China crisis as Huawei ban provokes Xi Jinping

Treasure chest: China already owns many European prizes.

Is it too late for the West to resist China? The UK’s decision, yesterday, to ban Huawei from its 5G network has dramatically upped the stakes in a battle of economics and ideology.

Boris Johnson’s U-turn was so complete, you could almost smell the burning rubber.

Only six months ago, he declared that Britain was giving the green light for a Chinese telecom company to oversee the nation’s transition to 5G. But, yesterday, the House of Commons was told that UK companies must stop buying Huawei’s equipment – a decision made “for our national security and our economy”.

China is furious. The president-for-life, Xi Jinping, is reported to be seething.

Like the rest of Europe, Britain has assiduously courted Chinese investment over the past decade, receiving almost £80 billion worth. It even invited China to help build its next nuclear power station.

But disquiet has grown throughout the West over Beijing’s reluctance to trade fairly, its aggressive foreign policy, and its failure to respect democratic values. For many, the introduction of a new security law to crush protests in Hong Kong was the last straw.

There is concern too about China’s voracious acquisition of overseas assets, many of them symbols of national pride. They range from Pirelli tyres in Italy to the Lloyd’s Building in London – not to mention 13 football teams, such as Inter Milan and Wolverhampton Wanderers. It has also taken control of important transport hubs, among them four airports and six seaports – including Europe’s largest passenger port, Piraeus.

Not only that, but it has sought to divide the EU. It has invested heavily in the largest European economies – Germany, France, and Italy – and then exploited the smaller states’ envy by hiving them off into a separate group called “17+1” and sponsoring many of their infrastructure projects.

At the same time, the US – which, in the past, would have drawn together the countries suspicious of China – has lost influence. President Trump’s “America first” policy has distanced it from friendly nations, while his disastrous handling of the coronavirus crisis has badly dented its reputation for competence.

“The Western-led world order is in crisis,” writes Martin Wolf in the Financial Times. “If the US re-elects Donald Trump, this will be terminal […]. An alliance of liberal democracies dedicated to creating a counterweight to China in some areas, while co-operating successfully with it in others, is conceivable. But it will not happen if the US does not recreate itself as a functioning state.”

But, as Daron Acemoglu and James Robinson argue in their book The Narrow Corridor, China has problems of its own. Its prosperity depends on giving free rein to its entrepreneurs but, in a country without a democratic government and legal system, this inevitably leads to corruption – which undermines the state.

Is it too late for the West to resist China?

Chinese checkmate?

Some say, yes. Even if Huawei were banned from every Western country, it would make little difference: China’s tentacles already go too deep to be removed. It has the world’s fastest-growing economy, and is in a better position than any of its rivals to ride out the inevitable post-pandemic recession. The new trade route it is creating, the belt-and-road system, will make it stronger still.

Others point out that the liberal world is still much more powerful than China: it includes not just Europe and the US, but Australasia, Canada, Japan, South Korea, and India. America’s investment in Europe is many times larger than China’s – and freedom of thought will always give democracies an advantage. As Martin Wolf argues, “The driving force of change is the ideas inside people’s heads.”

You Decide

  1. China boasts of its “four great inventions”: gunpowder, paper, printing, and the compass. What is your country’s greatest invention?
  2. Which is more important: liberty or prosperity?

Activities

  1. Make an illustrated timeline of the history of China from 221BC to the present day.
  2. Research China’s belt-and-road system and draw a map showing how it is designed to work.

Some People Say...

“If you eradicate religion, you end up with something terrible in its place, like the communist state.”

James Trigell, British novelist

What do you think?

Q & A

What do we know?
It is generally agreed that, though Western powers hoped to change China’s values by engaging with it, it has grown more aggressive and anti-democratic since Xi Jinping became president. The former leader who opened up China economically, Deng Xiaoping, pursued a very different strategy: “Hide your strength, bide your time, never take the lead.” Deng also argued that, if China’s government should ever “play the tyrant in the world”, it was the people’s duty to overthrow it.
What do we not know?
One main area of debate is around whether China will significantly increase its overseas assets as a result of the pandemic. Its policy in the past has been to buy heavily into countries whose economies are in trouble: Greece, Italy, and Portugal are cases in point. A common complaint of its trading partners is that Chinese companies are unfairly subsidised by the Beijing government, making it very difficult for Western firms to compete.

Word Watch

National security
Critics of the deal with Huawei warned that China would hide spyware within the 5G system while building it.
Assiduously
Persistently. It derives from a Latin word meaning “sit beside”.
Aggressive foreign policy
In recent months, Chinese forces have threatened those of India, Japan, and Taiwan.
Voracious
Greedy. In Judith Kerr’s book The Tiger Who Came To Tea, the visiting tiger voraciously devours all the food it can find.
Lloyd’s Building
The headquarters of the world’s most important insurance market, Lloyd’s of London. Designed by Richard Rogers, it is nicknamed the Inside-Out Building because it has services like staircases and water pipes on the outside.
Piraeus
Five miles from the centre of Athens, the port has served the city since ancient times when fortifications known as the Long Walls were built to keep the two safely connected.
Belt-and-road
Launched in 2013, this scheme now embraces nearly 70 countries that give China access to their seas, roads, and rail links in return for investment in their infrastructure.

Subjects

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