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George Osborne’s epic kowtow to China

The Dalai Lama is right: the UK's China policy is about 'money money money" - where the sale comes first

26 September 2015

8:00 AM

26 September 2015

8:00 AM

Any British Prime Minister who meets the Dalai Lama knows it will upset the Chinese government — but for decades, no British Prime Minister has much cared. John Major met him in 10 Downing Street, as did Tony Blair. These were small but important nods to Britain’s longstanding status as a friend of Tibet. Of course the Chinese Communist Party disliked seeing the exiled Buddhist leader welcomed in London — but that was their problem.

How things have changed. Now China is far richer and Britain is anxious, sometimes embarrassingly so, to have a slice of that new wealth. From the start of his premiership, David Cameron has been explicit about this. ‘I want to refresh British foreign policy to make it much more focused on the commercial,’ he said. ‘I want to be much more focused on winning orders for British business overseas.’ Diplomats received new orders: promote the interest of businesses, help the recovery. Britain had a new message for the rest of the world: we want your money.

During his five-day trip to China this week, George Osborne went further. At times he seemed to be auditioning for the role of the Chinese Communist Party’s new best friend. ‘Let’s stick together to make Britain China’s best partner in the West,’ he declared at the Shanghai stock exchange — the scene of much mayhem in recent months.He went so far as to claim that Britain and China were ‘two countries whose cultures have done more to shape the world than almost anyone else’ – a novel theory, if nothing else.

‘No economy in the world is as open to Chinese investment as the UK,’ he declared. All told, the Chancellor looked as if he was attempting the world record for the longest kowtow in diplomatic history. The Chinese will seldom have seen anything like it. Its state media later praised him for his “pragmatic” decision “not to stress human rights” during his visit. He is their kind of capitalist: one whose chief interest is in cold hard cash.

Even now, the Chancellor is seeking to atone for what he believes was one of Cameron’s worst diplomatic mistakes: meeting the Dalai Lama three years ago. It had been a low-key event, not in No. 10 but in St Paul’s Cathedral — a venue chosen to minimise Chinese anger by framing this as a meeting with a religious man, the leader of Tibetan Buddhism. Osborne was against the meeting but the Foreign Office (which had arranged a similar one for Gordon Brown) assured him that Beijing would get over it in a few months. And anyway, since when could an authoritarian communist regime dictate who the British Prime Minister sees?


But things had changed. Beijing sensed that it had more leverage over a prime minister with such a visible appetite for doing Chinese deals. So it cancelled a planned official trip to Britain and instructed Cameron to ‘stop conniving at and supporting separatist attempts to achieve Tibetan independence.’ The Prime Minister, to his horror, was then saluted by campaigners for standing up to China — he had intended no such thing. He wasn’t angry with China so much as furious with his officials for having misjudged its mood. Soon afterwards, Xi Jinping became the Chinese president and the position on the Dalai Lama hardened further. Even pop stars who had been nice about him, such as Bon Jovi and Bjork, have found themselves banned from China.

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Jon Bon Jovi showing a picture of the Dalai Lama in his concerts. He is now banned from visiting China

A year later, Cameron was still in Beijing’s sin bin. ‘This is ridiculous,’ he told officials. ‘I have made overseas trade a cornerstone of my premiership and I’m not being allowed to go to China. I’ve got to go to China!’ He berated them about the ‘heavy price’ he was being made to pay for ‘doing what I was told would not become a major incident’. The Foreign Office had not just misjudged Beijing, it had misjudged No. 10. The Prime Minister was quite serious about his mercantilist foreign policy, and his Chancellor was hellbent on setting up Chinese deals for British companies. Relations with the Dalai Lama were, to put it mildly, a lower priority.

We know all this because of the extraordinary accounts given by No. 10 aides in Cameron at 10, a new book by Anthony Seldon and Peter Snowdon. The Prime Minister offered them unprecedented access to his staff in hope of producing a book that would eclipse Lord Ashcroft’s. While Cameron at 10 is broadly sympathetic, it reveals the extent to which both Cameron and especially Osborne were devastated about upsetting Beijing, and set out to do whatever it took to make amends.

A deal was eventually struck whereby the Prime Minister would declare, in public, that he had ‘no plans’ to see the Dalai Lama again. Diplomatic relations thawed eventually — but as we’ve seen this week, the apologies to Beijing have never stopped. Osborne has offered China a splurge of British government money (much of it, of course, borrowed from China). He’s promising a £500,000 grant for Chinese arts organisations, £300,000 for the digital archiving and translation of Qing dynasty poetry and £700,000 to encourage the Chinese to visit the north of England.

But perhaps the Chancellor’s most valuable gift was his decision to let his hosts design, build and operate a nuclear power station in Britain. This is quite a coup for China, which is not renowned for its expertise in this area and has hitherto only been able to export to the likes of Romania and Pakistan. Now, thanks to the Chancellor’s generosity, Beijing will be able to boast that its civil nukes are good enough for Britain. Just why he should be so keen on Chinese nuclear power when vast quantities of shale gas have been found in Britain is an open question — one that few in the Treasury will have the courage to ask.

All of this baffles the American government. Why, they wonder, would Britain let the Chinese anywhere near their nuclear power stations? Both the CIA and GCHQ spend much of their time guarding against state-sponsored computer hacking. A cyber-attack on a nuclear power station would be an unthinkable disaster. China is one of the few nations to engage in industrial-scale hacking, which is why our spies rightly and rationally ‘war-game’ against a Beijing-inspired attack.

So why does the Chancellor then invite state-owned Chinese companies to build nuclear power stations here? Worryingly little is said about the security concerns. Osborne seems to brush all questions aside in pursuit of Chinese money for his own great leap forward: projects such as high speed rail, his ‘northern powerhouse’ and that new nuclear power station at Hinkley Point.

The Obama administration has already complained about Britain’s compliant attitude to China. It asks, for example, why Osborne has been so keen to help the Chinese build a rival to the World Bank. The Chancellor has signed up Britain as a founder member of the Asia Infrastructure Investment Bank, which the US fears could become an instrument of Chinese foreign policy. ‘We are wary about a trend toward constant accommodation of China,’ an Obama administration official told the Financial Times. ‘This is not the best way to engage a rising power.’ That official makes a crucial point: will this pandering make China more likely to respect Cameron and his government?

There have been precious few signs that the Chinese regard Britain as a good friend, let alone its best in the West. When MPs tried to visit Hong Kong last November, they were told that they’d be turned back at the airport: an outrageous snub that ought to have resulted in the Chinese ambassador being summoned for rebuke. Hugo Swire, the Foreign Office minister, refused to do this — not that it helped him much. When he visited Hong Kong in January, he was refused meetings with the former colony’s top two officials. Beijing is discovering that it can treat Cameron’s government however it pleases.

President Xi has been in Washington this week — a visit studded with awkward conversations about civil liberties and computer hacking. The Americans, it seems, still feel able to highlight national areas of concern. When Xi arrives on his state visit to Britain, he can expect the sort of non-stop flattery he receives at home. All he will have to do is write some cheques, bail out whichever of Osborne’s pet projects are in most trouble — and then marvel at just how cheaply the British can be bought.


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