China and the Rules-Based International System Contents


China under President Xi Jinping has become more ambitious, more confident, and more assertive in its approach to foreign policy. China is seeking a role in the world commensurate with its growing economic power, and the United Kingdom should welcome China’s desire to participate in global governance. However, the UK needs to recalibrate its policy towards China to fully take into account the consolidation of power in the hands of the Chinese Communist Party under President Xi. Chinese foreign policy is shaped by the need to serve the interests and perceived legitimacy of the Communist Party. This makes China a viable partner for the UK on some issues, but an active challenger on others.

The current framework of UK policy towards China reflects an unwillingness to face this reality. The UK’s approach risks prioritising economic considerations over other interests, values and national security. If the Government had not already committed in rhetorical terms to a “Golden Era” in UK-Chinese relations, we question whether it would be appropriate to do so now. Yet there does not appear to be a clear sense either across Government or within the Foreign and Commonwealth Office of what the overarching theme of a new policy towards China should be, or how the UK should work with European partners and other allies to implement it.

In this report, we call for the Government to develop a single, detailed, public document defining the UK’s China strategy, crafted via a cross-Government process led by senior Ministers and directed by the FCO. We call on the Government to publish this strategy by the end of 2020.

China’s engagement with the rules-based international system presents opportunities and risks to which the UK Government must respond. For example, Chinese-led investment in foreign countries, and particularly developing countries, need not inherently conflict with British interests. However, China’s Belt and Road Initiative (BRI), in the form it is currently being pursued, raises concerns regarding UK interests. We encourage the Government to employ a strictly case-by-case approach to assessing BRI projects, and to continue to refrain from signing a Memorandum of Understanding endorsing the BRI.

We welcome the Government’s commitment to exercise freedom of navigation in the South China Sea. However, we recommend that the Government make a statement clarifying the purpose of its future naval operations in support of freedom of navigation in the South China Sea, identifying the legal basis on which they are conducted, and the specific claims or practices they are intended to challenge. In communicating its broader strategy in the Indo-Pacific region, the Government should not permit a mistaken impression to arise that the UK seeks direct military confrontation with China. Instead, it should focus on core principles: freedom of navigation; the rights of states to form and maintain alliances of their choosing; and the importance of maintaining a balanced and consensual regional security order. The Government should not permit these principles to become a matter for negotiation in economic dialogue with China.

The continued health of the World Trade Organization is a major point of overlap between British and Chinese interests, although a number of China’s economic practices do pose challenges for the principles on which the global trading regime is based. The UK can play an important role in the US–China trade dispute, by encouraging both countries to focus on the protection of the integrity of the trade regime, including reciprocal market access, in their negotiations.

In the area of human rights, the evidence suggests that China does not intend to reform the rules-based international system but rather intends to subvert it, by promoting an alternative version of human rights which stresses economic development at the cost of the universality of individual civil and political freedoms. We are extremely concerned by the treatment of the Uighur-Muslim population and other minorities in China’s Xinjiang province. We urge the Government to support efforts at the United Nations to create targeted international mechanisms to investigate the situation in Xinjiang, and to insist on the use of existing mechanisms.

There are a number of success stories from UK partnership with China in other multilateral fora, including in the areas of climate change, counter-proliferation, global health and the illegal wildlife trade. We call for the FCO to lead an internal “lessons-learned” exercise across Government examining successes and failures in shifting Chinese positions on specific policy issues.

The Sino-British Joint Declaration on Hong Kong is a legally binding international treaty registered at the United Nations, and China’s adherence to the letter and spirit of the Joint Declaration is a key test of the sincerity of its commitment to global governance. We are therefore deeply concerned by the evidence that Hong Kong’s autonomy is at risk, especially in the area of the rule of law. We believe in the principle of One Country, Two Systems, and the UK Government has the right to say that independence is not a realistic option for Hong Kong. But if the Hong Kong authorities’ approach to the independence movement were to be replicated more broadly, this would be a very grave threat to the autonomy promised to Hong Kong under the Joint Declaration.

The combination of a China characterised by strengthened Communist Party control and a desire to project its influence outwards, on the one hand, and ever-increasing economic, technological and social links between the UK and China, on the other, presents serious challenges for the UK. As concerns grow about the long-term strategic intentions of the Chinese state, so should the Government’s caution about the involvement of Chinese companies in any aspect of UK critical national infrastructure, including telecommunications. We see considerable grounds for concern about Huawei’s involvement in the UK’s 5G infrastructure. In the course of this inquiry, we have also heard troubling allegations concerning attempted Chinese interference in the UK’s domestic affairs, especially in academia. This is a topic we will pursue in our new inquiry into autocracies and UK foreign policy.

The challenges and opportunities presented by China’s rise deserve no less than the comprehensive and ambitious strategic approach we recommend in this report. A constructive, pragmatic and often positive UK relationship with China is possible. But achieving this will require strategy, rigour and unity in place of hope and muddling through.

Published: 4 April 2019