Although Liz Truss has largely succeeded in outflanking her rival Rishi Surnak to the right[1] on economic policy, by contrast on social issues[2] and foreign policy Surnak and Truss have played a game of right-wing leapfrog, each dragging the other successively toward more hard-line positions.
When Rishi Surnak accused Truss’ Foreign Office of being soft on China and said he would close the Confucius Institutes (CIs)—China’s version of the British Council, concentrating on teaching Mandarin and promoting Chinese culture— Liz Truss claimed that Sunak was recently reportedly eager to relaunch the UK-China Economic and Financial Dialogue last held in 2019.
The anti-Chinese Cold War was given an enormous boost by Donald Trump, and this is something that Joe Biden has been unwilling to reverse, for fear of allowing a Republican Party campaign accusing him of being soft on China. The Anti-China cold war revolves around the idea that China is a ‘threat’ to Western interests. Investigate this more closely and you soon find out that this means most centrally that China might overtake America economically, that its military power is growing and that China is being more assertive politically and diplomatically.
These worries are fuelled by the targets set by China’s President Xi Jinping. The anti-China cold war is being promoted by Western right wing politicians as well as those connected to arms companies and the military. On the Chinese side, nationalism is being stoked in preparation for the Communist Party Congress in November, where Xi will get an unprecedent third term.
A year ago, mainstream US commentators could write with confidence that the US and China were headed for a period of ‘competitive interdependence’, because the two economies were so dependent on one another that war or any kind of military clash was inconceivable. Now things have changed, mainly as a result of the Ukraine war, with right wingers suggesting—absurdly—that China seeks to invade Taiwan. The idea of a short-term military clash was rebutted by General David Petraeus, former head of the CIA and commander of US forces in Afghanistan, but the mood music is changing. China and the US are swapping sanctions, and there is a good chance that the American President who is elected next year will either be Donald Trump or someone who follows closely in his nationalistic anti-China footsteps. This points to an obvious fact today in world politics, that the interests of the globalised big corporations are clashing with anti-globalisation extreme rightwing politicians, forces on the scaled of creeping fascism, some of whom have a good chance of being in power in the United States and Europe soon.
Cold war nationalism serves the interests of the political extreme right, but there will be many in large corporations who think that China’s manufacturing capacity, based on low wages, is essential to their interests. The main hi tech companies, like Apple and Microsoft, absolutely depend on China to manufacture hardware essential to their profits, but are scared of being further dragged into party politics.
On July 6, there was an extraordinary briefing in London by the heads of the FBI and MI5, aimed at business people and academics, to warn of the dangers posed by doing business with China. Paradoxically, MI5 director general Ken McCallum sounded a more cautious note than either of the Tory candidates, saying that:
…the aim here is not to cut off from China – one fifth of humanity, with immense talent. China is central to global issues: economic growth, public health, climate change. Having, for example, almost 150,000 Chinese students in the UK’s universities is, in almost all cases, good for them and good for us. The UK wants to engage with China wherever it’s consistent with our national security and our values. There are situations where the risks are sharper…”[3]
Despite this measured approach, according to the CBI, thousands of British firms are ‘racing’ to cut links with Chinese companies. This is hardly surprising. Companies are going to pick up on the warnings, not the measured qualifications, and decide not to take the risk; the risk of course is that of losing their money, or worse if they invertedly find themselves on a US sanctions list some months or years down the line.
Many British and American companies have taken a hard knock in being forced by sanctions to pull out of Russia. These include every bank, hi-tech, internet platform, retail, food and energy company you can think of. Many will have been reluctant to lose this market, but politically they have been unable to resist leaving once the weight of public opinion and government diktats forced their hand. The sanctions against Russia have done major damage to the world economy, although because of its huge size, the US has coped better. A major disruption of trade and investment with China would plunge the world into a catastrophic depression.
Gavin Bade writing at Politico details how corporate America is fighting back against cold war rhetoric:
Groups representing hundreds of the biggest U.S. companies, from Amazon to JPMorgan Chase and Nike, have so far gotten lawmakers to kill legislation that would mandate government reviews for American investments in China, weaken anti-Beijing rhetoric in an evolving House legislative package, and insert corporate-friendly provisions to an anti-forced labor bill that would reshape how the federal government implements trade restrictions.
But none of those bills have been finalized, and big business groups are worried that they won’t be able to rely on their traditional allies once the fall legislative session begins.
