Is Britain’s Theresa May reversing David Cameron’s China policy?

Prime Minister Therese May’s decision to delay final approval for a new nuclear power station partly funded by China at Hinkley Point may be an indication that she will soon be dismantling many of  Cameron government’s policy plans. Hinkley Point being China’s first nuclear power project in the West, Beijing will lose its face if it is canceled.

Under Prime Minister David Cameron, the United Kingdom eagerly sought to woo Beijing, pledging to open a “golden era” in UK-China relations, in which Britain would be the latter’s “best partner in the West.”

Therese May

Therese May

Yet, such a tilt toward the communist-ruled country is being apparently reversed by Therese May, his successor. Her unexpected decision to delay final approval for a new nuclear power station, a £18-billion project partly funded by China, at Hinkley Point in Somerset, can be an indication of this policy change.

Under the terms of the deal, the Hinkley Point C project, Britain’s first new nuclear power station in a generation, is mostly financed by France’s energy giant, Électricité de France (EDF). However, China’s companies, reportedly China General Nuclear Corporation (CGN) and China National Nuclear Corporation (CNNC), are to contribute a third of the money.

The project was announced during Chinese President Xi Jinping’s state visit to the UK last October.

In fact, the Hinkley Point deal was regarded as the centerpiece of that four-day visit, during which Xin Jinping was accorded every honor. It is also hailed as the flagship of a new era of stronger political and economic relations between the UK and China.

The architect behind the Hinkley Point initiative and the UK’s efforts to court a much closer relationship with Beijing in general was George Osborne, David Cameron’s closest ally and chancellor, who was sacked from government by May when she replaced Cameron on July 13.

In a speech made at the Shanghai Stock Exchange in September 2015, which formed what is known as the “Osborne Doctrine”, Osborne vowed to “make Britain China’s best partner in the West” and “create a golden decade for both … countries.”

After months of hesitance and calls by the Cameron-Osborne government to proceed with the project, last Thursday, July 28, EDF’s board voted to go ahead with it.

However, a few hours later, the British government announced it would delay its final decision on the project until the early autumn. Announcing the decision, Business and Energy Secretary Greg Clark said the government “will now consider carefully all the component parts of this project.”

The security concerns over China’s involvement in the project were seen as the primary reason why the final decision on the deal was postponed.

China’s poor rights record

The Hinkley Point C project is very controversial and a number of people in the UK opposed it right from the beginning due to China’s poor human-rights record, cyber-attacks and intellectual-property violations.

In her opinion piece in the Guardian on October 21, 2015, Polly Toynbee wrote the “nuclear power deal with China is one of the maddest ever struck.”

Yet, the most vocal critic of the project is probably Nick Timothy, a former chief of staff to May when she was Home Secretary and her current co-chief of staff.

Writing for the ConservativeHome website on October 20, when Xi began his UK visit, referring to the rhetoric of the Cameron-Osborne regime about the “golden decade” in Sino-British relations,  Timothy acknowledged that “there is gold in the relationship.”

But he asked, “what are the Chinese buying with their gold?” and answered, “the first thing on their shopping list is British silence on human rights abuses – and the Government has been only too happy to oblige.”

However, in his view, “human rights abuses are not the only concern about the British relationship with China”. What really worried him was that the Cameron government allowed “Chinese state-owned companies stakes in the British nuclear power stations”, including the Hinkley Point.

Echoing the argument made by security experts inside and outside the British government, he contended that “the Chinese could use their role to build weaknesses into computer systems, which will allow them to shut down Britain’s energy production at will.”

That is why he unequivocally maintained “no amount of trade and investment should justify allowing a hostile state easy access to the country’s critical national infrastructure.”

Given his past opposition to China’s involvement in the Hinkley Point C project and his current role as May’s co-chief of staff, Timothy is widely seen as the person behind the May government’s current apprehensions about the project.

Yet, while there is no doubt that his influence is significant, May is also not so keen on the scheme due to security concerns over China’s involvement.

Speaking to some of the UK’s main news outlets, e.g. BBC and the Telegraph, during the last few days, Sir Vince Cable, who was Business Secretary during the Conservative-Liberal Democrat coalition (2010-2015), said May, who was then Home Secretary, was not happy about the government’s “gung-ho” approach to Chinese investment and objected to China’s involvement in the Hinkley Point project.

