In the following article, which was originally published in the Morning Star, our co-editor Keith Bennett assesses the recent China visit by UK Chancellor Rachel Reeves, the highest profile British visit to the country since Theresa May visited as Prime Minister in January-February 2018.
Keith notes that the visit, “restarted the Economic and Financial Dialogue (EFD) between the two countries, delivered limited but definite gains for the British economy, and was mired in domestic political controversy.”
Outlining the hesitant and partial nature of the Labour government’s re-engagement with China, and the backlash that even such tentative moves have engendered, he concludes:
The moves by the Labour government to reengage positively with China, limited and partial as they are, need to be welcomed. But the labour and trade union movement should press for them to go much further if Britain is to secure the jobs and investment we need and if we are to work constructively to tackle global challenges. This, in turn, will require standing up to the most reactionary sections of the ruling class and doubtless also to the incoming Trump administration across the Atlantic.
Chancellor Rachel Reeves returned to London on Monday January 13, following a three-day visit to China that took her to Beijing and Shanghai.
This first visit by a British Chancellor to the Asian economic giant in more than five years restarted the Economic and Financial Dialogue (EFD) between the two countries, delivered limited but definite gains for the British economy, and was mired in domestic political controversy.
In protocol terms, the high point of Reeves’s visit was her meeting with Chinese Vice-President Han Zheng.
According to the Xinhua News Agency, Han said that China and Britain are both major economies and financial heavyweights in the world, adding that strengthening economic and financial co-operation in the spirit of strategic partnership is of great significance to promoting economic growth, improving people’s lives and encouraging green development in the two countries.
China, he added, is willing to continue to expand openness and exchanges with Britain, enhance mutual understanding and trust, and deepen mutually beneficial co-operation to bring more benefits to the two countries and the world.
The news agency quoted Reeves as replying that the British side attaches importance to developing relations with China and is willing to strengthen candid dialogue and mutually beneficial co-operation to promote the economic development of each country.
The Economic and Financial Dialogue was co-chaired by Reeves and Vice-Premier He Lifeng. According to the British side, the total value of what was agreed is worth £600 million over the next five years for the British economy.
A briefing paper released by HM Treasury added: “Overall, this government’s re-engagement with China already sets us on course to deliver up to £1 billion of value for the UK economy.”
However, details of how the latter figure, in particular, was arrived at remain scant to non-existent.
Regarding the former figure, a Treasury factsheet drew particular attention to financial services, asserting that financial markets play an important role “in tackling shared global issues — whether climate change, biodiversity loss or ageing populations — and in delivering growth and prosperity” and welcoming China’s decision to grant new commercial licences and quota allocations for British firms, its commitment to issuing an inaugural offshore sovereign green bond in Britain in 2025, and Bank of China London branch’s intention to issue new dual currency sustainability related bonds in Britain in 2025.
Other agreements were announced on trade, investment and agriculture, and: “The UK and China agreed to further climate and energy co-operation, including strengthening the existing UK-China clean energy partnership, pursuing co-operation on climate, for example via a new MoU [memorandum of understanding] and a climate dialogue, and the UK-China environmental dialogue committed to at the Convention on Biological Diversity in 2024.”
Reeves said: “The agreements we’ve reached show that pragmatic co-operation between the world’s largest economies can help us boost economic growth for the benefit of working people — a priority of our Plan for Change. More widely, today is a platform for respectful and consistent future relations with China.”
HSBC Group chairman Sir Mark Tucker, who led the business delegation accompanying the Chancellor, pertinently added: “China is the world’s second-largest economy, the world’s top goods exporter, second-largest source of merchandise imports and the UK’s fourth-largest trading partner. Deepening the UK-China partnership on trade, investment, finance, health, education and climate change amongst other priority areas, is vital to delivering growth, investment and high-quality jobs for both China and the UK.”
Reeves’s China trip took place against the backdrop of a litany of bad news for the British economy — a bond sell-off just before she departed for Beijing pushed the 30-year yield to its highest level since 1998.
This bad news further fuelled calls from the Conservative and Liberal Democratic parties, as well as some Labour MPs, for the trip to be cancelled, with the Tories ridiculously accusing the Chancellor of “fleeing” to China.
