Why Did Britain's Chancellor Visit Xinjiang?

 
 

In the last few years, Britain’s approach to China has been badly in need of a dash of imagination. On the whole, China policy in the U.K. has appeared to be run by people for whom grinding bureaucratic calculations take priority over any long term strategic vision. The oddity of this situation is that British politicians evidently don’t buy much into what their officials tell them. For example, in the 1990s, the last governor of Hong Kong, Chris Patten, was famously suspicious of what foreign office mandarins were telling him. The fact that we now know they were busy betraying him behind his back to Beijing shows his instincts were right.

Prime Minister David Cameron’s adventures with China show the same pattern. He lectured then-Premier Wen Jiabao on a visit to London about human rights, and then went full out by meeting the Dalai Lama in mid-2012. Cameron may have calculated that with the 2012 Olympics on the horizon in London, the Chinese would still need to send high level representatives to the U.K. This gamble proved wrong and Britain was placed in a diplomatic deep freeze for almost 18 months. Officials probably counseled Cameron against both outbreaks of boldness, but he marched on ahead, regardless. Fundamentally, the most striking issue of U.K. policy on China is the extent to which politicians clearly don’t trust what their key China specialists tell them. That’s the only conclusion one can make from watching their actions.

When Britain’s chancellor (in effect, its finance minister) George Osborne visited China in August, he only reinforced this impression. Osborne rammed home his key message that trade and economics are the core lifeblood of the relationship by standing in the Shanghai Stock Exchange to broadcast support for the market after its recent travails. But it was his imperial style descent, albeit for a few hours, on Xinjiang, the restive region in China’s northwest, that most raised eyebrows.

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It is now clear that the British Treasury rather than the Foreign Office runs China policy. Under its new bureaucratic masters, the U.K.’s China policy has become steely, self interested, and, to some degree, very consistent. Britain joined the China-led Asia Infrastructure Investment Bank earlier this year, despite irritating their key ally the United States in doing so. Osborne’s sojourn to Xinjiang was also high risk. No other British minister has ever visited, and very few foreign emissaries have made the trip. Taking a trade delegation to such an area basically conveys one point: no matter how intense the concerns about human rights and security, trade has to go ahead when it comes to China.

Amoral foreign policy has been a unique specialty of the U.K. for centuries. But there is a more forensic point that needs to be made here. Attacking Osborne’s Xinjiang visit for moral reasons only gets lost in ideological and values battles. The greatest issue with this visit is that even on its own hard-nosed, pragmatic terms, it is hard to make sense of it.

If Osborne is sending the message that British companies should look to make good returns in an area like Xinjiang, then he needs to answer a few follow up questions. Is there a network of deeply grounded expertise in the U.K. on the business and investment environment in Xinjiang? Are there people who can advise prospective companies looking to do business there about the very particular political, economic, and social challenges of controlling risks to their investment in this region? Is he proposing that British companies partner with Chinese energy companies in exploiting Xinjiang’s energy resources, and if he is, what precise terms will be at the heart of this cooperation? Chinese energy companies don’t need capital. Is it technology they are after, and if so, can British technology companies in this sector broadly trust the intellectual property regime in China? Did Osborne’s visit deliver some credible general protections here that will then help British companies in their specific business opportunities in Xinjiang?

The British government is at the moment very consistent on China policy. That is no bad thing. And the politicians at least are showing some imagination. That is welcome too. But there are still issues. Osborne could have visited many other places to signal the opportunities for, for instance, service sector developments in China – Xi’an, for instance, with its educational and tourist sectors, or even Hohhot in Inner Mongolia, with resource and environmental demands the U.K. might play into. Going to Xinjiang was provocative, but also irresponsible.

Why should British companies expose themselves to the real risks of lack of British knowledge of the business environment there, the lack of investment predictability and protection, and any number of other variables? Will Osborne compensate them for the strong likelihood of commercial losses and litigation? Osborne’s officials need to give him more appealing, better advice, for sure – but he also needs to listen to it. At the moment, the evidence is that neither is happening.

As it is, there is the sneaking suspicion that Osborne went to Xinjiang not for commercial reasons, but to pander for political favor in Beijing. And that leads us to the depressing conclusion that it is not just British business and expertise that is for sale in China – so is British government policy.

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