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.

Alan Mak: Britain should champion a new Five Eyes critical minerals reserve system

30 Jun

Alan Mak is MP for Havant and Founder of the APPG on the Fourth Industrial Revolution.

The on-going trade dispute between the US and China has put the spotlight on so-called “critical minerals”. We in Britain cannot afford to be passive observers. Instead, we should take an active interest in this key strategic and economic issue, and play a leading role in safeguarding access to critical minerals, both for ourselves and our Five Eyes allies. Ensuring our scientists, manufacturers and technology businesses have a secure and reliable supply of critical minerals is vital for Britain’s leadership of the Fourth Industrial Revolution.

Critical minerals consist of the 17 Rare Earth Elements (REE) recognised by the International Union of Pure and Applied Chemistry, with names such as promethium and scandium, plus other economically valuable but relatively rare minerals such as lithium and cobalt (used in batteries), tungsten (used in defence products including missiles), bauxite (the source of aluminium) and graphite (key to battery production).

The REEs have unique magnetic, heat-resistant, and phosphorescent properties that no other elements have, which means they are often non-substitutable. Whilst used only in small quantities, they are key components in a wide range of consumer products from mobile phones, laptops and TVs, and have widespread defence applications in jet engines, satellites, lasers and missiles.

Although they are more abundant than their name implies, REEs and critical minerals are difficult and costly to mine and process. Converting critical minerals embedded in rocks from under the Earth’s crust to separated elements is a complex and costly process which often involves the use of highly concentrated acids and radiation.

China hosts most of the world’s processing capacity and supplied 80 percentemploy of the REEs imported by the US from 2014 to 2017. On average, China has accounted for more than 90 pe cent of the global production and supply of rare earths during the past decade, according to the US Geological Survey.

By contrast, the US has only one rare earth mining facility, and currently ships its mined tonnage to China for processing. Lynas Corporation, based in Australia, is the world’s only significant rare earths producer outside China. Other critical minerals are similarly concentrated in a small number of producer nations. For example, the Democratic Republic of the Congo was responsible for around 90 per cent of the world’s cobalt production in 2018, whilst Guinea dominates bauxite, with around 35 per cent of the world’s reserves.

As globalisation and industrialisation accelerate around the world, critical minerals have become a highly sought-after resource for the high-technology, low-carbon and defence industries. They will play a vital role in Britain’s future plans for economic growth, innovation and green industrialisation, especially as we renew and expand our manufacturing base in the wake of Coronavirus.

Given the national strategic and economic importance of critical minerals, the UK needs to act now and lead efforts to protect our national supply for the future. Neither we nor our Five Eyes allies can remain reliant on one producer for anything, including critical minerals. Here are four steps we should take:

Establish a New Five Eyes critical minerals reserve stockpile

The Five Eyes intelligence sharing partnership between Australia, Canada, New Zealand, the USA and the UK has been in existence since 1941 and provides the perfect foundation on which we should develop a new critical minerals reserve that would end our collective vulnerability of supply.

The reserve would consist of inter-connected physical national stockpiles of critical minerals, and then extend to become a processing chain that all partners could draw on. The US already maintains stockpiles, and creating others including in Britain would lead to new jobs. The UK is never going to become resource independent, but through international co-operation we can diversify supply and refine, through innovation, the processing of these elements.

Use our international aid budget to secure critical minerals supplies

As the Foreign Office and DFID merge, the UK can align its development goals alongside diplomatic priorities. We should deploy our international aid to unleash the untapped supply of critical minerals in developing countries, effectively funding the start-up of new critical mineral mines and processing plants. This would enhance our supply of these elements and create jobs, transforming communities around the globe through trade, not just aid. China has already implemented a similar strategy in Africa, for example providing Guinea with a $20 billion loan to develop the country’s mining sector.

Create a new National Critical Minerals Council

The Government should establish a new National Council composed of metallurgists, scientists and foreign policy experts to monitor global trends in critical minerals, and advise the Government on rare earths and its strategic stockpile. Given the national security and defence procurement implications, the National Council’s establishment would help to keep this issue at the forefront of future policymaking.

Become the world’s greenest stockpiler by incentivising private sector involvement in critical minerals processing

The Government should provide funding for greater research into how we can improve the processing chain of critical minerals with a focus on how we can tighten environmental controls in this sector internationally.

The UK should establish itself as the world’s “greenest stockpiler” of critical minerals by offering incentives that encourage private sector investment in recycling processes and reward companies that contribute to the UK stockpile. We need more facilities like the University of Birmingham’s Recycling Plant at Tyseley Energy Park, which is pioneering new techniques that are transforming the recycling of critical minerals such as neodymium, which is commonly found in hard disk drives.

The Coronavirus pandemic has taught us the importance of supply chain security, whether for PPE or critical minerals. With our reputation for scientific excellence, global alliances and diplomatic networks, we can help ourselves and our allies strengthen our access to the key minerals that will power our economic growth and innovation potential for decades to come.

