Neil O’Brien: I can laugh off China sanctioning me, but we can’t shrug off the threat it poses

5 Apr

Neil O’Brien is co-Chairman of the Conservative Party’s Policy Board, and is MP for Harborough.

Typical, isn’t it?  You’re trying to get the kids off to school and nursery, running late as you hunt around for your son’s snuggly giraffe. You have a busy day planned, meeting the local paper and a café owner threatened with eviction.

The next thing you know, a communist superpower declares war on you personally.

I’m one of nine people sanctioned by China. It’s tempting to laugh it off. After all, seizing my assets in China will leave the Communists no richer. And after they kidnapped two prominent Canadians, I wasn’t planning to go there anyway.

The next morning, the Chinese embassy still sent me their regular propaganda email to MPs, which began: “Dear friends…”  It seems joined-up government is impossible – even under dictatorship.

But it’s no laughing matter. The goal isn’t really to intimidate me or the other MPs, but business people, academics, and others. To create uncertainty, fear and self-censorship – memorably described as the “Anaconda in the chandelier” strategy.

More and more businesses are having to grapple with it: Beijing’s currently threatening to destroy Nike and H&M in China for raising concerns about slave labour.

It’s now coming up on a year since we launched the China Research Group.  Over the last 12 months, things have changed in lots of ways.

First, there’s growing global awareness of China’s human rights abuses: particularly against the Uighur people, but also in Inner Mongolia, Tibet, and across China as a whole. Human Rights Watch says it’s the worst period for human rights since Tiananmen.

The brutal crackdown in Hong Kong and Beijing’s decision to tear up the Sino-British declaration and end “one country, two systems” showed how much Beijing will sacrifice to keep absolute control. All leading pro-democracy activists there are now in exile, in jail or on trial.

At least the world has started to notice and act.  Indeed, we were targeted by Beijing in response to coordinated sanctions on human rights abusers in Xinjiang, recently put in place by 30 democratic countries.

MPs around Europe and MEPs from all the European Parliament’s main political groups were sanctioned along with us, with various US politicians already sanctioned last year.

So we’re all in it together, and it was great to get strong support from the Prime Minister – and through him the US President – and also from friends around Europe.

The sanctions aren’t like-for-like of course. MPs like me are being sanctioned simply for writing articles like this. By contrast, the democracies are sanctioning Xinjiang officials for presiding over a regime forcing sterilisation of Uighur women on an industrial scale; using rape as a weapon to break dissenters in its vast network of detention camps; rolling out an AI-powered surveillance state that to identify and control minority groups; and physically erasing the Uighur culture and religion from the face of the earth.

Our sanctions are to protest against human rights abuses. Theirs to silence such protests.

What Beijing’s doing is at least as bad as Apartheid South Africa.  But by comparison, the international response has been more muted so far. Partly because China makes it hard for reporters to get access. But also because China is more powerful than South Africa was.

International pressure on South Africa grew over decades and became a huge cultural movement. It loomed large in the pop music of my 80s childhood: “Free Nelson Mandela”, “Something Inside So Strong”, “Silver and Gold”, “Gimme hope Jo’anna” were all hits.

These days Hollywood studios make sure that their films have the thumbs up from Beijing: they think it’s too big a market to risk losing.

I’ve written about China’s growing global censorship. Nonetheless, the truth is seeping out, and the global criticism getting louder.

That points to a second positive change over the year: new opportunities for democracies to coordinate in the Biden era.

Coodination is essential: China’s economic and political strategy relies on divide and rule.  Each free country fears losing out if it alone stands up to Beijing.

The communist regime singles out countries who challenge it like Australia, Sweden and Canada. Like all bullies, they are really trying to teach others to keep their heads down.

But while Trump had scratchy relations with other leaders, Biden’s election makes cooperation much easier.

It’s not just that we need to get the band back together again, and make the G7 work (though that’s important), but bringing together a wider group of democracies including India, South Korea, Australia and South Africa. The Prime Minister is right to push the “D11” concept.

The third big change is changing western attitudes on economic policy regarding China.

The single best thing about the recent Integrated Review was the clear-eyed understanding of the competition for technological advantage now underway between nations.

