The ‘golden era’ is over, but there is still room to have a relationship with China
Reacting to Rishi Sunak's balancing act
Hello and welcome back to What China Wants.
On Monday night, the UK’s Prime Minister, Rishi Sunak, set out a new vision of Britain’s relationship with China.
The headlines were clear enough: David Cameron and George Osborne’s ‘golden era’ is now over, and the relationship between the two countries must ‘evolve’. The People’s Republic represents ‘a systemic challenge to our values and interests’, and wishful thinking will have to give way to ‘robust pragmatism’. This was clearly not a speech that would have been welcomed in Beijing.
CapX have just published my article on what to make of Mr Sunak’s speech. Here are the headlines:
The UK cannot simply turn its back on the world’s second largest economy, even if it is now classified as a strategic competitor.
Rishi Sunak understands we can't throw the baby out with the bathwater because there are many ways we need to work together with China, especially climate change.
China does pose a threat to UK interests in that it wants to remake the world in its own image, which will decrease Western influence. It is thus important to make sure we are not exposed to China in ways that could be used by Beijing to damage us if relations further dip.
However, 'De-Chinafying' Western economies will be a long, arduous process and needs proper government support.
Read the full article here:
Stewart and I will be back tomorrow for our new podcast, talking to noted macro investor Meyrick Chapman about how US monetary policy may inadvertently be boosting Chinese influence worldwide.
"China does pose a threat to UK interests in that it wants to remake the world in its own image, which will decrease Western influence".
If we concede that UK interests are the interests of international capital, you are 100% correct. China seeks, above all, to subjugate the rights of capital to human rights, and Britain will have no part of such nonsense.
Instead, Britain pretends that it – presumably in league with its Five Eyes brethren – can influence China's behavior by, um, badmouthing China and reducing contact.
Rishi, like his fellow Western leaders, clearly has no idea that China's leadership of the world is already a settled matter: mortally it stands head and shoulders above its tormentors, as it does diplomatically, scientifically, culturally and economically.