The China Challenge

Abstract

Abstract The balance between national security and economic interests at play in the United Kingdom’s ‘China policy’ has significantly evolved in the post-Cold War era. As the first recipient of Chinese foreign direct investments (FDIs) in Europe but also a close ally of the United States, the United Kingdom has faced difficult trade-offs in formulating its policy towards the People’s Republic of China (PRC). This chapter investigates how London has responded to China’s growing foothold in the United Kingdom through increased FDIs and the supply of advanced telecoms equipment for the digital infrastructure. It will be shown that Chinese inroads into these strategic sectors in the 2010s—and British policymakers’ perception thereof—have been a key driver of change in the United Kingdom’s ‘China policy’. In particular, heightened threat perceptions, coupled with increasingly competitive economic relations with the PRC, have caused the United Kingdom to recalibrate the national security and economic interests at stake in its ‘China policy’ and to harden its stance towards Beijing. To corroborate this argument, the first two sections examine two key drivers of the United Kingdom’s ‘China policy’, namely the shifting British economic interests with China—including the Chinese economic imprint in the national infrastructure and in the telecoms sector—and London’s threat assessment of the PRC. The subsequent two sections show how changing economic interests and threat perceptions have, in turn, caused the United Kingdom to recalibrate its policy goals and to strengthen the policy instruments leveraged to achieve such goals. The chapter also discusses the consequences of Brexit for the United Kingdom’s ‘China policy’ and for its cooperation with other European powers.