US allies mull combined pushback to China bullying

Via Bloomie:

The U.K. is considering a ban on the installation of Huawei Technologies Co. 5G equipment as soon as next year to appease lawmakers pushing for tighter restrictions on the Chinese telecom equipment maker, according to people familiar with the matter.

Lawmakers from Prime Minister Boris Johnson’s Conservative Party are demanding stricter rules on companies using Huawei 5G gear, as part of the price for backing telecommunications security legislation due in parliament next week. Before now, lawmakers had left it to telecom firms to replace Huawei’s 5G equipment before a blanket ban is set to be enforced in 2027.

Via The Times:

Britain will lose billions of pounds of investment and thousands of jobs unless it reverses its hostility to China, an influential lobby group for Chinese businesses has warned.

In the most stark public intervention yet, the China Chamber of Commerce in the UK — which represents companies including Huawei, ZTE and Air China — said there could also be a consumer backlash against British companies such as Jaguar Land Rover and Burberry, which are heavily reliant on China’s middle-class customers.

Relations between China and the UK are at their lowest ebb in decades, hit by Beijing’s power grab in Hong Kong and Donald Trump’s trade war with President Xi Jinping.

Wenjian Fang, chairman of the China Chamber of Commerce in the UK, the voice of about 300 Chinese businesses, said “the UK will suffer” if the government was not “rational”. “If you continue to bar Chinese companies, the UK itself will suffer from lack of support or co-operation from China. Chinese investor confidence will be heavily impacted … when the UK needs investment so much at this time.”

…Fang, who runs state-owned Bank of China in the UK, said the government’s green plans were at stake. China General Nuclear (CGN) is funding Hinkley Point C nuclear power plant in Somerset, alongside EDF of France, and wants to build its own reactors at Bradwell-on-Sea, Essex. Fang said CGN directors “have concern that they will be discriminated [against] by this security bill”.

“They are prepared to make further big, substantial investment in the UK, but they are now waiting to see what decision the UK government is going to make,” he said. “Why do you close the door and send them away? OK, go and find another partner. The plan to reduce emissions will be heavily impacted.”

Firms that rely on exports to China could also be hit, Fang warned: “If the UK continues to be hostile to China, to Chinese companies and goods, what will the public reaction in China be? The public will say, ‘OK, if you don’t buy from us, why should we buy from you?’ We have seen such things happen before.”

In April, Sino-sceptic MPs set up a campaign group to debate policy on China. Conservative MP Tom Tugendhat, who heads the China Research Group, said: “It’s quite clear now that economic levers are used to silence opposition and shape foreign policy. International co-operation is important, but the idea China is the only country with money is not true.”

We have entered the era of wolf warrior diplomacy armed with economic boycotts. This applies to every country. Not just Australia.

Hence this, at The Australian:

Senior Trump administration officials say they are pushing for new hard-line measures against Beijing, even as President Trump winds down his final two months in office.

The most ambitious effort would create an informal alliance of Western nations to jointly retaliate when China uses its trading power to coerce countries, administration officials say. They say the plan was sparked by Chinese economic pressure on Australia after that country called for an investigation into the origins of the COVID-19 pandemic.

“China is trying to beat countries into submission by egregious economic coercion,” said one senior official. “The West needs to create a system of absorbing collectively the economic punishment from China’s coercive diplomacy and offset the cost.”

Under the joint retaliation plan, when China boycotts imports, allied nations would agree to purchase the goods or provide compensation. Alternatively, the group could jointly agree to assess tariffs on China for the lost trade.

The administration is also looking to broaden its ban on imports from China’s Xinjiang region that are made with forced labour, and add companies to a Commerce Department blacklist, including Chinese chip maker Semiconductor Manufacturing International Corp. SMIC already faces tough licensing requirements when buying from US firms.

The Chinese embassy in Washington didn’t respond to a request for comment. The senior officials acknowledged that the new measures face the hurdle of a waning Trump administration. Should they succeed, they would also need the incoming Biden administration to endorse the effort and carry it forward.