Writing in the Times on January 11, Reeves mounted a robust defence of her trip and the government’s decision to re-engage with China: “This government is intent on creating growth that raises the living standards of working people across Britain by putting money in their pockets, creating wealth and opportunity, and delivering well-funded public services … We cannot ignore the fact that China is the second-largest economy worldwide and our fourth-largest trading partner, with exports supporting close to half a million jobs in the UK.
“British culture in China — film, fashion, music and sport — has a foothold in supporting the UK economy and our reputation. China’s economy is expected to provide the largest driver of global growth this decade, from which there are significant opportunities that can benefit Britain.
“Choosing not to engage with China is therefore no choice at all.”
However, here and elsewhere, any positive statements made by the Chancellor were marred by a repetition of the tired old mantra of seeking a relationship, “that recognises the importance of co-operation in addressing the global issues we face, competing where our interests differ and challenging robustly where we must.”
In line with this, all official British reporting of the visit maligned China and sought to interfere in its internal affairs on a range of issues, including Hong Kong, Xinjiang and Ukraine, and repeated wild accusations regarding supposed forced labour, cyber activity and political interference.
Such imperial arrogance and hubris, which massively overemphasises Britain’s real standing and weight in the world, and its importance to China, clearly acts as a real impediment to Britain securing the level of investment, market access and trade with China that is desperately needed. The much-touted £600m over five years is welcome but relatively trivial when set against the actual needs of the British economy and the potential for further co-operation.
Trying to walk the tightrope of co-operation and confrontation, Reeves wrote in the Times: “Our intelligence services work around the clock to protect the UK from hostile activity.”
Whether it ever occurs to her that, as in the past, no matter how right-wing and craven it might be, there may always be some elements in the intelligence services working around the clock to destabilise a Labour government, we cannot know. But as Trotsky reputedly observed: “You may not be interested in the class struggle, but the class struggle is interested in you.”
One can only hope that Reeves found time to glance again at the Times on the day she returned from Beijing.
Right on cue, the paper wheeled out former head of MI6 Sir Richard Dearlove to warn “against relying on China for Britain’s energy infrastructure. He claimed Ed Miliband, the energy secretary, would ignore advice from the security services in favour of an ‘ideologically driven’ push to reach net zero.”
Dearlove, an inveterate cold warrior who provides regular click-bait and rent-a-quote for the right-wing media, played a major role in the campaign to undermine Jeremy Corbyn when he was leader of the Labour Party, including promoting the preposterous allegation that he had been a spy for the former socialist Czechoslovakia.
Reeves herself was also, of course, a prominent anti-Corbyn warrior. As the old saying goes, what goes around comes around.
According to the Times, Dearlove said “that it was a ‘strategic issue’ to ask Chinese companies to ‘help us build a highly disordered energy system.’ He said that China had the ability to ‘reprogram’ any components connected to the energy grid ‘without our control.’
“He added: ‘I’m sure the Chinese are absolutely delighted to contribute to the weakening of our industrial base. We’re rushing to create a zero-carbon economy dependent on renewables which will eventually weaken our economic position.’
“Miliband’s position is ‘ideologically driven,’ Dearlove said. ‘The intelligence agencies can advise on insecurity in relation to policies, but it looks to me in this particular case like Ed Miliband would completely disregard and overrule that’.”
Consider yourself warned, Ed.
2024 was the world’s hottest year on record and the first calendar year in which global temperatures exceeded 1.5°C above their pre-industrial levels. Wildfires are currently devastating Los Angeles.
But for cold warriors like Dearlove, antipathy — of a completely “non-ideological” nature, he would presumably have us believe — to China trumps even the long-term survival of humanity.
The moves by the Labour government to re-engage positively with China, limited and partial as they are, need to be welcomed. But the labour and trade union movement should press for them to go much further if Britain is to secure the jobs and investment we need and if we are to work constructively to tackle global challenges.
This, in turn, will require standing up to the most reactionary sections of the ruling class and doubtless also to the incoming Trump administration across the Atlantic.
