Britain’s Golden Era With China Is Well and Truly Dead

Scott Singer and Sam Hogg

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Liz Truss’s tenure as Britain’s prime minister will usher in a transformative period for the country’s foreign policy. While Truss will likely continue many of her predecessor’s domestic policies, her administration’s foreign policy will represent a marked departure from the past: most notably, a final break with the idea of a so-called golden era with China.

Long gone are the days of exploring how Britain can develop stronger economic ties with China. Under former British Prime Minister Boris Johnson, a self-proclaimed Sinophile, the British government briefly saw China as a potential key partner that could replace the European Union and provide significant foreign investment in the post-Brexit era. But as Beijing cracked down on Hong Kong, causing a rupture with London, those hopes faded—and under Truss, they have been replaced with an explicit skepticism of Beijing. Truss has even explicitly declared that China represents a threat to the United Kingdom.

Truss, formerly Britain’s foreign secretary, spent the campaign trail painting herself as a disruptor prepared to break the mold on groupthink, especially in foreign policy. Her China stance is no exception. It has been formed over a number of years and across a selection of senior positions. But even though Truss is a China hawk, she believes Beijing is principally a geoeconomic rather than geopolitical threat. In her view, strengthening the economic heft and leverage of the G-7 and NATO should be the primary means of deterring Chinese aggression.

Truss will have to navigate a challenging domestic environment with spiraling inflation and a potentially devastating energy crisis, which may come into direct conflict with her China policy pledges. Yet it’s clear from her time as foreign secretary that she will be consistently tough on China—at least rhetorically—as she plans to counter Beijing’s superpower status.

Truss has picked a combination of long-standing allies and some of the Conservative Party’s loudest China critics for key posts. She’s tapped historian John Bew as her foreign affairs advisor and James Cleverly as her foreign secretary—both of whom generally share her worldview. She’s also picked Tom Tugendhat, founder of the influential Conservative Party’s China Research Group caucus, as her minister of state and Nusrat Ghani, a member of the Inter-Parliamentary Alliance on China, as business minister. Both Tugendhat and Ghani are China hawks and were among the five British members of Parliament sanctioned by China in 2021; the China-focused groups they represent have been arguably the most influential in the U.K.’s break from golden era policies. While Ghani and Tugendhat do not align with Truss on all China matters—and tend to promote more aggressive anti-China policies—their move into her government severely limits their ability to publicly disagree with any policy of hers.

With her team in place, a key part of Truss’s vision is to build a new world order with new and old partners—but without China. Over the past three years, Truss has been an ardent critic of China’s role in multilateral institutions. As international trade secretary, she criticized the World Trade Organization for being “too soft on China’s unfair trading practices for too long” and argued “democracies [need to work] together to make sure the global trading system is supporting democratic free enterprise.” She views Beijing’s growth and aggression as a direct challenge to liberal democracy and the post-World War II international order.

To this end, when she became foreign secretary, Truss set out her “network of liberty” strategy. This can best be summarized as the U.K. working with “like-minded partners” around the world to tackle the rise of authoritarianism and “malign influence,” with China squarely on the receiving end. It is, in essence, a tilt to a new British strategy—one that sees geopolitics as an economic problem.

Fundamentally, Truss views access to the global economy as being dependent on “playing by the rules.” She has spoken about “aggressors” using free trade “as a tool of foreign policy—using patronage, investment, and debt as a means to exert control and coerce,” and remains bullish on the prospects of using the G-7 to economically rein in China. Truss has also talked of using the G-7 and other partners to form an “economic NATO.” In her first major foreign-policy speech as prime minister, she said if “the economy of a partner is being targeted by an aggressive regime, we should act to support them.”

Britain’s relationship with Taiwan, meanwhile, will likely deepen. More than any other cabinet member under Johnson, Truss spoke about the need to defend Taiwan as a fellow democracy. Taiwan’s future, Truss believes, is a totem of the legitimacy of liberal democracy. Truss strongly condemned heightened Chinese activity in the Taiwan Strait after U.S. House Speaker Nancy Pelosi visited the island in August. Although Truss has backtracked on some of her comments on arming Taiwan under media scrutiny, her convictions will continue to influence her team’s strategy on the region.

It’s unlikely that the U.K.’s official policy of neither recognizing nor maintaining official diplomatic ties with Taiwan will change. The harder questions—for instance, if Britain would commit to sending troops or directly arming Taiwan in the event of a conflict—are likely to remain unanswered, at least in the initial months of her premiership. Yet Truss’s administration could take less flashy actions, such as supporting the island’s calls to take part in the World Health Organization or ramping up efforts to share technologies that help fight climate change. Domestically, the administration will likely push for Taiwan to provide an alternative space for critical language learning amid broader calls to ban Confucius Institutes, China’s state-run global language program. Already, parliamentarians are in talks to carry out a proposal to have Taiwan send Mandarin teachers to Britain.

