London calling Huawei out

Opinion piece (Aspenia Online)
16 July 2020

After much deliberation, in mid-July the British government decided to implement restrictions on the role of controversial Chinese company Huawei in the UK’s next-generation 5G telecommunications network. Mobile providers will not be able to buy Huawei equipment from the end of the year, and will have to strip Huawei 5G equipment from their networks by 2027. This is only one element of a broader shift towards a tougher UK stance on China, which offers clues as to how post-Brexit ‘Global Britain’ will position itself on a number of issues.

In January, the British government allowed Huawei into its 5G network despite concerns that the company is ultimately under the control of the Chinese state and therefore poses a security risk. The reason was economic: excluding Huawei would have entailed greater costs and delays in building the 5G network. Security risks were mitigated by capping  Huawei’s share to 35% of the 5G market and excluding the company from the ‘core’ of the network.

But the situation changed in May, after the US announced new sanctions that will cut off Huawei’s access to critical US components. The company will have to source components elsewhere, probably China, as most non-Chinese suppliers are unlikely to be willing to work with it. A new security enquiry by the UK’s National Cyber Security Centre is believed to have concluded that using Huawei presented a larger risk.

Growing tensions between China and the US, and China’s recent actions, made the UK’s previous position on Huawei untenable. Washington and Beijing have traded rhetorical blows over the past few months. President Trump has taken an increasingly hostile stance towards Beijing, accusing it of covering up the coronavirus pandemic, and stating he wants the US to “decouple” from China. Democrats agree that the US needs to be tougher with Beijing. For the UK, it became very difficult to have close relations with both the US and China. London’s move to allow Huawei into its 5G network in January had created tensions with the US, with Washington saying there might be consequences for intelligence sharing with the UK. The Johnson government’s refusal to ban Huawei also risked complicating negotiations over a trade deal with the US, in which London has invested much hope after its decision to seek only a very thin trade relationship with the EU.

At the same time as the US-China clash gained momentum, there was also a shift of political sentiment towards China in the UK. The days when former Chancellor of the Exchequer George Osborne (with David Cameron’s government, between 2010-16) courted investment from China, promising he would turn Britain into Beijing’s “best partner in the West” are long gone. Evidence of China’s mistreatment of its Uygur minority had already harmed Beijing’s standing before the outbreak of COVID-19. The pandemic has highlighted the UK’s dependencies on China and strengthened the view that close economic ties to Beijing are a potential vulnerability. Beijing’s behaviour during the pandemic has further damaged China’s image. China has launched large-scale disinformation campaigns about coronavirus to further its geopolitical aims, and threatened or sanctioned countries that criticised its handling of the pandemic, such as Australia.

But the tipping point has been China’s response to protests in Hong Kong. The territory, which the UK handed over to China in 1997, was supposed to operate for 50 years under the “one country two systems” principle. China’s recent imposition of a new highly restrictive security law on Hong Kong brought that arrangement to a premature end. The UK thought China had broken the 1997 agreement and sharply condemned Beijing’s actions, along with the US, Canada and Australia. The UK also decided to offer a path to British citizenship for almost three million Hong Kong residents, with the government saying it would not “look the other way”.

The exclusion of Huawei from Britain’s 5G network and the robust response to China’s moves on Hong Kong are just two pieces of a tougher British approach toward China. A newly launched ‘Project Defend’ aims to reduce vulnerabilities from dependence on external suppliers like China for vital medical supplies and other goods. The government is also drawing up restrictions on Chinese takeovers of British firms. Crucially, the UK’s new approach to Beijing reflects a cross-party consensus: the Labour Party has added pressure to the government, calling for a ban on Huawei, and urged Johnson to take a stand on Hong Kong and be generous towards its inhabitants.

The UK’s new stance towards China offers clues as to how ‘Global Britain’ might position itself more generally. Many observers believed that post-Brexit UK would pursue a mercantilist foreign policy, always putting profit before principle, especially when dealing with a large market like China. Indeed, this approach seemed likely up until recently and might still characterise the Britain’s relationship with countries like Saudi Arabia. But Beijing’s actions over the past few months, and the increase in US-China tensions, made it impossible for the UK to maintain business as usual with China.

The UK has joined the US, Canada, and Australia in taking a tougher line with China. But this does not necessarily signal a broader pivot away from Europe. Although the EU has been more restrained than the UK on its criticism of Hong Kong, it is also hardening its stance on China. Last year the European Commission labelled China a ‘systemic rival’, and it is developing plans to restrict Chinese investment and make it harder for its companies to compete unfairly on international markets. Moreover, while the UK has rejected a close trade and foreign policy relationship with the EU this does not mean it does not intend to work with the other Europeans anymore.

The UK’s lack of interest in institutionalised foreign policy cooperation with Brussels reflects scepticism towards the EU’s structures rather than a desire to detach from Europe altogether. The UK hopes to continue to cooperate with member-states on an ad hoc basis, such as the E3 group with France and Germany, or a new European Security Council. It is worth noting that there are many issues on which the UK and the US are not aligned: London still supports the 2015 Iran nuclear deal, and it does not agree with Trump on climate change or on inviting Russia back to the G7.

Rather than choosing between alignment with the US or Europe, ‘Global Britain’ wants to cast itself as a diplomatic broker and bridge builder. The government has put forward the idea of setting up a ‘D10’, a group of democracies, made up of the G7 countries, plus Australia, South Korea and India. The group would be focused on finding alternative suppliers of 5G to Huawei, and reducing reliance on China for supplies of critical goods.

Whether Brexit-Britain can play such a bridge-building role remains to be seen. Nothing prevented the UK from doing so as a member of the EU. Had the UK stayed in the EU, it would have been able to exert a greater influence on the Union’s stance towards China, particularly on devising a tougher response to Beijing’s actions in Hong Kong. It may also have had greater protection inside the EU from any Chinese retaliation.

Nevertheless, the UK’s allies should constructively engage with its ideas as and when they become more concrete. Creating a forum that seeks to foster cooperation on new technologies between the world’s largest and most powerful democracies would be a good idea in an uncertain post-COVID world.

Luigi Scazzieri is research fellow at the CER.