A Tory Pressure Campaign Is Forcing Chinese Firms Out of Britain
(Bloomberg) -- U.S. sanctions against Huawei pushed Boris Johnson to consider banning the company from Britain’s 5G networks, but it was a group closer to home that finally drove him to act: his own Conservative party.
For the past six months, rank-and-file Tories have been plotting in private to block Huawei’s involvement in the U.K.’s fifth generation mobile systems. A number of China-skeptic groups have formed within the party, all trying to re-shape the government’s policy toward Beijing. Now these activists have another target in their sights -- China’s involvement in British nuclear power.
“We are winning the argument at the moment because China is making the case as eloquently as it could be that it is not to be trusted,” Conservative MP Damian Green, a former top Cabinet minister, said in an interview. “It’s bad diplomacy to think this wolf-warrior tough talk is going to work against Britain. It just doesn’t.”
The partnership between Johnson’s Britain, as it leaves the European Union, and President Xi Jinping’s China is in deep trouble. A string of flash-point issues have damaged relations this year, including China’s new security law for Hong Kong, its handling of the Covid-19 outbreak and now Britain’s crackdown on Huawei kit.
The risk for the U.K. is that it pays a price for squaring up to China at a time when it is looking for new alliances on trade and security as it seeks to create a new role for itself in the world after Brexit.
Yet even as Chinese officials threaten to unleash “consequences” against London, for many in Johnson’s Tory party the end of the “golden era” of collaboration with Beijng is long overdue.
Green, who was deputy to former premier Theresa May, is one of about 50 members of one new Tory association that has powerfully influenced Johnson’s government. Since it was formed 11 weeks ago, the China Research Group has never held a meeting in person because it was launched while the country was in full lockdown in late April.
But the group’s members coordinate their discussion via WhatsApp, and video calls, and even held an online seminar recently to discuss Hong Kong with Chris Patten, the last governor of the former British colony.
Unlike the pro-Brexit European Research Group, which was dominated by the most passionate euroskeptics in the party, the CRG includes many more moderate voices. And in part because the group is not wildly radical, Johnson’s government is listening.
“The CRG is genuinely influential in that it gives a sense of where the mainstream middle of the Conservative Party is,” says one minister, speaking on condition of anonymity. “Ambitious people have been persuaded this is not a group of head-bangers.”
The CRG is coordinated by Tom Tugendhat, who chairs Parliament’s foreign affairs committee. Among its members are aides to several Cabinet ministers including -- Alicia Kearns, who acts as the eyes and ears of Culture Secretary Oliver Dowden, who’s responsible for Huawei policy, and Claire Coutinho, parliamentary private secretary to finance minister Rishi Sunak.
In January, the prime minister gave Huawei the green light to have a limited role in fifth generation mobile networks, but this provoked a backlash from skeptical Tories that shocked his team. The strength of Conservative opposition to Huawei’s role in 5G networks helped persuade Johnson’s officials that he would be defeated next time if he did not change course.
Johnson’s team already knew they needed stronger links to the party’s members of Parliament. The premier himself has been unable to build up his personal support from colleagues due to the lockdown, with meetings which would once have been over a drink now restricted to video or phone calls.
On Tuesday, Dowden announced Huawei will be banned from selling new 5G equipment to U.K. phone companies from the end of this year, while all existing kit will need to be stripped out of these networks by 2027.
It was a spectacular change in direction which the government blamed on the new U.S. sanctions on the company. But it may still not be enough to satisfy some Tories, who are already warning they want Johnson to strip Huawei out of British 5G systems sooner.
The CRG is not the only China-skeptic grouping in operation. Conservative MP Bob Seely coordinated the initial Tory rebellion over Huawei and has his own alliance of colleagues dedicated to scrutinizing the company’s role in U.K. networks.
Iain Duncan Smith, a former Conservative leader, has set up the Inter-Parliamentary Alliance on China, which includes U.S. Senators Marco Rubio, a Republican, and Bob Mendendez, a Democrat, alongside representatives from other countries including Australia, Japan and Canada.
Duncan Smith’s aim is to have politicians from “both sides of the aisle” in every country and act in concert over areas of concern such as the treatment of Uighur Muslims and co-ordinating international condemnation and demands for sanctions against Hong Kong’s Chief Executive Carrie Lam.
With the first round of the Huawei fight won, skeptics in Johnson’s party are now turning their focus to other areas of Chinese involvement in Britain. Several of those involved said their next target will be nuclear power.
China General Nuclear Power Corp. (CGN) plans to build a new power plant in Bradwell, Essex, east of London. The project represents a showcase of China’s technical skill in Europe. It is designed differently to two plants in which the French energy firm EDF is taking the lead, and in which CGN is also invested.
“The Bradwell power station raises many concerns,” Tugendhat, who founded the CRG, said in an interview. “Economically it makes little sense to run two different designs, and with growing concern over Chinese control of critical national infrastructure, it’s hard to imagine it would get through Parliament.”
Johnson’s ministers are already working on tightening the rules on foreign investment in projects where national security is a concern. With plenty of interested friends in the party, they won’t be short of help.
©2020 Bloomberg L.P.