It is also far from certain that other nations, dependent on China trade, would want to join a group aimed at hobbling Beijing — or one that might rely on tariffs, which hurt domestic consumers. The officials said they were contacting Western democracies, but didn’t say which ones.

Whether this gets up or not is not the point. This kind of multilateral response is inevitable because the rise of “Xi Jinping thought” into economic relations means all will be hit sooner or later.

As this realisation dawns, a common response to a common enemy is inevitable.

David Llewellyn-Smith
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Comments

    • Will it last though. There are a lot of people saying Biden will be cozying up to China very soon in his term. If he does, everyone else will follow and it will be back to business as usual.

      • Can’t see it. China have shown weakness now, so there’s no reason for the US to kowtow to them and every reason not to.

      • I feel like I would have seen CCP relax a bit and bide their time till Feb if that was the case.. I dont see why they are still expending the energy if it is all going to be smoothed over by Biden shortly.

  1. said “the UK will suffer” if the government was not “rational”

    They are being rational.

  2. adelaide_economistMEMBER

    Incredible that all these investments are supposedly reliant on Chinese ‘funding’. Maybe pre-covid19. We are now so far into ‘deficits don’t matter’ practice that it seems ridiculous to care about any foreign investment which is now basically all downside and no upside when it comes to China. Unless they are transferring actual technology which can’t be replaced or doesn’t have an alternative then it’s best it doesn’t happen. Pretty certain I wouldn’t want a CCP-run company having anything to do with nuclear reactors in my country under any circumstances.

    • Don’t upset us or you get a meltdown!!
      The UK should fund these productive assets directly, no questions asked, they will pay for themselves. NO way they should be giving Chinese or other hostile countries contracts just as they offer a cheaper price (which comes with foreign debt & foreign workers etc while home grown companies loose out and eventually go bankrupt just as has happened with manufacturing)

  3. Why are we waiting. Put tarrifs on everything we get and send to this foul country. Ban all students now and deport those that are here. What are we waiting for !!!!

    • Don’t be so sure, the UK don’t have strong leadership as it once did, relativism reigns supreme. The whole point of 2027 was to appease Trump, but far enough away so they didn’t have to do anything.

      For example, HSBC is woke in every sense of the word, and their adverts are edgy to mildly offensive to some. So much so, the “we are not an island” campaign against Brexit and the amount of money they threw at the Remain cause was astronomical, despite having virtually no business on Continental Europe. And was absolutely denigrating toward their customers who did vote Brexit as being “ignorant” and uneducated”.

      Better still, when it came to Hong Kong, it sided against the democratic protesters and with the Chinese government. Business interests and all that. Woke is not democratic.

      Just remember, left leaning woke corporates are the epitome of elitism. A friend of mine is now very high up in a very large Australian corporate, espouses things publicly in the name of her corporate that have absolutely nothing to do with her job title, but must have support from higher levels to do so. I have no doubt that if you said the opposite, you would get fired.

      The world is increasingly asymmetric. One dares not say what they genuinely believe, because the consequences are very real. Personally and professionally.

  4. China can f off. They showed their hand too early and have now lost the international game of thrones. Enjoy the middle income trap and aging demographic.

    • Met him once, the most arrogant pompous ass…

      He thinks he’s really bright, but actually what he says is very very ordinary. There’s no insight.

  5. They’re attempting to use the same carrot and stick approach on Western countries they use to bully and cajole East Asian and Frontier countries.

    Problem is, we’re onto their game now. We understand how they are attempting to manipulate us and it won’t work.

    They’ll create a nightmare for themselves where they’re encircled by a containment treaty on the military front, checks and balances on the economic front and isolated diplomatically.

    Serves them right…

  6. I’m afraid to say chaps but corruption undermines every single argument you put forward regarding any possible avoiding subjugation by the CCP.

    You really think the DNC wants to go to war with the cash cow ?