In the sunny utopianism of the 1990s, the world was going to be flat, borderless, and competition was between companies not countries. Technology was cool, but not a national issue: the UK could just specialise in professional services. Awesome new global supply chains meant you didn’t need to worry about where your supplies were coming from, whether it was vaccines; ventilators, PPE, silicon chips or telecoms equipment.

Beijing has a very different vision, and its rise means we must change our thinking  It promotes “Civil-military fusion”, and its imports have slowed dramatically as its import substitution policies develop.

Xi Jinping says he is “building a socialism that is superior to capitalism, and laying the foundation for a future where we will win the initiative and have the dominant position.” He explains that China must “enhance our superiority across the entire production chain… and we must tighten international production chains’ dependence on China.”

The US has woken up to this, and in Washington as well as Beijing there’s a shared understanding that the two superpowers are fighting to dominate the technologies of the future. Joe Biden talks about “winning the future”.

Japan, South Korea and Taiwan have long seen tech competition as a shared national endeavour, and have policies to match.  No wonder: meeting politicians from these countries through the China Research Group, I’ve come to understand the level of constant threat they have to live under.

We too must adapt to this more national world.

First, we need to build a powerful innovation system. During the 1960s and 1970s the US and UK invested similar amounts in R&D.  But Reagan grew federal support while we let it wither, and we have been operating on different levels since.  I’ve banged on before about how to make government funding do more for our economy.

Second, we need to protect ourselves from the Beijing’s hoovering up of technology.  More help for business to resist cyberattack from the National Cyber Force.  Somewhere to get advice on not losing your intellectual property if you do business in China.

And as well as the very welcome National Security and Investment Bill we need to make sure that the new Investment Security Unit has the same resourcing and input from the security services that CFIUS enjoys in the US – and we need to be prepared to use the new powers.

Likewise, Jo Johnson’s recent report highlights the risks to our universities from poorly-thought-through partnerships with China. Investigations by Civitas and the Daily Telegraph revealed that UK universities are actually helping Beijing with new weapons technologies. We must get a firm grip of all such partnerships and where universities’ money is coming from.

Over the last year we’ve learned a lot.  The UK and governments across the west have started to act.  But we’re still just starting to figure out how to respond to a more aggressive China.

Neil O’Brien: Five lessons from the pandemic

25 Jan

Neil O’Brien is co-Chairman of the Conservative Party’s Policy Board, and is MP for Harborough.

Planning for disaster

Years ago I was rummaging around in the basement of the Treasury and came across an old copy of the “War Book”: a big red tome setting out what to do in the event of nuclear attack.

Time had made some details rather quaint: if the Soviets were about to drop a trillion megatonnes of instant sunshine on Britain, I’m not sure “nationalise Girobank” would be the first thing on my to-do list.

But it was a huge, thorough plan. Each department had something similar.

Since the end of the cold war, thinking about civil contingencies has been lower priority. But our more connected world creates potential for new, faster crises.

Not just pandemics, but the financial contagion we saw in 2008. Our reliance on the internet, cloud, electric grid and GPS is increasing. More specialisation, plus more global chains of just-in-time production increase efficiency, but also fragility. You don’t have to be Martin Rees to think there’s new risks that we must plan against.

State capacity

It’s striking that the countries that did best in the Covid pandemic are those, like Taiwan and South Korea, which live under threat of annihilation by their neighbours. They’re dense, urban countries, but per head they had just three per cent and 0.1 per cent of the rate of cases seen in the EU.

Though we’re fastest in Europe, the world’s fastest vaccine rollout is in Israel – a country also under constant threat.

Other top performers include New Zealand and Australia.  They aren’t under such military threat, but have long been used to tough bio-borders. Australia went from one idiot releasing a couple of rabbits for fun, to having 600 million bunnies and having to build the world’s longest fence.  That was a pretty good early lesson about the exponential growth of a new organism introduced where there’s no predatorial ‘immune system’ to keep it in check.

New Zealand and Oz also imposed tough lockdowns in response to relatively few cases. At the time sceptics here said it was “absurd” and “out of proportion”. But our cousins were right, so they’ve been able to get back to normal faster. They basically followed the advice of Ripley in the movie Aliens: ‘nuke it from orbit – it’s the only way to be sure’.

Right across South East Asia and Australiasia, successful states have made their borders very tough. As vaccinations power ahead in the UK, we’re quite right to further toughen our borders against potential new vaccine-resistant variants. The cost of a vaccine dodging variant coming here would just be too high.

