As Theresa May Pursues Deals in China, Her Own Troubles Follow
Posted January 31, 2018 12:27 p.m. EST
BEIJING — Theresa May on Wednesday joined a succession of British prime ministers who have turned to China for trade, investment and a shot of confidence, while offering Britain as a reliable, competitive base in Europe.
But her three-day trip to China, shadowed by uncertainties about Britain’s withdrawal from the European Union as well as May’s hold on power, has the makings of a long march.
Before her arrival Wednesday, May said the trip would “intensify the golden era” in the two countries’ relationship, echoing language that her predecessor, David Cameron, had used to court President Xi Jinping.
In the Great Hall of the People in central Beijing, May told China’s premier, Li Keqiang, that they should seek to “build further on that golden era and on the global strategic partnership that we have been working on between the U.K. and China.”
Li responded with equally effusive rhetoric.
But while Chinese leaders seemed unlikely to publicly air any misgivings over Brexit, as Britain’s withdrawal from the bloc is known, or about May’s ability to deliver on commitments, experts said such worries would cloud her visit and limit its results.
“This is the first visit by the British leader since the Brexit referendum, and for both sides the primary aspect is reaffirming the status of that Sino-British ‘golden era,'” said Cui Hongjian, director of European studies at the China Institute of International Studies, a state institute in Beijing.
“Sino-British trade has felt some impact from Brexit,” Cui said. “We’ll see whether this time there can be better communication to resolve some problems.”
May’s own political fate is also weighing on the visit. On her flight to her first stop in China, Wuhan, an industrial city on the Yangtze River, she was peppered with reporters’ questions about calls for her resignation from within her own Conservative Party.
“I’m not a quitter and there is a long-term job to be done,” she said, according to Reuters. “That job is about getting the best Brexit deal, about ensuring that we take back control of our money, our laws, our borders, that we can sign trade deals around the rest of the world.”
China, the world’s second-biggest economy, could become a more important source of customers and investment for Britain as its scheduled March 2019 departure from the European Union looms. After her meetings in Beijing, including with Xi, May will visit Shanghai to promote trade and investment.
In 2016, China was the destination for 3.1 percent of British exports of goods and services, while 43 percent went to other EU member countries. Chinese officials are eager to talk up prospects for more business, and British exports to China have been growing. Representatives of more than 40 companies, universities and trade groups are accompanying May on her trip.
In a press appearance with Li, May said that she had won China’s agreement to take steps toward lifting a ban on British beef imports, which dated back to the crisis over mad cow disease during the 1990s.
But China also bristles with policies and practices that protect many domestic industries from foreign competitors, and May has sounded a more guarded note about prospects for cooperation than did Cameron and his Labour Party predecessors, Gordon Brown and Tony Blair. Cameron and George Osborne, the former chancellor of the Exchequer, courted Chinese investment aggressively, placing less emphasis on contentious issues like democracy, human rights and the future of Hong Kong, a former British colony. In 2015, Britain also bucked the United States by joining China’s fledgling Asian Infrastructure Investment Bank.
But May, who took office in 2016, has taken a cooler approach to Beijing, delaying for several months a decision to build a nuclear power plant with Chinese investment. Her government ultimately approved the project, but promised conditions that it said would protect the security of critical infrastructure.
“It was a very marked shift from the moment she came to power,” said Rosemary Foot, a senior research fellow at the University of Oxford who studies Chinese foreign relations.
Chinese interest in investing in some sectors of the British economy, like infrastructure, technology and even financial services in London, probably will not be seriously dampened by Britain’s departure from the European Union, said Paul C. Irwin Crookes, a senior lecturer at Oxford University who is studying the consequences of Brexit for the countries’ ties.
But in other sectors, Chinese companies’ willingness to invest could depend greatly on the terms of Britain’s new relationship with Europe, he said.
In theory, after it leaves the bloc, Britain “could design a relationship with China that could move away from the model currently being put forward in the EU-China relationship,” Irwin Crookes said by email. But in practice, the European Union may demand that Britain avoid policies that undercut European trade positions, he said.
“This then is also a matter of high politics, and it is unclear in what direction it could move,” Irwin Crookes said.
This is not May’s first visit to China; she and Xi met during the Group of 20 summit meeting in the eastern city of Hangzhou in 2016. But this time, May faces the dilemma of whether to endorse Xi’s “Belt and Road” initiative — his expansive vision of ports, roads, railways and other infrastructure to spread Chinese trade and influence.
That project has unsettled some U.S. and European policymakers, who worry it will be a vehicle for one-sided Chinese influence and interests. Britain has been cautious, but Xi has made it one of his signature international undertakings. May said in Beijing that Britain would work with China on deciding how to cooperate on the initiative, while ensuring that it “meets international standards.” “Obviously, China knows that Britain is pretty desperate for trade deals, so maybe she’s trying to generate a bit of leverage of her own,” said Foot of Oxford. “Secondly, there’s a genuine concern that involvement in ‘Belt and Road’ is not going to be open, essentially, to other companies and to other countries.”
May has also been pushed to raise what Chris Patten, the last British governor of Hong Kong, called “increasing threats to basic freedoms” in the city, which Britain returned to China in 1997 under a promise that Beijing would let it keep its civil liberties and legal autonomy for 50 years. Xi’s government has tightened its grip on Hong Kong politics, publishing and news media, especially since the 2014 protests there over China’s refusal to allow fully democratic elections in the city.
In a letter to May this week, Patten and Paddy Ashdown, former leader of the centrist Liberal Democrats, asked for assurances that Britain’s growing commercial relationship with China would not “come at the cost of our obligations” to the people of Hong Kong.
“It’s been very difficult to build up a broad base of interest in the subtle changes that have been going on in Hong Kong,” Foot said. “It’s a long time since the handover of 1997, so it’s been very difficult against the weight of China’s economic and political prominence.”