The British government’s decision on 14 July to ban the Chinese company Huawei from contributing to Britain’s 5G telecommunications network demonstrates the substance of post-Brexit sovereignty. The British government has succumbed to US bullying and must abide by decisions made in the US. Britain has been reduced ‘to a vassal of the US’, as China put it. TREVOR RAYNE reports.
British and US governments feign concern for democratic rights in Hong Kong and for the Uighur people in Xinjiang, North West China, but express no interest in the fates of the people of Kashmir in India or the Kurds in Turkey. They condemn China while oppressing black and ethnic minority people in their own countries. In the guise of protecting security and upholding values, British government policy is subordinated to the US strategy of conflict with China.
The ban on Huawei will delay the 5G network in Britain by two to three years and cost an estimated £2bn. BT says complying with the ban will cost it £500m and could result in signal loss. Britain has four main telecom network providers; they have until 2027 to remove all Huawei 5G technology. US officials are demanding speedier action and some Conservative Party MPs want older 2G, 3G and 4G Huawei equipment ripped out. Make no mistake: sections of the British ruling class relish joining the US in confronting China.
Following the ban, the Financial Times offered cautionary advice, ‘As the world fractures, and Britain charts its own course after Brexit, it would be damaging to be drawn into President Donald Trump’s new cold war with China. Realistic, constructive engagement with Beijing is the priority’ (15 July 2020). This is delusional; for over a decade we have argued and demonstrated that the British ruling class would be forced to make a difficult choice. The moment for that choice has been forced upon it. ‘As we have consistently pointed out, the parasitic character of British capitalism has made it increasingly incapable of withstanding the economic and political challenges of US or European imperialism as an independent global imperialist power. The Brexit conflict is essentially a dispute between sections of the ruling class over two necessarily, totally reactionary outcomes for British capitalism – staying as part of a European imperialist bloc or leaving and becoming an offshore centre for usury capital under the umbrella of US imperialism’ (‘Brexit: ruling class deadlock’, FRFI 268
February/March 2019).
Inter-imperialist rivalry
International capitalism has been cast into its greatest crisis since the Great Depression of the 1930s. The desperate search for adequate profits will intensify inter-imperialist rivalry. Analysing the First World War, Lenin said ‘World domination is… the substance of imperialist policy, of which imperialist war is the continuation.’ The US ruling class is determined to preserve its dominant global position. In 2017, the US designated China a ‘strategic competitor’, then launched a trade war with China in 2018. Critical to US ruling class decisions is its assessment of China’s technological progress. ‘Russian President Putin said of artificial intelligence (AI), “Whoever becomes leader in this sphere will become ruler of the world.” AI superiority by 2030 is China’s strategic goal. Around two thirds of global investment in AI now takes place in China’ (‘China: on top of the world’ FRFI 266 October/November 2018). In 1960, 69% of the world’s research and development (R&D) spending was undertaken by the US. Since 2000, US R&D spending has grown by 100%, while that of China has increased by 1,600%. Today, China’s total R&D matches that of the US. Technological developments have both economic and military impacts. Unable to make a product to compete with China’s the US resorts to excluding it on security grounds.
The US and British ban on Huawei could backfire; Ericcson of Sweden and the Finnish Nokia are the two main alternative 5G equipment suppliers, but both use components made in China. China could retaliate and ban exports to both firms. The US state will hope that the British government’s decision will influence Germany and France and other European countries that have still to make a final decision on Huawei. Poland’s Prime Minister called for ‘our European neighbours’ to follow the US line. However, China is Germany’s biggest market and German manufacturing companies do not want to be dragged into a trade war. Deutsche Bank estimates that a Sino-US-UK tech trade conflict will cost $3.5 trillion over the next five years.
In July, the US government threatened to impose sanctions on any firm helping Russia build Nord Stream 2, a gas pipeline from Russia to Germany and Central Europe, via the Baltic Sea. Funding for the pipeline comes from Gazprom (Russia), Shell (Anglo-Dutch), Uniper (Germany), Wintershall (Germany), OMV (Austria) and Engie (France). US Secretary of State Mike Pompeo said ‘It is a clear warning to companies that aiding and abetting Russia’s malign influence will not be tolerated. Get out now or risk the consequences.’ Banks that help the project could also face sanctions. Nord Stream 2 will also be on the table when Germany and France decide on their 5G networks.
US condemnations of China are growing in ferocity, and they are being repeated in Britain. President Trump continues to accuse China of spreading Covid-19. On 8 July, FBI Director Christopher Wray said, ‘China is engaged in a whole-of-state effort to become the world’s only superpower by any means necessary.’ He said that China was attacking the US on many fronts: ‘We’ve reached a point where the FBI is now opening a new China-related counterintelligence case every ten hours.’ Wray accused China of targeting critics and dissidents living abroad and of extraordinary rendition of political opponents. In a single week in June Twitter closed 23,750 accounts that it claimed were part of a coordinated propaganda campaign run by China. In an extraordinary threat, reminiscent of the McCarthy era, US attorney general William Barr cited the US 1938 Foreign Agents Registration Act, accusing Google, Microsoft, Yahoo and Apple of having ‘shown themselves all too willing to collaborate’ with the Chinese Communist Party and of having ‘allowed themselves to become pawns of Chinese influence’. He proceeded to denounce Hollywood for self-censoring content that might offend China and prevent film distribution there. Barr said that 80% of all economic espionage prosecutions and 60% of trade secret theft cases brought by the US Department of Justice related to China.
