was an exception to the rule that industrial revolution is inevitably followed by political revolution. All across Europe, crowns tumbled and thrones were toppled while, in Britain, we kept our traditions and our political system remained largely intact. China would like to learn from that example. It is perhaps ironic that the reflections of Edmund Burke on the proper order of things are probably read more widely in China than they are in Britain.

There is no need to be overawed on account of our much smaller size. Of course, Beijing had a brilliant Olympics; but, when it came to our turn, it was not just Mo Farah who showed the rest of the world a clean pair of heels; it was our entire country. It was Britain at her best.

Our traditions, our culture, our great British brand, our willingness to be open for business, the recent increase in British diplomatic staff in China, our top-level government visits—all of these, and many more, put us in an exceptional position to form fruitful partnerships with China. There is more to do, of course, but, if a journey of a thousand miles begins with a single step, the well of happiness starts being filled with the first drop of understanding.

The red eye of the digital dragon is staring at me, so I must wind up. I apologise for trying to cover hundreds of years of history and billions of pounds’ worth of interests in a single gallop. It has been a privilege of introduce this debate; now it will be my pleasure to listen and to learn.

--- Later in debate ---

[Lord Dobbs (Con)]

I am delighted and honoured that the debate has been so fruitful; it has overflowed with experience, insight and enthusiasm. I thank every Member of this House who participated. My noble friend Lord Green’s summing up has been most helpful; he has been for so long at the sharp end of things and his time at the coalface has been hugely productive. He deserves his retirement but we shall miss him. I must once again congratulate my noble friends Lord Whitby and Lady Neville-Rolfe who made their first speeches in this House. But my friendly neighbourhood Whip has whispered in my ear—a loud Chinese whisper—that we are out of time. I must apologise, therefore, for being unable to refer to other individual contributions. I hope that noble Lords will understand and forgive me for that. The debate has been a credit to this House. Its messages were put quite superbly and came across loud and clear. The Chinese sometimes say that Britain is a small island, a long way away, which makes a lot of noise. It means at least that they hear us, and that sounds like a pretty good place to start—and also to stop. I beg to move.

Motion agreed.