This astute assessment of the difficulties for American big business of a serious disruption of US-China economic relations demonstrates that more globalised sections of the ruling class may not be able to call the shots. Politics decides and in times of crisis the immediate interests of big business might be overridden by radical governments—of the left or right. While in office, Donald Trump threatened, but never implemented, an across-the-board 45 per cent tariff on all Chinese goods going into America. In the United States tariffs can be dressed up as sanctions, and therefore become standards that the United States expects every other country to follow, or become the victim of sanctions itself. In the early 1990s, when the French Ricard drinks company planned a project with Cuba for a worldwide marketing of Havana rum, the executives of that company were threatened with arrest if they entered the United States. So companies that trade with the United States will be very worried about further deepening any involvement with China.
David Petraeus on Channel 4 News scoffed at the danger of any immediate military clash, and claimed China’s recent military manoeuvres around Taiwan were mainly symbolic. As evidence of China’s reluctance to ever take on the United States militarily, he pointed to the immense US military effort in Ukraine, arming the Ukrainian resistance with for example 400,000 rounds of long-range artillery ammunition, 13 thousand 5-ton truckloads. The United States has moved into position B-52 bombers in Britain and sent several nuclear submarines to Holy Loch in Scotland, both the above armed with nuclear missiles. They are not there for fun.
The China cold warriors use a series of arguments. First, China is engaged in economic espionage; second it is guilty of major human rights abuses and is undemocratic; third is a general security risk, potentially using its high tech to spy on the West.
The first is true, but than all major powers attempt to spy on their rivals’ technological advances. It is true that China is undemocratic and is engaged in cultural genocide against the Uighurs, suppressed democracy in Hong Kong, and in general is an undemocratic, dictatorial state with blanket surveillance of its citizens. But the anti-China cold war is not about that, and obviously the United States and its Western allies have no real interest in fighting for democracy, in China or anywhere else. Third, the country with the highest capabilities of domestic and international surveillance is not China, but the United States.
The attack on Huawei, the world’s largest provider of telecoms equipment which had been slated to provide the core of Britain’s 5G network, was not mainly about fears of Huawei’s ability to spy on other countries, but mainly about them zooming past the United States in 5G and hi-tech more generally. When economic competition couldn’t derail Huawei, sanctions were introduced to try to hobble it. When in 2019 the US threatened to sanction all companies providing components to Huawei, Boris’ Johnson’s government used these sanctions to argue that it was compelled to remove Huawei 5G equipment already installed. Sanctions, here as elsewhere, are a major weapon of US foreign policy. There are 8,000 individual sanctions measures affecting 39 countries. These 39 countries do not include egregious violators of human rights like Saudi Arabia and Egypt, but do include Venezuela and the Palestinian territories.
Rishi Surnak attempted to outflank Liz Truss by promising to close down the Confucius Institutes, the Chinese language and culture centres mainly linked to universities. Doubtless these Institutes are used to popularise China politically, but then so are the language and culture Institutes of all major countries; Britain has one of the most extensive such networks, the British council, that has centres in 100 countries and international collaborators in 100 more.
In Parliament, the campaign against the Confucius Institutes is promoted by the China Research Group of Tory MPs (CRG), whose leading spokespeople include Tom Tugendhat and Ian Duncan Smith. Already an amendment from the CRG to the Universities Free Speech (sic) Bill has been passed, which will lay down a series of critic the CIs will have to meet in order to continue functioning. In fact there is no great mystery about this: the CIs are funded by the Chinese state, full stop. And there is nothing sinister about that.
There are around 140,000 Chinese students in Britain, a major source of income for universities. If the anti-China rhetoric heads into full-scale Cold War, there is a danger that student exchanges between the two countries will be stopped or substantially reduced.
Finally, there are about 435,000 people pf Chinese descent in Britain. In the event of an escalation of the anti-China Cold War, there is a grave danger that this community and the businesses they run would be targeted.[4]
Rishi Surnak and Liz Truss have only traded views on China as a means of outflanking each other. But what they have in mind is symptomatic of the kind of government either of them would lead—very right wing and subservient to American foreign policy.
[1] Truss has rule out financial help (‘handouts’) to the poorest sections of society who risk destitution as energy bills rocket in the coming autumn and winter. At the time of writing, Rishi Surnak has not made such a statement, indeed he hans criticised Liz Truss for her position. Surnak has the samne position as the CBI—mass poverty is bad for business. The Conservatives hard-core base in the petty bourgeoisie, especially in the South East wants Liz Truss’s position—tax cuts now, not extra social security and pensions help. Both candidates of course follow the same basic position on the economy, namely that only the market, p;articularly economic expansnion can helpo the poorest in society in the long term. Labour leader Keir Starmer has failed to differentiate himself on this from the Tory candidastes.
[2] Both have lasiunched attacks on ‘woke’ culture, ie any position that advances the position of ethnic, gender and racial minoriies.
[3] https://www.mi5.gov.uk/news/speech-by-mi5-and-fbi
[4] There are also some 400,00 people of south east Asian descent and 64,000 Japanese people living in Britain who doubtless could also be targeted.
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