Cameron sells out to China

An article notes the growing friendship between China and the UK, “Britain’s increasingly warm relationship with China is getting radioactive. On Wednesday, Chinese President Xi Jinping and British Prime Minister David Cameron shook hands on a $9 billion Chinese investment to help build the first nuclear power plant in the U.K. in a generation. It was the shiny centerpiece of a $46 billion investment package the two countries agreed to during Xi’s four-day, red-carpet visit to his new “best partner in the West.” Britain hopes to ingratiate itself with the world’s second-largest economy, while China hopes the deals, especially the massive investment in the controversial and hugely expensive Hinkley Point nuclear power station, will serve as a bridgehead for more multibillion-dollar nuclear deals. The two countries are talking about Chinese investment in two additional nuclear plants, including one that will use Chinese-built reactors”.

The writer goes on to note crucially that the real driving force is not Cameron but Osborne, “The energy-sector investments are part of a broader British shift toward China, led by George Osborne, the chancellor of the exchequer, Britain’s top Treasury official. He touted London as Beijing’s potential “best partner” on a glad-handing trip through China last month. And Xi’s visit to London comes after months of explicit British government support for a growing Chinese economic role in the world, from joining the Chinese-led Asian Infrastructure Investment Bank, to supporting Beijing’s bid to transform the renminbi into a global reserve currency”.

The short term danger is that energy consumption has been declining in the UK for a decade and this energy deal will guarantee the Chinese a certain price irrespective of demand. This will naturally come from the UK taxpayers rather than “the market”. On that reason alone the deal is a disaster. The longer term concern is that it will prop up the Chinese regime and at the same time tie the UK government to this regime just as it is showing its manifold weaknesses.

Importantly the article makes the valid point that “More worrisome for Washington, the rapprochement comes as top British officials, including Cameron, shy away from confronting China on contentious issues like human rights or the militarization of the South China Sea — even as the United States tries to craft a tougher approach. That has plenty of observers in the United States and the U.K. fretting that Osborne’s courtship of China threatens the decades-old special relationship that has long served as the keystone of the trans-Atlantic alliance. While the White House publicly downplays the significance of the Sino-British embrace — “the United States welcomes strong relations between our allies and China,” press secretary Josh Earnest said Monday — many U.S. diplomats are privately said to be “incandescent” with rage at Britain. And many in Britain, from former officials to current opposition politicians, have excoriated what they see as a British sell-out to Beijing”.

The author goes on to argue “The British drift toward China, capped by this week’s big investment announcements, underscores the degree to which the relationship is still transactional. Like Russia, Pakistan, and others, Britain sees in China a deep-pocketed investor who can help underwrite needed but costly infrastructure projects. Beijing is investing hundreds of billions of dollars to build railroads, pipelines, deepwater ports, power plants, and more fromCentral and South Asia to Europe“.

The writer takes the energy deal as a case in point “Nowhere is that clearer than with the Hinkley Point nuclear plant, a mammoth, 3.2 gigawatt power station estimated to cost about $38 billion and which the British government says is needed to avoid the threat of future electricity blackouts. Britain, along with the plant’s lead corporate sponsor, France’s EDF, had struggled to get Hinkley Point out of the starting gate due to its huge budget”.

Crucially he continues “Hinkley’s opponents disagree. The British government had to offer investors guaranteed, high tariffs for the electricity produced by the power plant, which they say will cost British ratepayers billions of pounds every year for decades. That degree of state support for nuclear power has already put Britain at odds with Austria and other European Union countries. And Xi’s cash-fueled visit comes just as the bedrock of British industry, the steel sector, is reeling from layoffs caused in large part by unfair competition by Chinese firms. That has created terrible optics for Osborne’s panda hug. “It is difficult to comprehend exactly what the chancellor thinks he’s doing,” said Paul Dorfman, an expert on nuclear power at the Energy Institute, University College London, and an outspoken critic of Hinkley Point. He criticises the British decision to bet so heavily on nuclear power to avoid blackouts, given the reactor’s terrible track record so far. Experts estimate it could take another decade at least to come online. “If you are worried about an electricity gap, the last thing you want is to build an EPR, because it simply won’t be there,” Dorfman said”.

As if that was not enough the author notes the Sino-UK embrace will become a security threat, “The Chinese nuclear investment is causing additional worries, including cybersecurity. Former British officials and opposition politicians are afraid that Chinese ownership of a nuclear plant will give Beijing the opportunity to plant “Trojan horse” type cyberdevices inside critical infrastructure, or threaten to shut down the power plant at times of tension between the two countries. The United States, for example, carefully scrutinises all foreign investment in potentially strategic sectors, and in recent years has blockedsome Chinese deals, even in seemingly innocuous things like wind farms”.

Worryingly he ends “For now, Chinese money is set to keep flowing into Britain, and commercial imperatives look poised to bring London and Beijing closer together. But, just as Australia had to learn how to walk a fine line between trade and security when it comes to balancing relations with China and the United States, Britain too may soon face a difficult choice between its long-time ally and the new rising power”.


2 Responses to “Cameron sells out to China”

  1. “Ending the biggest ­population-control experiment in history” | Order and Tradition Says:

    […] effects on its economy, military power, and future strength all at a time when the UK is getting dangerously close to […]

  2. Chinese geopolitics in Europe | Order and Tradition Says:

    […] led to a few diplomatic victories. Fueled by big investments in the energy sector, Xi received red-carpet treatment from British leaders on a state visit last year, and China considers the U.K. its best friend in the West. Several of […]

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