For some years now, Western concerns about the international expansion of Chinese companies have been growing. The underlying assumption is that although Western countries may benefit economically from Chinese business investment, it also poses a threat to their security. This curious paradox seems only to apply to Chinese businesses. American, European, Indian and Japanese business investments are invariably welcomed as positive moves, providing employment and generating wealth for the host nation. However, the same benefits provided by Chinese business investments invariably come with reservations that sometimes border on paranoia.
The furor over Huawei was probably the most extreme example of this paradox. Despite the clear financial and technological benefits of welcoming the Chinese tech giant into Western markets, Huawei has been banned in the United States, Canada, the United Kingdom, Australia, New Zealand, and some parts of continental Europe, with national-security risks given as the reason. The well-publicized fears that Huawei would use its technology to spy on Western customers also led to a wider media frenzy, with wild claims about spying through Chinese electric cars, televisions, cameras, drones and even street lights becoming the subject of often ludicrous anti-China headlines.
What is remarkable is that, despite this constant barrage of Western media negativity about China, Chinese businesses have continued to expand their operations in Western countries. In the UK, for example, according to The Times newspaper, approximately 200 British companies are either controlled by Chinese investors or have them as minority shareholders, with investments valued at 134 billion pounds ($168.06 billion). These include such major names as British Steel, the Hinkley Point C nuclear power station, Heathrow Airport, Logicor, Thames Water, Northumbrian Water, UK Power Networks, Greene King, Three UK, Superdrug Stores, Neptune Energy, C&J Clark, and Cineworld Group.
The massive Chinese investment in British companies would be heralded as a major plus for the UK economy if it came from virtually any other country. However, the China paradox means that the clear benefits for Britain are persistently portrayed as negatives. This was exemplified in a recent article in the Daily Express newspaper, which argued that when Chinese businesses in the UK pay dividends to their investors, tens of millions of pounds flow to China. It went on to quote a recent report by Parliament’s Intelligence and Security Committee, which stated that China’s ambition to become an economic superpower presented the “greatest risk” to the UK. The committee report asserted that China was “targeting” Britain and its interests “prolifically and aggressively” in the process of seeking to control key industrial and civil nuclear energy assets. The Daily Express article also quoted the committee’s news release, which stated: “China’s size, ambition and capability have enabled it to successfully penetrate every sector of the UK’s economy. … The UK is now playing catch-up and the whole of Government has its work cut out to understand and counter the threat from China.”
Cameron now has a golden opportunity to be remembered not as the instigator of the disastrous Brexit, but as the man who revived Anglo-Chinese relations and put an end to the UK’s curious China paradox
This obsession with portraying Chinese investments as a threat contrasts sharply with the UK’s attitude toward other countries investing in Britain. The US is by far the UK’s biggest foreign investor. Its current investment is valued at approximately 1 trillion dollars, dwarfing the size of China’s contribution to the British economy. Other major investors include India, Japan, Germany, the Netherlands, Brazil and Saudi Arabia. All of these investors are welcomed with open arms without any of the paranoia reserved for China.
There is, however, a glimmer of hope that the China paradox will soon be resolved. Recent political events in Britain could possibly mean that a more-rational approach toward Chinese investment will once again prevail. With the surprise appointment on Nov 13 of former prime minister David Cameron as the new foreign secretary, the stage could possibly be set for a change of direction and a dialing-down of the anti-China rhetoric.
As prime minister from 2010 to 2016, Cameron proclaimed a golden era of Anglo-Chinese relations and strongly promoted economic ties between the two countries. It was only in the post-Cameron, post-Brexit era that all this fell apart. The lurch to the right in the governing Conservative Party under Boris Johnson and then Liz Truss saw a dramatic shift in government personnel, policy and levels of competence. The need to counter government inadequacies, a weakening economy and declining public services led to a more-populist approach and the invention of external enemies to distract from government failings. The demonization of China was a part of this, with politicians such as Sir Iain Duncan Smith given free rein to push their anti-China rhetoric. Following the 2019-20 protests and riots in Hong Kong, this intensified, with the restoration of calm through the National Security Law for Hong Kong being portrayed in Britain as a “sinister” move by Beijing to undermine human rights and the rule of law. It was at this point that the China paradox became most evident, with the previously acclaimed Chinese economic investments in Britain being condemned as a serious security threat.
After Rishi Sunak replaced Truss as prime minister in 2022, a more rational and balanced approach was introduced, although to keep his right wing on board, Sunak felt unable to completely abandon the anti-China stance of his predecessor. Now, however, with the appointment of Cameron, there is genuine hope of a complete return to rationality and an end to the damaging and illogical China paradox. The recent successful meeting between US President Joe Biden and President Xi Jinping has heightened this possibility, adding to the sense of a sea change in the West’s relations with China.
Of course, any attempt by Cameron to resurrect the strong Anglo-Chinese relationship of his premiership will be attacked by elements in Parliament and the media. However, the time is undoubtedly right for such a change, and Cameron would do well to put himself on the winning side of history this time, in sharp contrast to his calling for a referendum on Brexit and the subsequent defeat of his Remain campaign. Politicians rarely get a second chance to redeem themselves in history. Cameron now has a golden opportunity to be remembered not as the instigator of the disastrous Brexit, but as the man who revived Anglo-Chinese relations and put an end to the UK’s curious China paradox.
The author is a British historian and former principal of Sha Tin College, Hong Kong.
The views do not necessarily reflect those of China Daily.