But there’s something more to learn from states that live under threat, about the need for state capacity.  Another top Covid performer is Singapore, where civil servants are very highly paid – but small in number, and low performers are managed out fast.  One reason the state shouldn’t be too big is exactly so that it can be strong and focussed.

China as number one

As people have pointed out, coronavirus has accelerated lots of trends: we’ve woken up in 2030. Paying for things is contactless. Videocalling friends is normal. More stuff is bought online. And China is closer to being number one.

Though some democracies managed the same feat, China’s brutal suppression of Covid-19 has been successful, meaning faster reopening, meaning the point where it becomes unambiguously the world’s largest economy is now only a few years away.

The last twelve months have seen Beijing start to throw its weight around more.

The west needs to get its act together urgently. There’s an internal economic challenge, to match their all-conquering innovation-industrial system. And a diplomatic challenge too, to reunite the democracies. At a China Research Group event last week with people close to the new Biden administration, it was clear that there’s an important role for the UK in making that happen.

Making a living

First it was the global scramble for masks and PPE.  Then ventillators.  Then diagnostics and testing kit. Now the global surge of demand for vaccine production and glass vials.

Again and again, the pandemic demonstrated why we need advanced manufacturing capacity: in a crisis, nations are utterly dependent without it.

To be sure, there were always other good reasons to back manufacturing.  Along with professional services, it’s the other part of the UK economy that really drives productivity growth: since 1997, manufacturing provided 40–50 per cent of productivity growth in places like Wales, the West Midlands and the North West.

But the pandemic underlines another reason to want such capacities here. When the international going gets tough, countries must be able to provide for themselves (topped up with firm agreements with allies for complex products).

This lesson is not lost on President Xi, who in a speech in April set out his “dual circulation” plan:

“we must build on our advantages, solidify and increase the leading international positions of strong industries, and forge some “assassin’s mace” technologies. We must sustain and enhance our superiority across the entire production chain… and we must tighten international production chains’ dependence on China.”

In case you were in any doubt, Xi also talked about “forming powerful countermeasures and deterrent capabilities based on artificially cutting off supply to foreigners”.

Since Margaret Thatcher left office, Britain has deindustrialised more than any other G20 country.

Perhaps it’s another area where we should learn from Asia: South Korea has nine times more robots per manufacturing worker than the UK, yet since the Lawson era the UK has slashed capital allowances which support such investment.

As a recent report for the Levelling Up Taskforce found, such allowances also tend to help poorer areas more.

Staying nimble

The Government was panned at the time for not joining the EU’s joint procurement of the vaccine.  But the team who secured more vaccine orders for the UK than any other large country showed the benefits of being small and agile.

We need to apply the same agility and flexibility to our exit from the pandemic.

I totally understand why people want to set hard dates to reopen. We are all desperate to get back to normality.

But there are so many unknowns: how fast cases will fall; what effect school reopening will have; how much protection people get from their first and second vaccinations; how much that stops the spread, not just symptoms; whether new vaccine-resisting strains come here; and how fast we can go on vaccinations…

Given all this we need to stay nimble in the final phase of this. On Friday we delivered 425,000 vaccination doses in England alone. Huge numbers of people are being protected each day.

We will soon jab our way to victory, and end this pandemic.

Afterwards, there’s all kinds of lessons we must learn from it.

Garvan Walshe: Democracies need to pull together to stop Chinese subversion of the open global economy

3 Dec

Garvan Walshe is a former National and International Security Policy Adviser to the Conservative Party. He runs TRD Policy.

Chinese aggression hit the headlines after Beijing imposed punitive tariffs on Australian wine. But resisting Beijing’s exploitation of the international economy to build up its own power needs democracies to do far more than buy the odd bottle (or case) of Cab-Sauv.

On Tuesday, the China Research Group, led by Tom Tugendhat and Neil O’Brien, released a hard hitting report, Defending Democracy in a New World, describing a toolkit of things democracies can do to limit China’s abuse of the international system (I was involved in drafting the report).

Quite rightly, the report emphasises the importance of engaging with China, and welcomes Chinese economic progress, which, since Deng Xiaoping began to open the Chinese economy in 1979, has brought huge gains in the standard of living of billions of Chinese people, and indirectly, to the rest of the world.

