GT Voice: Path of pragmatism UK’s only road to economic improvement
Published: Nov 14, 2023 10:36 PM
Illustration: Liu Rui/GT

Illustration: Liu Rui/GT

British Prime Minister Rishi Sunak named David Cameron, the former prime minister, as foreign secretary in a dramatic reshuffle on Monday.

Some observers believe that the unusual comeback of the former prime minister is because Sunak may need Cameron's rich experience on the international stage to help ease some of the diplomatic pressure, which unsurprisingly triggered media speculation about Britain's stance toward China.

It is no secret that Cameron once heralded a "golden era" in relations with China in 2015, which was a bright aspect of his foreign policy when he was prime minister back then. But it now becomes a reason for concern as the appointment has raised questions as to whether Cameron's past attitude toward China may be at odds with the current stance of the UK government, according to media reports.

Given the UK's current political climate of playing tough toward China, our only hope is that the rare appointment could awaken the remnants of pragmatism among some British people.

The core of the "golden era" refers to the pragmatic economic and trade cooperation between the two countries. This is in sharp contrast to the current political prejudice and negative perceptions displayed by some British politicians in economic and trade relations with China. For instance, China's Wingtech Technology said last week that it had agreed to sell British semiconductor fab Nexperia Newport to US chip company Vishay Intertechnology, following a UK government order to unload the facilities on security grounds, according to a Nikkei Asia report.

Yet, it is exactly in this environment of politics having the final say that Britain needs more than ever to find a way to return to the pragmatic path. Going in the opposite direction under political hype would mean huge losses of investment confidence and competitiveness, as well as the costs and challenges of more remediation.

The British economy is still facing serious challenges. Its GDP showed zero growth in the third quarter of this year, which was still considered good news as it at least managed to avoid the start of a recession, according to Reuters. With inflation at a level more than three times its 2 percent target, the British central bank kept interest rates at a 15-year high. 

It also faces trade challenges with the EU, its most important trading partner, when it comes to issues like taxes on electric vehicles between the EU and the UK to start from January 2024.

Perhaps it is in this context that some British media outlets reminisced about Cameron's efforts to pursue a friendly China policy, discussing the possibility of improved ties with China. Apparently, strengthening economic and trade connections with the Asia-Pacific region, especially with China, will help lift the UK economy out of its difficulties or alleviate its pressure to a certain extent. While external trade connections may not be the primary drivers for improving the British economy, they are part of the overall influencing factors. 

We're not saying that strengthening ties with the Chinese economy will address all the challenges faced by the UK economy, but doing so can at least exert an important positive impact.

The contradiction that Britain faces is that on the one hand, it has the objective need to take a pragmatic approach to promote economic and trade cooperation with China, which is in Britain's interests. But on the other hand, there is strong political pushback over such cooperation, due to so-called security concerns. In recent years, the UK government has repeatedly used so-called security issues to restrict the development of Chinese companies in the UK and deny opportunities for Chinese manufacturing. 

In addition to the case of forcing a Chinese company to sell semiconductor facilities to a US company, the UK also removed Chinese companies from the construction of its new Sizewell C power station. But letting geopolitical or ideological biases dictate the direction of economic cooperation is likely to turn the originally positive energy into a negative force for its own economy.

If the UK government wants to lift its economy out of the current predicament, it means all of its policies, domestic or foreign, cannot afford any mistake or get carried away by geopolitics again. The UK needs to identify the importance of pragmatism and make the move as quickly as possible.