This is the first in a three-part series on how to boost our economy after Coronavirus.

Anand Menon: Our latest research finds that the Conservatives are divided on economics, but united on culture.

30 Jun

Anand Menon is Director of the UK in a Changing Europe.

Dominic Cummings must be rubbing his hands with glee. As more and more questions are raised about what some are calling the ‘lethal amaterurism’ that has characterised the Government’s handling of the Covid-19 crisis, the country spent most of June distracted by furious arguments about race and statues.

This has moved the debate on from Boris Johnson’s chief advisor’s unique approach to optical health. More importantly, a debate about values rather than health outcomes suits the Government down to the ground.

The referendum of 2016 polarized the country along values lines (between social liberals and social conservatives) rather than along the left-right cleavage that traditionally structured political competition.

Source: British Election Study

Nor was this a one-off phenomenon. The values division laid bare by the referendum went on to shape the nature of subsequent electoral competition. Think back to last year’s election.

The fact that the Conservatives won seats like Wakefield, Bishop Auckland and Workington, or that they won by 21 per cent among working class voters is testimony to the realignment that had taken place in our politics.

So too is the fact that in seats where over 60 per cent backed leave, the Tories increased their support by an average of six per cent, whereas in those seats where more than 60 per cent voted Remain, the party’s vote actually fell by three points.

The argument over statues that has been such a central part of the Black Lives Matter protests in this country has mobilized that same division. And it is terrain on which the Conservatives are relatively well equipped to fight.

Recent work carried out by the UK in a Changing Europe compares the attitudes of MPs, party members and voters, by asking each group a series of questions about fundamental ideological attitudes. The findings are revealing.

When it comes to social values, the Conservative clan looks relatively united. Even more importantly, on values they are far closer to those crucial voters who switched from Labour in 2017 to the Conservatives in 2019 than to Keir Starmer’s party.

But when it comes to the politics of left versus right – questions like whether ‘there is one rule for the rich and one for the poor’, and the idea that ‘ordinary working people do not get their fair share of the nation’s wealth’ – the picture could hardly be more different.

Conservative MPs are to the right of both their own party members and Conservative voters, and significantly to the right of those 2019 Labour-to-Conservative switchers. Labour, on the other hand, is not just far less internally divided but considerably closer to those lost voters.

Looking forward, then, the Conservatives have an interest in maintaining a focus on values. Think of it this way. On the (feigned) threat to Churchill’s statue in Parliament Square, the Conservative Party spoke with one voice and rallied behind Boris Johnson. When it comes to the economic response to Covid-19, the party’s backbenches are increasingly restless.

The easing of lockdown will focus attention firmly on economic recovery. How these issues are framed then takes on crucial importance. We face another decade in which political life will be shaped by the impact of an economic crisis.

The Conservative narrative may well seek to major not on the details of the economic response – on how great the role of the state should be, or how we pay for ballooning deficits – but on arguably more ‘ephemeral’ concerns.

Conservative commentators are already queuing up to point out that it is surely no longer a priority to publish gender pay gaps, or to ‘suffer a little for the sake of the planet.’ Others argue that fads like the war on plastic have been made redundant by the virus.

It seems Number 10 is, in the short term, planning a number of ways of triggering values divisions. The Sunday Times reported that the Government is planning to scrap plans to allow people to change their legal gender.

Other reports suggest that some in Downing Street are encouraging the Prime Minister to launch a ‘war on woke’. The hope is clearly to profit from profound values divisions within Labour’s electoral coalition and detatch voters who might, if it really were all about the economy, stupid, support the centre-left rather than the centre-right.

For Labour, then, the key will be to find a way to nullify this strategy. Paul Mason has rightly argued that the party must focus on coming up with a more convincing narrative about reshaping the role of the state in the economy, as a means of uniting a coalition that has fractured over the last decade over values questions.

The party now has a leader that the public, including Leave voters, find broadly convincing – and one who is going to be less easy to label as an unpatriotic ultra-liberal.

A narrative about economic fairness unites Labour and has the potential to tap into the ideological attitudes of the median voter.

The Government’s current plans to emerge from lockdown will create millions of economic losers, and the Conservatives look set to incur significant governing costs.

A laser like-focus on the economy and on the steps needed both to recover from the post-lockdown slowdown in such a way as to tackle the numerous inequalities that the pandemic has highlighted could command broad support, not least among those voters that fled the party last year.

As the recent Labour Together review of the 2019 election concluded, Labour could win by building support for a ‘big change economic agenda’ that neutralises cultural and social tensions.

Whatever happens, the relative impact of the two cleavages – left vs right and social liberal vs social conservative will be crucial. The relative success of each side in imposing its own agenda on the political debate will help determine who ultimately triumphs.

This article is a cross-post from the UK in a Changing Europe’s website.

Read the Mind the values gap report here.