Yet that international economic system is based on fundamental principles that China has been systematically violating. Human rights abuses have intensified since Xi Jinping consolidated power, from the concentration camps into which Uighurs have been crammed, to the destruction of civil liberties and democratic rights in Hong Kong, and the totalitarian oppression to which all Chinese citizens are subjected. China is bullying its neighbours, even to the point of preventing Taiwan helping fight the Covid–19 pandemic through the World Health Organisation, and has been rearming to back that intimidation with force.

Defending Democracy’s most important contribution however, is that it identifies the core source of Chinese Communist Party power and presents a set of practical measures democracies can take to blunt this expansionism. Today’s China is capable of reaching into the open economies of the West and pressing the undoubted economic achievements of Chinese industry and technology into the service of the Chinese state.

When globalisation brought barriers between states down, it did so on the implicit assumption that in market economies, the purpose of business was to make money – not serve the home states of the companies’ owners.

This created a world where it’s possible for all of us who can afford it, no matter where we are from, to own parts of foreign companies by buying shares in them, and have that ownership protected by the foreign country’s legal system. Instead of competing politically-like nineteenth century powers, we invest in each others’ economies and reap the benefits of companies competing with each other across a massive international market.

This ideal, however, is based on governments’ understanding that their job isn’t to promote “our own” companies at the expense of “theirs”, but to create an economic environment where a market economy could meet people’s needs and create jobs. Notwithstanding occasional outbursts of protectionism like France’s declaring dairy producer Danone a “strategic” industry, or outright state capture in some of the smaller ex-Communist European states, this ideal has mostly been upheld in the advanced economies of the world.

Xi Jinping’s China has seen that it is possible to apply the subversion of open Western economies, pioneered by the KGB, at industrial scale. When Western countries began to open up to each other after World War II, we did so on the condition that foreign trade and investment would not be used as a crude tool of political influence.

Perhaps seduced by the size of the Chinese market, and deceiving ourselves into thinking that as the Chinese grew richer, their political system would automatically grow democratic, we neglected to apply the same condition to Beijing. China is now going further, and using its power not only to enrich itself at the expense of a naive international economic and political system, but to start shaping the system’s rules in its own favour, and against liberal democracy.

This report is the start of a line of thinking that democracies, including of course the incoming Biden administration, need to join forces to impose costs on China for as long as its abuse of the international system continues. It contains some powerful measures that we can take to limit proposes some powerful measures that can be used to limit the extent of Beijing’s exploitation of our openness to further entrench its totalitarian rule.

As well as innovative specific measures to support the people of Hong Kong, and British National Overseas passport holders, to which the UK has a special responsibility, the report develops policies that can be applied by other democracies.

These include the systematic extension of Magnitsky Act-style sanctions to individuals responsible for human rights violations in China, including those in leadership positions.

Another key proposal is a “know your supplier” obligation to hold companies responsible for goods they sell that have been produced in supply chains where slave labour has been used.  Companies that fail to adequately investigate their own supply chains could be fined, and their directors be subject to personal liability and asset forfeiture if it is found that their wealth resulted from forced labour.

Chinese state-owned enterprises could be excluded from national-security sensitive infrastructure projects. Indeed, given the control the Chinese government exerts over even non-state owned enterprises such as Huawei, through its own national security legislation, the report could perhaps have gone further here, though considerable work is needed to make such restrictions compatible with WTO rules.

China’s participation in the open global economy has been good for China, and good for the rest of us,  but it has become clear that China is actively undermining the separation of politics and business upon which economic openness depends. Until Beijing changes its behaviour, democracies need to work together to ensure that China can no longer use its economic power to to bend the international system out of shape.

Hugo de Burgh: We owe it to future generations of Brits to work with China

6 Jul

Professor Hugo de Burgh is Director of the China Media Centre. He is the author of China’s Media in the Emerging World Order, has held office in three Conservative associations, and stood in unwinnable seats several times.

China is our third largest market and the one with the greatest potential. China is the country with which we must work if we are to have any impact on the resolution of global problems from environment to nuclear proliferation. China can accelerate the development of African and Central Asian economies, mitigating the risks to Europe that come from population explosion there without adequate economic growth. China is the largest economy in the world and already influential in a majority of countries.