Predictably, Labour’s Shadow Foreign Secretary, Lisa Nandy, supported the government’s ‘welcome, long over-due step’ in banning Huawei and added her opposition to China’s involvement in Britain’s nuclear industry: ‘I don’t think we should be handing over large chunks of our infrastructure, especially our energy infrastructure, to a country that has behaved in such an aggressive way towards the UK and the people of Hong Kong in recent weeks.’
Pulling the plug
China’s ambassador to Britain Liu Xiaoming responded ominously to the British government’s ban on Huawei and offer of a possible path to citizenship for nearly three million Hong Kong residents: Britain ‘would have to bear the consequences’ if it treated China ‘as an enemy’. British companies and the City of London hoped to profit from China’s growth. Britain was the first G7 member to sign up to China’s Asian Infrastructure Investment Bank. In 2015, Conservative Chancellor George Osborne said, ‘No economy in the west is as open to Chinese investment as the UK.’ British exports to China tripled in the decade to 2018 and Britain received twice as much Chinese investment as the next European recipient, Germany. Along with Chinese investments in Britain’s nuclear power industry, the China National Offshore Oil Corporation is responsible for around a quarter of Britain’s North Sea oil production. Chinese companies own or part-own Heathrow airport, South Western Railway, Crossrail and black cab production. China has invested in or given loans to British Steel, Rio Tinto, Thames Water and Jaguar Land Rover. There were plans for China to invest £105bn in Britain’s infrastructure by 2025; these are evaporating. This May, Huawei announced plans to spend £1bn on a new research centre in Cambridgeshire. South Cambridgeshire council resisted US lobbying and voted for the project to go ahead; chances now look slim.
By 2017 China’s investment in Britain had reached a total of £88.4bn, while British investment in China was £103.1bn. Significant as these sums are, they are small compared to interlocking investments with the US. The stock of British investment in the US was £3,293.6bn, about a third of the total overseas investment stock. US investment in Britain was £3,263.4bn. The US invests more in Britain than in any other European country. These sums will have weighed heavily in the balance when the decision to ban Huawei was made.
There are numerous ways in which the Chinese government can inflict pain on the British government and economy. Over 120,000 Chinese students currently study at British universities, rising from 95,000 in 2018. According to one study, at least 16 British universities receive more than a fifth of their student income from Chinese students. Imperial College received 26% in 2018/19 and the Royal College of Arts 37%. Growing anti-Chinese sentiment, stirred by government ministers and others, will discourage Chinese students. Chinese millionaires have been granted Tier One Home Office residency visas in record numbers. The estate agent Knight Frank reckons that for properties costing £1m and over, buyers from mainland China have increased from 3% of international sales in 2013 to 13.4% in 2019. In 2019, the Office for National Statistics said that Chinese and Hong Kong buyers spent £7.69bn on London property. They own some 219,000 properties in London. There is many a plug to be pulled.
Military threats
It would be a mistake to view the US trade war, actions against Huawei and verbal condemnations of China as simply part of the US November presidential election campaign. Trump and the Republicans may seek to gain from gestures against China, but the Democrats and the US ruling class are in alliance in their determination to confront and curb China. Since the 2011 ‘pivot to Asia’, under President Obama and Hillary Clinton, the US has stationed 375,000 troops and 60% of its Navy ships in the Asia-Pacific region.
When there were confrontations between Indian and Chinese troops along a disputed border in May and June this year, the US Chief of Staff Mark Meadows said, ‘We’re not going to stand by and let China or anyone else take the reins in terms of being the most powerful, dominant force, whether it’s in that region or over here.’ On 13 July Pompeo said that China’s claims in the South China Sea ‘are completely unlawful, as is its bullying campaign to control them’. He added that the US would stand by its South East Asian allies and protect their rights, as a US warship sailed close to Chinese-controlled Spratly islands.
Speaking after Huawei’s eviction, the British Culture Secretary Oliver Dowden gave a reassurance: the government was seeking a ‘modern and mature relationship with China… where we’re able to speak frankly when we disagree but also seek to work side by side with China on issues where our interests converge’. This placatory ritual of British diplomacy will fool no one – least of all China. Coincidental with the government’s decision against Huawei The Times revealed that the new £3.1bn vessel HMS Queen Elizabeth will lead a carrier strike group to the South China Sea in early 2021. It will be accompanied by Royal Navy destroyers, frigates, nuclear submarines and combat aircraft, along with the US and Japanese fleets to counter ‘an increasingly assertive China’. The Sun repeated the story, adding that Australia and Canada ‘could be invited to provide escort warships or submarines to support the flotilla’ to confront China’s ‘emerging threat’. No one seems to have told the Admiralty that the days of Empire, of Victoria and of Viscount Palmerston sailing the Royal Navy up the Yangtze River are long gone – and will not return.
FIGHT RACISM! FIGHT IMPERIALISM! 277 August/September 2020