The U.K.’s growing support for Taiwan follows as a natural extension to the country’s deep-rooted connection to Hong Kong’s democracy movement and its protesters, many of whom live in exile in London. Even before Truss took office, the city had become a symbol of London’s unhappiness with Beijing’s actions. Now, Truss may use Hong Kong to rally support for Britain’s defense of Taiwan.

Outside of diplomatic relationships, U.K. regulation of sensitive Chinese technology will also harden further under Truss. During the Johnson administration, the country saw a significant and protracted swing away from welcoming Chinese investment in sensitive sectors, such as artificial intelligence and energy—a trend that was driven by the Conservative backbench in Parliament and accelerated under Truss’s time as foreign secretary. A ban on Chinese telecommunications giant Huawei from the U.K.’s 5G network, which was announced in July 2020, set a mood in Parliament of deep skepticism toward Chinese technology. In January, the landmark National Security and Investment Act came into force, giving the government wide-ranging powers to intervene in foreign companies buying U.K. assets in 17 sensitive sectors; so far, most government interventions have been aimed at companies linked to China.

One of the first cases Truss will have to address is that of Newport Wafer Fab, a semiconductor factory in Wales acquired by a China-linked company. This deal is currently on pause since it is being evaluated by the government for national security risks; Jacob Rees-Mogg, the new business secretary, will have to decide whether to block it. But Newport Wafer Fab is only the tip of the iceberg when it comes to critical technology decisions the administration will face in its early days. Upcoming supply chain legislation will have a direct impact on video camera providers Hikvision and Dahua, both allegedly involved in crimes in Xinjiang—and only add to the long-standing headache caused by Huawei’s deep involvement in Britain’s own surveillance systems.

Truss will likely push hard to minimize the presence of Chinese companies operating in critical sectors and keep firms in key industries in the hands of British owners. She already pledged to “crack down” on Chinese social media app TikTok and its competitors during her campaign, arguing that the U.K. should “be limiting the amount of technology exports we do to authoritarian regimes.” Any punitive action will find strong support from politicians concerned about the flow of data from the U.K. to China.

Still, Truss will face challenges in implementing these policies. She may struggle to balance her commitment to upholding liberal democracy with the country’s economic reality: Hawkish China policies, such as economic decoupling, will hurt efforts to address more pressing domestic issues, such as curbing inflation, which may exceed 20 percent by the beginning of next year. Truss has already had to work to mitigate the effects of rising energy costs from the war in Ukraine by promising to freeze energy bills at an average of around $2,815 (2,500 pounds) per year. Reducing economic ties to China will only exacerbate cost-of-living issues for the average British consumer.

Beyond domestic pressures to curb inflation, Truss also faces significant internal—and increasingly public—disagreement within the Conservative Party on how much engagement with China is desirable. In shaping her government, Truss has only managed to nullify two previous challengers of her China policy by bringing Tugendhat and Ghani—members of two of the most influential backbench groups—into her inner circle. The Tory backbench is increasingly a hotbed of China-skeptic parliamentarians, each with a varying vision for how they want the U.K. to engage with Beijing.

The backbench will ultimately push Truss to move into more direct confrontation with China. The question is how quickly and how far. Will they push her to impose Xinjiang-targeted economic sanctions? Heighten military cooperation with Taiwan? Cut off diplomatic communication in a more permanent way? In the first geopolitical blip of Truss’s premiership, a handful of Conservative politicians sanctioned by Beijing complained about Chinese officials being invited to Queen Elizabeth II’s lying-in-state. Postponing future internal conflict will require Truss to confidently communicate her China vision in a way that speaks to the most confrontational—and influential—voices on the backbenches.

One marker of Truss’s ability to manage backbench dissent will be the extent to which she is able to convince the incoming chair of Britain’s Foreign Affairs Committee—the most influential foreign-affairs position in Parliament—that her government is fulfilling its foreign-policy vision. Six parliamentarians are asking other politicians to back their campaign for the role. Three—Iain Duncan Smith (a close ally of Truss), Liam Fox, and Henry Smith—are members of the Inter-Parliamentary Alliance on China, Alicia Kearns is the co-director of the China Research Group, Richard Graham chairs a cross-Parliament group that focuses on China, and John Baron previously served in Duncan Smith’s frontbench team. All have been critical of China, but each has a distinctive vision for how to manage the U.K.-China relationship. Their priorities vary from wanting to focus on human rights-led engagement on Xinjiang and Hong Kong to industrial policy reforms to helping defend Taiwan.

As Truss will soon learn, declaring China a threat and pledging change is one thing; implementing a strategic vision during times of intense economic stress and brewing backbench rebellion is another. And while managing complex relationships among Conservative colleagues with conflicting views will require a masterful political hand, managing an increasingly tenuous relationship with a global superpower will demand much more.