That is why while it is not publicly given or confirmed, security concerns over Chinese ownership of British nuclear power stations were seen as the main reason May decided to delay the final decision on the deal.

Judging by their reactions and comments, most of the UK’s mainstream media have welcomed this move.

For instance, in its editorial on Sunday, July 31, though recognizing that “the delay was not without risks”, the Observer said “it was the right decision, in light of serious concerns about whether the project represents value for money and the security risks of depending on Chinese investment for a project so critical to long-term national security.”

Similarly, the Independent, another key British newspaper, maintained that the UK “should be cautious of Hinkley Point.”

In its leading article on July 31, it wrote: “China’s general outlook on the world is peaceful and friendly: but it is certainly jealous of its special position as an East Asian superpower, and the extravagant territorial claims it makes in the South China Sea are a direct challenge to her neighbors, and their ally, the United States.”

Moreover, while admitting that “as an international partner, China has few, if any, direct quarrels with Britain”, it argued “its emergence as a military as well as industrial force means that we should be cautious about the extent of our co-operation.”

The Guardian went further arguing that May and her ministers at the Department of Business and Energy “should use the prerogative of a new government” to stop it now because it is a “wrong project” with “wrong price.”

The end of the “Golden era”?

Though it remains to be seen whether May will approve the deal, there are other indications that she has reservations about not only the Hinkley Point project but also other schemes that the Cameron-Osborne regime wanted to cooperate with China.

During Xi’s visit to the UK, both sides expressed their “strong interest in cooperating on each other’s major initiatives, namely China’s “Belt and Road” initiative and the UK’s National Infrastructure Plan and the Northern PowerHouse.”

Yet, the future of the Northern Powerhouse strategy, a scheme aimed at re-balancing of the UK economy by pushing growth in the North of England, ardently advocated by Cameron and Osborne, is now in doubt.

For many observers, by sacking Osborne from government and dismantling many of the Cameron-Osborne government’s policy plans, May is pursuing an approach to China that contrasts with that of Cameron and Osborne.

Moreover, compared with Cameron and Osborne, who strongly focused on economic aspects – and virtually ignored  the human rights issue – in the UK’s relationship with China, May is more nuanced – if not, more principled – in her dealing with China-related issues.

In July 2015, when learning that the dissident Chinese artist Ai Weiwei had been granted only a 20-day visa to launch his exhibition in London, as Home Secretary, May ordered that he should be given a full six-month visa to visit Britain and sent him a written apology.

Taking all of these into account, there is a possibility that she may abandon the Hinkley Point project.

Should she decide to abort the scheme, this would have far-reaching implications for UK-China relations. It would mark the end of the “golden era” in their relationship that just started last year.

Such a move would be very bold and brave by the UK’s new government.

With the UK leaving the European Union, the world’s largest trading bloc, after the Brexit vote on June 23, it was widely thought that London would seek a closer relationship with China, the world’s emerging superpower and second largest economy.

Her decision to stop it would also indicate that she would not pursue strong commercial links with China at all costs.

For China, a cancelation would be a huge blow to its international prestige and ambitions. Hinkley Point is China’s first nuclear power project in the West.

Being allowed to design and build nuclear reactors in the UK would be a recognition that China is capable of producing advanced and sophisticated technologies in the field. That would serve as a springboard for Chinese companies to secure similar projects elsewhere.

Three weeks after the official announcement of the Hinkley Point nuclear power station, China and Argentina agreed on a £15-billion deal by which the former would finance and build two nuclear power stations in Argentina.

According to the Financial Times, the cancelation of the Hinkley Point project “would also be seen in China as a slap to Mr Xi himself”. This is not only because “CNNC is key to the military-industrial complex that forms part of his power base” but also because his “strategy of winning diplomatic friends around the world by building them large infrastructure projects would be affected.”

It is perhaps also because of such huge stakes, an opinion piece in Xinhua, China’s official press agency, on August 31, questioned the UK government’s postponement of approval for the Hinkley Point nuclear power plant.

It also warned that “by halting a flagship program indicating the arrival of the China-UK Golden Era … for suspicion towards Chinese investment, the British new government is actually running the risk of dampening the hard-won mutual trust with China.”

Xuan Loc Doan is a research fellow at the Global Policy Institute. He completed a PhD in International Relations at Aston University, UK, in 2013. His areas of interest and research include Vietnam’s domestic and foreign policy, ASEAN’s relations with major powers and international politics in the Asia-Pacific region.

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