China: UK policy

Oliver Letwin Excerpts

Tuesday 7th May 2019 Westminster Hall

[John Howell (Henley) (Con)]

I will make a brief contribution. When I was appointed as the Prime Minister’s trade envoy to Nigeria, I was called in by the Department for International Trade and told that I would have to develop my own personal policy in relation to China, as I was going to come into contact with the Chinese all the time. Nothing was more exact than that. They are everywhere; they are bidding for all the major infrastructure projects, and doing so in a largely transparent way. That provides an enormous opportunity for us if we can get the terms of the deals right.

It was made clear that it was up to me how that should be handled. Should I see the Chinese as the enemy, as opponents or as potential friends and allies? Because I am that sort of person, I wanted to see them as potential allies. However, doing so means identifying the areas in which we can establish projects with them where we can, effectively, be subcontractors to them.

[Sir Oliver Letwin (West Dorset) (Con)]

Does it strike my hon. Friend as a little strange that he was given that advice?

[John Howell]

I do not find it strange in the slightest. It was absolutely accurate. To echo my hon. Friend the Member for Aldershot (Leo Docherty), it is an example of a practical approach to dealing with the Chinese on the ground in an overseas country.

[Sir Oliver Letwin]

But does it not strike my hon. Friend as a little strange that a country that for 4,000 years was half the world’s GDP, and that, as our hon. Friend the Member for Aldershot (Leo Docherty) pointed out, is reasserting its position now as a quarter of the world’s GDP and, by some standards, as the world’s largest economy, is one in relation to which our Department for International Trade believes it has to subcontract policy to a trade envoy?

[John Howell]

No, I do not find that strange at all. It gives me the flexibility I need as the trade envoy to Nigeria to deal with the Chinese in the way that best suits the opportunities that are available. That is certainly what I have done.

As I was saying, I am a friendly sort of individual, and I would like to see relationships built with the Chinese. However, doing that is difficult for a number of reasons. First, I quickly found that, whatever the product is, it is often quite shoddy. Do we want to be associated with that? Secondly, I found that no projects can be changed without a reference back to Beijing. That makes it difficult to deal with the projects on the ground as flexibly as I would like. Nobody on the ground has the ability to make the decision.

The last thing that I found, which is by far the most important, is that the Chinese leave nothing behind. When they come over to do a project, they bring an army of people to do it. They do not involve the local community or leave behind anything in the way of knowledge transfer or anything tangible. That is so different from the approach of British companies. For example, Unilever, which I know is a hybrid company, has taken on board the modern slavery agenda, and has largely eradicated these problems from not only the company itself but its supply chain. I have met some of the individual non-governmental organisations that have been involved with that.

My overall feeling is that we should treat the Chinese with caution, and examine the details of projects carefully to ensure that we can add value to the local community. Otherwise, there is no point doing them. There is no point helping to develop a country if we cannot involve people in the project itself.

--- Later in debate ---

[Sir Oliver Letwin (West Dorset) (Con)]

I had not actually intended to participate when I decided to come to this debate, but I find that I really want to. Although I accept that there are very considerable issues about the treatment of various groups in China, it seems that there is a much larger issue, to which my hon. Friend the Member for Aldershot (Leo Docherty) began to attend in moving the debate. It really is very important that we should begin to attend to it.

The fact is that the world is being remade before our eyes. Between them, China and India are very likely to be the dominant features of our globe in the latter half of the current century, and they might simply reassert a position that was the norm until the industrial revolution. We should remind ourselves that after the industrial revolution, we in Britain were among the leaders in a period of imperialism and colonialism, and of aggressive mercantilism, in which appalling scandals were visited on both India and China. We inherited power in India at a time when the country accounted for 23% of world GDP; when we left, it accounted for 3%. I declare an interest in this issue: I am leading a project on India and China at the Legatum Institute—incidentally, I am the vice-president of the Great Britain-China Centre. Actually, one need not be involved in these things at all to know what the history looks like.

On China, the opium wars, which have been mentioned, were correctly described by an independent observer of the scene—namely William Ewart Gladstone in this House—as probably the most awful scandal that had ever until that time occurred in the relations between one country and another. We fought a war in order to force very large numbers of people to accept the export to them of a dangerous drug. It is not surprising, therefore, that India and China have certain issues with the west, and Britain in particular.

Nor is the construction of the so-called international rules-based order, which has been referred to, anywhere near as unequivocal as people often imagine. It is, in point of fact, a construct of the western liberal victors of the second world war. The whole international rules-based system, which is being replicated in a completely different way in the institutions surrounding the Shanghai Co-operation Organisation, has embedded in it western liberal values to which I happen to subscribe, but which are not at all the values of the entire tradition of Indian thought and postcolonial Indian thought from Nehru onwards, nor of Chinese thought, ancient or modern.

