Boris Johnson tries to find path through US-China cold war

Boris Johnson tries to find path through US-China cold war

Boris Johnson was on Tuesday sucked into the cold war raging between Washington and Beijing, his decision to ban Huawei from Britain’s 5G mobile phone networks — but not yet — a sign of the geopolitical agonies facing the UK prime minister.

Mr Johnson is a self-described “Sinophile” attracted to the commercial opportunities of trade with the Asian superpower, which already has big UK investments in sectors including telecoms, transport and nuclear energy.

Having distanced the UK from its European partners through Brexit, Mr Johnson recognises that his promise to lead a buccaneering, free-trading “Global Britain” is undermined if there is a China-sized hole in the policy.

On Tuesday, Mr Johnson bowed to the commercial and political might of the US by agreeing to ban the Chinese telecoms company Huawei from selling new 5G equipment in the UK from December 31, but the prime minister’s anxiety was evident.

While the ban was welcomed by pro-Washington Tory MPs, there was criticism of Mr Johnson’s decision to let Huawei 5G kit stay in the British system until 2027, while its lower-tech 3G and 4G equipment will never have to be removed.

That decision, along with an agreement that Huawei can continue to provide full-fibre broadband equipment for another two years, was partly an attempt by the prime minister to limit the potential damage to Britain’s digital development.

But it was also an effort to avoid another escalation of tensions with Beijing, already inflamed by China’s security crackdown on the former British colony of Hong Kong.

Oliver Dowden, culture secretary, said on Tuesday that Downing Street was aiming for a “modern and mature relationship with China . . . where we’re able to speak frankly when we disagree but also to work side by side with China on issues where our interests converge”.

Washington had lobbied Downing Street to ban Huawei outright, and after the decision in January to allow the company a limited role in its 5G networks, Donald Trump, US president, admonished Mr Johnson with “apoplectic” fury during a phone call telling him of the move, according to reports of the conversation.

A growing number of companies [are] concerned that their operations and their people will be affected by tensions between the UK and China.”

This strength of feeling was such that some have questioned whether the latest US sanctions, announced in May, were aimed at reversing the UK’s policy as well as damaging the Chinese company.

Britain’s Huawei decision was justified on the “technical” grounds that the Chinese company could no longer buy key US components for its 5G equipment, raising new security questions.

Kori Schake, director of foreign and defence policy at the Washington-based American Enterprise Institute, said the US measures had an “elegance of design” which were “designed to penalise those who would do business with China, in addition to China itself”.

Marco Rubio, one of the toughest China hawks in the US Senate, said he was “very glad” to see the UK move to secure their telecoms networks. But the Florida Republican urged London to ban Huawei “without delay”. 

Jim Risch, an Idaho Republican who chairs the Senate foreign relations committee, said: “I know this has not been an easy decision to make, but it is the right one.”

The challenge for the UK now is to plan a future China strategy which balances security concerns against economic realities. The “golden era” of Sino-UK relations under David Cameron and George Osborne is now tarnished.

UK-China trade has boomed in the past despite political tensions — Mr Cameron’s meeting with the Dalai Lama in 2012 put relations in the deep freeze but commercial ties expanded.

Now, UK business people in China believe politics and economics are more intertwined. And while China’s government has not openly threatened countermeasures on the UK’s Huawei ban, it has hinted at less Chinese investment in the UK.

“Creating an open, equal, non-discriminatory business environment for Chinese companies is a touchstone to see where the UK market is heading after Brexit and it is also a weather vane for whether Chinese investment in the UK is safe,” said foreign ministry spokesperson Zhao Lijian on Tuesday in response to the Huawei decision.

Huawei is only the latest in a series of issues that threaten the UK’s relationship with China. China has already threatened countermeasures in response to the UK’s opposition to the anti-subversion law in Hong Kong.

In addition, UK media in China are expecting to face retaliation in response to the UK media regulator Ofcom’s forthcoming penalty on Chinese state media broadcaster CGTN. Ofcom found CGTN to be in “serious” breach of its rules on fair treatment and privacy earlier this month.

Large British companies in China have been discussing meetings to share contingency plans to prepare for Chinese retaliation for the growing list of Chinese complaints about the UK.

“We have seen a growing number of companies concerned that their operations and their people will be affected by tensions between the UK and China,” said Julia Coym, associate director at consultancy Control Risks in Shanghai.

Many UK businesses hope that their integration into the local economy and their employment of hundreds of local staff will mean they escape threats.

There is precedent for Chinese government threats, whether credible or not, against foreign businesses over Huawei. German carmakers in China have suffered pressure from Chinese officials and partners, who want them to lobby Berlin on its forthcoming decision, according to German media.

“Imports are the most vulnerable, and traditionally that’s what China targets, never formally, but through customs delays and quality checks,” said an industry analyst working with UK companies.