Danny Alexander's surprising second act — in Beijing
(Photo by David Wong/South China Morning Post via Getty Images)
Alex Woolfson recently wrote about China’s Ladakh incursion and how it gives us a taste of the new Cold War. If we are heading this way, the UK must start thinking about how we deal with Beijing.
For starters, we should be standing shoulder to shoulder with those in Hong Kong who are demonstrating against China’s heavy-handed new security law on the province. The law will undoubtedly curtail human rights, and will completely ignore the Sino-British Joint Declaration signed by Margret Thatcher in 1984. London should be threatening to drag Beijing through the international legal system. However, in an ironic post-Brexit twist, it is the European Union that’s threatening action if China breaks Mrs. Thatcher’s treaty. In the meantime, the UK sits on its hands.
Europe is not just leaving its defence of Hong Kong to the international legal system. On Monday the European Council President Charles Michel and European Commission head Ursula von der Leyen warned China there would be “very negative consequences” for trade agreements between China and the EU if Beijing imposes this law on Hong Kong.
There has been no such message from the British government, because of the clear power imbalance that exists — the UK represents about 2.2 per cent of global GDP, and China over 16 per cent. In addition, Britain has a £22.1 billion trade deficit with China. China’s influence is expanding into every corner of the UK, be it property investments in London, the Huawei 5G controversy, nuclear power projects and offers of help with HS2. Those tentacles are now starting to reach into the UK political and financial establishments.
Danny Alexander, the former Liberal Democrat MP and Chief Secretary to the Treasury, was one of the “Quad” — the four key ministers in the Coalition government from 2010 until he lost his seat in the 2015 General Election. Alexander has gone on to become “vice president and corporate secretary” at the Asian Infrastructure Investment Bank (AIIB), based in Beijing. He is effectively the Bank’s No2 man.
Alexander was always a fan of the AIIB. When he and George Osborne controlled the Treasury, the UK became the first western nation to sign up to the bank, a decision that caused tension with the Obama administration. The AIIB is the institution China uses to front the $4-8 trillion investment strategy, called the “Belt and Road” Initiative. This is a grand plan to build a single, united trade network covering over 70 countries, accounting for about 65 per cent of the world’s population and around one-third of the global Gross Domestic Product.
The reality is that the “Belt and Road” project is debt trap diplomacy — colonialism in disguise. Loans and deals made with other countries are hazy and complex, but loyalty to Beijing is demanded. Carmen Reinhart, chief economist at the World Bank, thinks 60 per cent of loans from China to developing countries are arranged through secret bilateral negotiations. Terms of loans give rights to China for mining, access to ports or other strategic necessities. If you are unsure of the political nature of the Belt and Road program, then consider its completion date of 2049: the 100-year anniversary of The Chinese Revolution. Danny Alexander finds himself the acceptable face of one of the biggest empire building projects in centuries.
The rot does not stop there: the Chinese have pulled in David Cameron. The most visible incarnation of the Belt and Road programme in Britain is the UK-China investment fund. This is a $1 billion London-based investment vehicle. It is essential for China to access global corporate investment so that the AIIB’s risk can be shared. No other financial hub could do this better than London, so Beijing hired David Cameron to lead the charge and become the face of the fund.
The UK, and specifically London is still one of the most trusted and successful finance hubs in the world. It follows that Beijing should recruit high profile political figures to create a legitimate face for its strategy of debt trap diplomacy. Alexander has ended up fronting sovereign spending and Cameron is the face of corporate investment for the Belt and Road Initiative.
For China, the UK is starting to become a sort of Italian restaurant used by the mafia to front operations and appropriate funds. If this continues, we could find the British lion roaring for China, not the West.
