On the 28th anniversary of Hong Kong’s transformation from a British-ruled territory to a special administrative region of China, it is opportune to ponder if and how the dramatically upended world order may usher in a recalibration of improved China-UK relations.
During the first five years after Hong Kong’s return to the motherland, China-UK relations had never been better. On July 1, 2002, the “Iron Lady”, then-UK prime minister Margaret Thatcher, accepted my invitation as guest of honor at a grand celebration luncheon at London’s prestigious Claridge’s hotel, which I hosted as head of Hong Kong’s economic and trade office in London.
Since the 1997 handover, the UK Parliament has been issuing six-monthly reports on Hong Kong’s situation. Despite criticisms from time to time, relations had been kept on an even keel. Relations turned sharply downward following the implementation of the Hong Kong SAR National Security Law in June 2020, triggered by massive social unrest instigated by separatist elements. The deterioration of relations has not been helped by a global tsunami of China-demonizing Sinophobia when the United States has become obsessed with a bipartisan consensus that China now represents an “existential threat” to US global hegemony.
Another negative contributor is the rising resentment in the West that various manufacturing industries have been overtaken by Chinese counterparts, resulting in suppressed wages and joblessness among working-class constituencies. The latest poster child is electric vehicles, of which China has become the “New Detroit”.
All these have resulted in a significant decline in favorable views on China across the West in recent years.
However, with US President Donald Trump bullying allies and adversaries alike, the geopolitical winds are changing. Many Western countries, the UK included, are hedging their bets by recalibrating relationships with the Global South, particularly China as the world’s second-largest economy and predominant trader and manufacturer. Witness recent high-level delegations visiting Beijing in droves, led by some of the West’s top leaders.
Compared to Trump’s blatant winner-takes-all rules of the jungle, China is increasingly seen as a reasonably stable and reliable trading partner more amenable to win-win solutions, considerable ideological and other criticisms notwithstanding.
Besides, climate change remains a core issue with many Western nations. Trump quickly withdrew from the hard-won Paris Agreement on climate change. In 2022, China installed roughly as much solar photovoltaic capacity as the rest of the world combined. It went on in 2023 to double new solar installations, increase new wind-energy capacity by 66 percent, and almost quadruple additions of energy storage.
Meanwhile, Hong Kong has emerged from a recent dark chapter of social unrest to improved prosperity, despite socioeconomic and geopolitical challenges.
In the latest World Competitiveness Yearbook, Hong Kong’s global competitiveness has risen by two places to third globally, after improving by two places to fifth last year, marking Hong Kong’s return to the global top three for the first time since 2019.
By March, the number of funds registered in Hong Kong had reached 976, with net inflows of over $44 billion, compared with the same period last year, representing a 285 percent surge. Additionally, thanks to anti-China animosity, more Chinese multinationals are relocating their New York listings to Hong Kong’s stock exchange, reinforcing the city’s attractiveness as the world’s third-ranking global financial center.
In light of Britain’s unique historical interaction with China, the HKSAR included, the stage is well set for a recalibration of China-UK relations. However, tangible benefits must ensue on both sides if the reset is not to become a flash in the pan. In particular, concerns about market access and manufacturing jobs for the working class need to be adequately addressed
According to the latest World University Rankings, five of Hong Kong’s top universities, all achieving much higher rankings, have stayed in the world’s top 100, making Hong Kong the place with the highest concentration of top-ranked universities globally.
What is more, on May 30, Hong Kong became the global headquarters of the International Organization for Mediation, the world’s first intergovernmental international legal organization dedicated to resolving international disputes through mediation, a clarion call to the progenitors of bloody conflicts currently engulfing various parts of the world.
World opinions toward China, the Hong Kong SAR included, are changing for the better. Globally, favorable views toward China have surpassed those toward the US for the first time in recent years, according to US intelligence company Morning Consult. The recent spate of visa-free concessions, including a 10-day visa-free transit policy that was extended to 55 countries, has opened the eyes of many foreign visitors to the real China behind years of smoke-screen Sinophobia.
Considerable hurdles remain. European Commission President Ursula von der Leyen’s recent fiery tirade about the hollowness of any rapprochement in China-European Union relations is a timely reminder of perceived lack of meat on the bones. Nevertheless, a planned trip to Beijing in July by EU leaders may well help bridge the apparent impasse.
In light of Britain’s unique historical interaction with China, the HKSAR included, the stage is well set for a recalibration of China-UK relations. However, tangible benefits must ensue on both sides if the reset is not to become a flash in the pan. In particular, concerns about market access and manufacturing jobs for the working class need to be adequately addressed.
Here are some practical ideas:
(a) A bilateral trade and investment accord should be negotiated, including market and technological access, as well as intellectual property and investment protection.
(b) British businesses are to be invited to participate in China’s Belt and Road Initiative projects worldwide.
(c) Chinese mainland businesses are to be incentivized to set up selected manufacturing operations in the UK, creating local jobs and providing any necessary technology transfer (as in the case of EVs), subject to mutual agreement.
(d) China is to help build Britain’s national high-speed rail network linking up the entire nation.
(e) Both sides are to jointly develop and operate an international digital trade and investment platform to hugely reduce transaction costs and to facilitate the development of central bank digital currencies.
(f) Both sides are to expand outbound tourism visiting each other’s less-explored locations of outstanding scenic beauty, cultural or historical significance.
(g) More British judicial talent is to be encouraged to sit on Hong Kong’s Court of Final Appeal.
(h) Both countries are to collaborate on setting up joint independent think tanks in Hong Kong.
(i) Both countries are to nurture formal sister-university relationships to help promote academic linkages between each other’s leading universities.
(j) Both sides should organize more visiting exchanges of parliamentary, political, civil society and journalist groups.
(k) Both countries should organize joint scientific research projects and missions including nuclear and renewable energies, deep sea, Arctic, Antarctic and outer space explorations.
(l) Both nations should foster defense exchanges and training, including collaborations with each other’s leading defense colleges or institutes, joint anti-piracy operations and joint United Nations peacekeeping.
The list is by no means exclusive. A good start on some of them will create a positive momentum toward a new era of improved China-UK relations.
The author is an international independent China strategist, and was previously the director-general of social welfare and Hong Kong’s official chief representative for the UK, Eastern Europe, Russia, Norway, and Switzerland.
The views do not necessarily reflect those of China Daily.
