Themes: the Chinese government’s views of the UK; how recent political events in both nations impact UK-China relations; how China’s view of the UK may develop in the coming years.
Concise commentary on complex issues from different points of view.
The UKNCC Guest Contributor Programme offers contrasting ‘short, sharp reads’ for those seeking a fuller exploration of key questions. This June 2021 edition explores the question:
“How does China really see the UK?”
Authors, alphabetically by surname:
- Sir Vince Cable, Leader of Liberal Democrats 2017-2019
- Lin Yue, Executive Director, Goldman Sachs Asset Management
Contact us at:
perspective.ukncc@pm.me
“How does China really see the UK?”
Author: Sir Vince Cable
Leader of the Liberal Democrats (2017-2019)
June 2021
The UK National Committee on China (UKNCC) Guest Contributor Programme highlights contrasting responses, by leading authors, to key questions posed by the UKNCC. The programme is designed to stimulate a deeper exploration of China related issues; drive curiosity; and test conventional wisdom.
Contact us at:
perspective.ukncc@pm.me
Q. How did the Chinese come across to you as viewing us when you were in government?
“If we can divide that into several parts it will be most useful. Firstly the Coalition government was aware of how relatively less well the UK had done in terms of engagement and trade with China, as compared to say Germany. We, as a government, were very determined to change that, and they would have seen us sending regular government delegations to China, and both George Osborne and I in particular worked on cultivating high level exchanges and regular dialogue with our Chinese counterparts.
One of the most concrete outcomes of this was the UKs early participation in the AIIB. Secondly they seemed to understand that investing in the UK was attractive in terms of our openness to external investment and relatively light touch regulatory environment. Thirdly there was an existing cultural affinity with the UK, from English language to football and large numbers of Chinese sending their children to British schools and universities.

Fourthly I, in particular, made it clear to them that we were interested in the longer term perspective Chinese companies might be able to bring to the table in terms of making investments in the UK. This was vital in my view for any Industrial Strategy that the UK wanted to build, as most UK companies are much shorter term in their investment horizons. I had long discussions for example with Geely to get them to invest here, as well as talking to Huawei and those investors in nuclear – so they saw a degree of mutual interest in coming to the UK.”
Q. What do you think the reversal of the Huawei decision has done to China’s view of the UK?
“Well, as the minister who was responsible for overseeing aspects of our relations with Huawei, I am genuinely confused as to what has happened, and I suspect that confusion is shared by the Chinese. We had a rigorous due diligence processes, involving the security services that concluded there was no risk from Huawei.
However even at the time there were elements within the Government, and from our NATO allies, that suggest the initial approach under Tony Blair had been handled carelessly, and there were reasons to be concerned.
Obviously these concerns have come to the fore and are now seen as crucial in deciding this. For the Chinese along with Brexit it will be seen as a surprising and disappointing decision to say the least. They will also be watching carefully whether other controversial Chinese investments such as in the nuclear sector are allowed to continue.”
Q. Let’s talk about Brexit. Obviously you were a prominent voice for Remain. How do the Chinese now view Britain outside the European Union?
“Simply put, we have lost our status as the ‘gateway’ to Europe for China, and, to a certain degree this has seen the Chinese focus more on the European Union such as the current trade agreement that has been negotiated. However it is not as simple as that. The Chinese have always recognised that the EU is not a nation state like the US, so has often focused on doing business with individual nations within the EU as much as they have dealt with matters on a China-EU basis. To that end they will not change their view of the UK as an attractive market in and of itself, but it may impact where they decide to site future projects that have a pan-European nature. In terms of the City of London, especially in the context of the 2015 RMB crisis, since when the Chinese have slowed down their plans for currency liberalisation, Brexit has made the City more attractive to the Chinese and less attractive.

It has become more attractive because City institutions will be hungry to win new customers to make up for the loss of European business, and will likely be more accommodating of what the Chinese need.
This builds on what happened during the coalition when George Osborne drove the need for businesses- and indeed we have seen some firsts with RMB denominated bonds and so on. The Chinese will presume the appetite of the City will be increased by Brexit.
Of course that doesn’t take into context what the City now loses in terms of access to European Markets, and how vital that access is to potential Chinese partners. Overall it is clear we lose something by being now seen as just another country, rather than part of the EU, but only time will tell how much that deters Chinese investment and trade with the UK.”
Q. Turning to Hong Kong, how much is Hong Kong a prism through which China views the UK?
“There is a sensitivity in China to anything relating to the ‘century of humiliation’ and certainly Britain’s part in that is part of that sensitivity.
Early on in the coalition I witnessed a diplomatic incident in Beijing involving the wearing of poppies that showed that, whilst the handover of Hong Kong had done much to resolve that issue, the memories were still there. However they are much more concerned with the present when it comes to Hong Kong.
Obviously the large amount of British business operating there, especially in financial services is both seen as an incentive to trade with the UK, and as a place that gives China access to the City. Politically they are very sensitive to the idea that Britain, or anyone else, is interfering in Hong Kong and the recent protests there.
There is some reason to support the idea that the protests are, in part, stoked by foreign interference, but I think they have been quite clumsy in opposing Britain’s offer of asylum to BNO passport holders.”
Q. How do you think the Chinese will see the UK in ten years’ time?
“It’s hard to say, but I think it’s very driven by how Britain’s post Brexit relationship with Europe unfolds.
I think if we go down an Atlanticist path of moving in closer step with the Americans, that will limit the attraction we have had for China as an independent voice in the Anglosphere.
The peak of them seeing us as that was when we joined the AIIB despite reservations from Washington.
Whilst the closer we are to Europe the more important we are to China, the success or otherwise of the Global Britain project will also dictate how much important we seem to the Chinese.”

Author: Lin Yue
Executive Director
Goldman Sachs Asset Management








