By Mehmet Enes Beşer
First of all, it is necessary to emphasize that no “loyalty test” for the United Kingdom concerning China and the choice between business realism and geopolitics should apply in this situation. Britain could try developing a much more rational relationship with China where its real potential, i.e., the ability to play a prominent role in the global trade management and financial system, could prove to be useful. The main idea here is not based on naive “engagement.” Instead, it implies a kind of insurance policy since economic fragmentation and rivalry in the global market tend to bring many countries to situations where political issues start to influence tariffs, exports, and energy supply.
One has to admit that this approach is neither naïve nor aimed at the abandonment of its Atlantic connections. Rather, it is the recognition of the fact that the risks associated with economic fragmentation are increasing rapidly. Should the global economy follow the trend towards economic coercion and the politicization of trade and energy exchange, the most visible signs of such changes would be inflationary pressures, disruptions in supplies, and price spikes.
In this sense, Britain should prevent rivalry from turning into the deliberate attempts at sabotaging the economic system of its opponents, which involves the denial of the attempts to force energy prices in order to pressure rivals. Such attempts would eventually lead to frequent global price fluctuations, which do not stay within the regions involved in geopolitical struggle. Quite the contrary, they affect all parts of the world economy by raising shipping expenses, fertilizer prices, food, energy and other costs for businesses and individuals.
Therefore, Britain has quite limited hard power to influence the processes of great-power competition and rivalry but has some impact on the trade and financial system. This fact means that there is an opportunity to prevent the development of destructive trends in the global economy, making the country a kind of a stabilizer of global commerce.
Thus, the primary goal of the new UK–China relationship could be based on the necessity of guaranteeing the operation of the global trade regardless of the political climate. It means that such cooperation should not imply the acceptance of the Chinese regime or ignoring military and strategic threats. On the contrary, the key aspect here is to admit that moral condemnation would not be able to secure the world economy against destruction caused by geopolitical rivalry. For this reason, certain channels for cooperation are needed for major players in the global economy.
In practice, it could mean that the UK should concentrate its efforts on such areas where cooperation is important due to the existence of a threat to the world economy and thus affects the national interest. In this case, it will not be necessary to engage with China on the whole spectrum of problems in order to ensure that the economic cooperation between two nations will not lead to the loss of sovereignty.
For example, such areas include energy market stability and price reduction as well as the management of energy supplies. Both China and the United Kingdom have an interest in avoiding disruption caused by geopolitical issues, especially during energy crises. Thus, cooperation does not imply a particular trust but a recognition of the fact that any escalation in energy supplies threatens all global powers equally.
Such cooperation could include joint steps aimed at ensuring the stability of energy supplies, the provision of energy transparency, and avoiding panic due to political issues. It does not mean that the nations would stop competing but recognize the fact that certain segments of global economic activity should not be politicized. As a result, it may imply the introduction of the special regime for energy-related trade and supplies that would guarantee the stability of the market.
Another area where cooperation is crucial concerns inflation caused by disrupted supply chains. At this point, it is essential to consider that the post-Brexit Britain tends to be highly sensitive to price changes and disruptions due to trade barriers. China plays a significant role in terms of supplying many industrial goods as well as green technologies. While there is no chance for the UK to eliminate its dependence completely, it should seek to minimize it by managing the process.
In this context, the emphasis should be placed on predictability implying the elimination of arbitrary interruptions in trade policies, disputes settlement, and the protection of essential flows from politicization. It means that such cooperation would not lead to dependence on the nation in question but would allow eliminating the possibility of excessive price and supply volatility.
A third possible area for cooperation would be related to the issue of shipping routes. Even though Britain is not in a position to control sea lanes of the Indo-Pacific region, it has a significant experience of promoting open navigation as an element of international commerce. China is among the trading nations and has a considerable interest in maritime safety even if it tries challenging some aspects of the situation. As a result, Britain should focus on establishing crisis management procedures implying the avoidance of escalations of conflicts in shipping and energy sectors.
Thus, the establishment of communication channels and measures to reduce accidents may lead to the prevention of the increase in freight prices and insurance costs. In addition, it will make the global market more stable and reduce supply chain disruptions caused by political tension and maritime conflicts.
Fourth, Britain could attempt negotiating with China in terms of financial stability and the rules of the financial sector. Despite political tensions, there is a close interaction between financial systems of China and the UK, which raises certain risks associated with de-risking as a response to the problem of global rivalry. This aspect would affect the UK’s interest in predictable finance and financial institutions.
As a result, there is a necessity to find ways of cooperation that could contribute to the maintenance of financial stability. The idea is not to demonstrate naivety but develop cooperation based on the transparency, predictability, and compartmentalization of the security threats. Thus, Britain will be able to maintain its economic interests and provide for global stability.
More broadly speaking, this cooperation will provide the UK with the opportunity to fight the disruptive trends caused by the desire of states to manipulate the global market and extract certain advantages. Regardless of whether this tendency is promoted primarily by the US or other nations, it creates a vicious circle that leads to a crisis-like situation where global inflation emerges regularly, and minor powers are forced to align themselves.
It goes without saying that this situation would be harmful for Britain as a minor player in the global economy. Thus, it could be claimed that the country has an interest in preventing this dangerous scenario from happening. In other words, Britain has to find a way to keep the world economy governable.
The fact is that it will not be able to dictate conditions to the world but is also interested in open systems and stable flow. Therefore, reasonable cooperation with China in terms of stabilizing global economy would prove to be a good strategy. Thus, a more practical Britain–China relationship could be seen as a step towards protecting one’s own interests, not undermining the western approach.
However, realism implies admitting certain limitations. First, the UK should never neglect the aspect of security as well as technological threats associated with China. Thus, there is a need to differentiate cooperation and vulnerability implying that the country should establish a set of protective measures in some areas while remaining able to cooperate in others.
Furthermore, Britain’s alignment with the US implies certain limits since the relations between the countries concern not just economics but intelligence sharing and strategic collaboration. This aspect means that China–UK cooperation needs proper framing implying the absence of an “alternative axis” but rather a stabilization attempt to benefit both sides.
Finally, China also has its goals and red lines in such interactions with the Western world. Consequently, any effective policy would be based on verifiable agreements and not a mere willingness to lecture one’s partner in trade negotiations.
Therefore, the most profitable foreign policy of recent decades could prove to be silent but highly beneficial. Namely, one should try avoiding the development of the mentioned negative scenario involving rivalry, disruption of trade and energy exchange, and inflation leading to social upheavals. Though the UK is not going to dominate the emerging era, it could prove to be able to keep it governable.