Next Up In The UK Brexit & Belt And Road Debate: To Huawei Or Not To Huawei?

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Boris Johnson’s Attempts To Balance US Hegemony Against China Trade 

Op/Ed by Chris Devonshire-Ellis 

Now that British Prime Minister Boris Johnson has been able to deliver a General Election allowing his Brexit policies to reach fruition, where does this leave potential British interests along China’s Belt & Road Initiative?

With the UK poised to first commence negotiations over both the terms of departure, and restructuring alternative UK-EU trade policies, London will be looking at other trade alternatives. And those include the potential for getting more involved in the Belt & Road Initiative.

While Washington is likely to interfere with the UK ability to conduct a Free Trade deal with China as part of any US-UK deal, the Belt & Road is another matter, and one in which London has not always followed Washington’s advice.

George Osbourne, then British Chancellor of the Exchequer, advised Britain to “Run towards China” in 2015, and the UK subsequently became the first major Western country to join Beijing’s Asian Infrastructure Investment Bank. Former British Prime Minister David Cameron, launched what he called a “golden era” of relations between Britain and China, signing off numerous billion dollar deals before later resigning after the original Brexit vote. He has subsequently tried to raise funds to invest in projects with China’s Belt and Road Initiative.

But what of Johnson? Historically, he has a more erratic position when it comes to China affairs.  “China is a rival,” Johnson said when he was British Foreign Secretary “But China is a rival whose growth and whose incredible developing power can be used to our advantage.”

He has also said “Britain should treat China as our friend and our partner.” while also saying “They will try to stiff us.” Johnson’s position has long been regarded as being that the UK can benefit from Chinese investment and trade, while keeping the political angle at arm’s length.  His success in achieving this balancing act will be noticeable in how far he will be able to resist Washington’s pressure to impose UK trade restrictions on China as part of a UK-US deal.

Meanwhile, we may very soon get an indicator of how Britain’s future involvement with China and its Belt & Road Initiative will look in terms of trade potential.

At the recent NATO 50th anniversary event in London, which US President Trump also attended, Johnson promised he would keep the Chinese telecommunications giant Huawei away from Britain’s 5G network if it jeopardized the United Kingdom’s intelligence work with the United States, Canada, Australia, and New Zealand. “I don’t want this country to be unnecessarily hostile to investment from overseas but, on the other hand, we cannot prejudice our vital national security interests.” Johnson said. Then, less than 24 hours later Johnson pulled out a phone and took a selfie with the popular UK breakfast “This Morning” TV presenters – and used a Huawei phone.

The newly elected British Government is set to vote on whether to allow Huawei equipment into its national 5G network later this month. How that pans out will provide clues as to London’s new intentions in working more closely with China – or otherwise.

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About Us

Silk Road Briefing is written by Dezan Shira & Associates. The firm provides strategic analysis, legal, tax and operational advisory services across Eurasia and has done since 1992. We maintain 28 offices throughout the region and assist foreign governments and MNC’s develop regional strategies in addition to foreign investment advice for investors throughout Asia. Please contact us at asia@dezshira.com or visit us at www.dezshira.com

 

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