For all these reasons, it is patriotic and reasonable for British leaders to find a way to work with China, which they will only do if they understand China as it is. Among other eminent Brits who started with a morbid suspicion of China, I have accompanied Boris Johnson and Jeremy Paxman on extended visits, and watched the scales fall from their eyes as they understood the enormity of the challenges facing Chinese government and the absurdity of imagining that its leaders wasted a moment thinking about conquering the world.

The reverse is the case. They are determined not to be conquered by the world. In the past, China built a Great Wall to keep out foreigners; today China is initiating the Belt and Road initiative to secure their back as they restore their civilisation, threatened from the east.

Fantasising about regime change in China, some US politicians make outlandish accusations. Had they talked to a few Chinese punters, followed social media or watched chat shows on TV, they could not possibly claim that China is a totalitarian country. Had they read Pew’s surveys of public opinion they would realise that the Chinese are, overall, more satisfied with their governance than European citizens, to say nothing of the USA. And are you surprised? While Europe and the USA are beset by economic and political troubles, Chinese people see ahead of them only more wealth, health and social mobility.

We need to recognise that demonisation of China is a weapon with which some US politicians deflect attention from their own failings and reflect their commercial jealousy. Both our National Cyber Security Centre and GCHQ have maintained until now that Huawei’s involvement in the UK poses no security risk that cannot be managed. Otherwise why would the US trade Department last week reauthorize US companies to work with Huawei, even as Donald Trump bullies other countries not to?

Robert Zoellick, a US former Deputy Secretary of State, is among the calmer heads to remind us just how positive a collaborator China is: that it recognises climate change issues, is in the forefront of environment innovation and has worked hard on endangered species; cooperates with the IMF over stimulation; provides more UN peacekeepers than the other members of the Security Council combined.

He points out that between 2000 and 2018 China supported 182 of the 190 Security Council resolutions imposing sanctions on nations which violated international rules or norms; China collaborated on the Iran and North Korea proliferation treaties.

Zoellick is not given to dire warnings about how dysfunctional it will be if the West really manages to ‘cut China off’, but they are implied in his general remarks about China, restated at a recent Henry Jackson webinar. China, he reminds us, is the biggest contributor to global growth; the fastest growing market for United States products; no longer manipulates the exchange rate; and, in response to our pleas, has improved its legal system. All in all, Zoellick tells us that cooperation with China “does produce results” but we should not take China’s cooperation for granted, “it could be very different”.

At home in Blighty, those calling for “a reckoning with China”, demanding a COBRA-like committee to mull over retaliation, wanting to “hold China to account” should ask themselves whether our businesses, for many of whom China is their most important market, want matters to become “very different”.

As to Hong Kong, the whole world must be astounded at the descendants of nineteenth century imperialists sending out paper gunboats commanding that China order its affairs according to our desires. A long time ago as a student, I demonstrated against colonial rule and police corruption in Hong Kong, and can still feel the truncheon on my back. In the face of much more vicious violence than anything we democracy activists attempted, Beijing has been restrained. In Northern Ireland, when security deteriorated, the UK imposed direct rule and fiercely rejected US interference on the IRA side. Over Hong Kong, we should try to see how interfering former imperialists look to most Asians, let alone to Chinese.

There are aspects of Chinese policies that we do not like, just as there are aspects of US policies that we abhor. The China Research Group is right to be concerned about cyber security and human rights. The way forward is to deal with China as a partner in the solution of common issues, such as terrorism in Xinjiang and Afghanistan. We have always worked with regimes with different standards when it suits our national interest. And respecting and being respected by China is in our national interest.

In the words of Kevin Rudd, the former Australian Prime Minister: Over 30 years China has pulled off the ‘the English industrial revolution and the global information revolution combusting simultaneously and compressed into not 300 years but 30’. There is a lot to learn and if we are to develop and prosper in the world ahead, we must be part of this. We should also celebrate that China’s rise is bringing better nourishment, greater life expectancy, education and security to hundreds of millions around the world.

Fulminating at China’s internal affairs and rejecting Chinese investment in order to please its commercial rivals will have no effect beyond signalling our impotence and arrogance; they are of no benefit to Britain and have no place in a long-term plan for Britain to prosper in the Asian century. Our government must develop a strategic approach to China. We owe it to future generations of Brits to work with China.