The abuses and problems in China that have been referred to are reminiscent of things that went on in our country for many centuries. It is helpful in many respects to think of Xi Jinping’s regime as a kind of Tudor monarchy. The Tudors in this country, operating in part from this building, engaged in torture and religious persecution, and did all sorts of things of which we now do not approve. They also presided over the most vibrant cultural and economic renaissance that this country has ever seen, which gave great benefits to the world. They also initiated what became an industrial revolution—the greatest explosion of human progress and development, in economic terms, that had ever happened until the Chinese outdid it.

As my hon. Friend pointed out, in the past few years China has brought out of poverty the greatest number of people that has ever been brought out of poverty anywhere in the history of the world. It may in due course be overtaken by India, but unless and until that happens, it has a striking world record in improving the quality of life of its people. The fact that it is doing so in a way that does not wholly meet with the approval of western liberals is, first, no surprise, and secondly, something that, although I agree it should not be ignored, should not lead us to think that the major issue is what we think about China.

The major issue is a quite different one. My hon. Friend quoted Kevin Rudd, who happens to be one of the most sober-minded and sensible of the commentators, but in certain circles in Washington a powerful narrative is developing—this is why I asked him whether he really thought the Department for International Trade should be advising him to invent his own foreign policy vis-à-vis China—that foresees, almost as if it welcomes it, the prospect of an encounter, which actually means a world war, between the United States and China as China rises. Some of the more pessimistic texts have analysed cases in which one power has risen and succeeded the hegemony of another, and have found that rather few of such encounters have been peaceful. When Germany rose and sought to supplant Britain in the early part of the 20th century as the world’s leading economic and colonial power, the first world war eventuated. There are many other cases of such shifts occurring, not because of ideological difference, but simply because one power overtakes another. That thesis is now prevalent in some parts of Washington. Alongside climate change, I think it probably constitutes the biggest single danger to our children and grandchildren.

What therefore seems overwhelmingly more important than our criticisms of China’s internal arrangements, which we have a right, albeit a limited one, to criticise, is that we work with our allies to ensure we fashion a world for our children and grandchildren that does not disappear in a wholly unnecessary nuclear conflagration. That is a much bigger issue for humanity. Unless we start taking China and India seriously—not just in this country but in the west as a whole—unless and until the west as a whole recognises that it cannot expect to maintain hegemony in a world in which, on a very wide reckoning, there are 1 billion westerners and 2.6 billion Indians and Chinese, and unless we reconcile ourselves to a peaceful coexistence based on a radical reassessment of the whole post-war structure, which was designed around the principles of western hegemony, we are heading for a very great catastrophe. That above all is the issue that we need to debate.

[Sir Edward Leigh (in the Chair)]

I call Julia Lopez—no more than five minutes, please.

--- Later in debate ---

[Helen Goodman (Bishop Auckland) (Lab)]

It is nice to see you in the Chair, Sir Edward. I congratulate the hon. Member for Aldershot (Leo Docherty) on securing this timely and important debate—he has given us an extremely useful opportunity.

The hon. Member for Aldershot spoke about the re-emergence of China after the century of humiliation, to which the right hon. Member for West Dorset (Sir Oliver Letwin) also referred. I do not quite accept that narrative. Of course, relatively speaking, China was very big in the 15th and 16th centuries, in terms of its economy, population and technological advancement, but its level of international engagement is completely different today.

I commend to hon. Members a book called “Vermeer’s Hat”. It sounds as if it is about Holland, but it is really about the relationship between Europe and China in the period before the century of humiliation. At that time, China was extremely closed; things went out via the silk route, but not much went in. That is different from the current situation.

The most revealing moment in the debate was when the right hon. Member for West Dorset asked the hon. Member for Henley (John Howell) whether he found it strange that, when he was appointed as a trade envoy, the Government’s advice was to have his own personal policy on China. That is an astounding revelation, which really says it all. I might as well sit down now—but I will not. We want to know from the Government what their policy is, because it is has been swinging around wildly.

[Sir Oliver Letwin]

Does the hon. Lady recognise that the problem is not only this Government at this moment but the west over the past 30 years? Successive UK Governments and Governments around the world have simply not treated this issue with anything like the seriousness it deserves, as a result of which we see what we see in Washington.

[Helen Goodman]

The swings and turns have been peculiarly rapid. Under George Osborne, we were pressed strongly to engage economically with the Chinese; under the recently sacked Defence Secretary, the right hon. Member for South Staffordshire (Gavin Williamson), we were to have naval ships going into the South China sea. One does not normally expect to see such twists and turns in a mature European democracy.

The Foreign Affairs Committee report is excellent. It stated:

“China is seeking a role in the world commensurate with its growing economic power, and…This makes China a viable partner for the UK on some issues, but an active challenger on others.

The current framework of UK policy towards China reflects an unwillingness to face this reality. The UK’s approach risks prioritising economic considerations over other interests, values and national security...there does not appear to be a clear sense either across Government or within the Foreign and Commonwealth Office of what the overarching theme of a new policy towards China should be”.

The Committee also calls on the Government to publish a new strategy—that is a fair call.