The UK is China’s new bezzie pal… or is that the other way around? What do we need from China and what do they want in return? Time for some explaining;
This year the UK government signed up for the Asian Infrastructure Investment Bank (AIIB).
This is a proposed investment bank which will focus on developing infrastructure in Asia. Think: roads, railways, airports.
The UK was the first non-Asian country to join the AIIB, followed rapidly by other European countries.
By backing the bank, we won a place in China’s good books.
Now the Chinese President Xi Jinping makes the first state visit to the UK in 10 years. Our prime minister David Cameron says the UK can be “China’s best partner in the west”.
So why are we suddenly being all friendly?
China has the second largest economy in the world, after the USA. Unlike Western countries, China’s economy is growing fast. For the past few years China’s economy has grown at a rate of 10% per year. Compare that to the UK’s economy, which is growing at around 0.7% per year.
Academic Martin Jacques mentions that the last time a Chinese President visited the UK, our economy was bigger than China’s. So there. Now the tables have turned, and some predict China will be bigger than the USA in a few years. So it makes sense for us to cosy up to the world’s new superpower.
Put simply: China’s economic worth is going up and the UK wants in.
The UK wants a slice of the Chinese pie as China’s wealth means it can invest in UK projects. China is interested in backing investing in UK nuclear power, the high-speed HS2 railway and the “Northern Powerhouse”.
FYI the Northern Powerhouse is the Conservatives’ idea to invest in the north of England to boost the economy of the area, focusing on the cities of Manchester, Liverpool, Leeds and Sheffield.
Ummm, not exactly.
Some economists were skeptical when the government started schmoozing China. You see, although China’s economy is still growing, it’s growth rate is slowing down. We explained it for you in a neat video;
This year China’s growth rate slowed to around 6.8%. The Chinese Stock Market suffered some major drops in value. All signs that the country’s economic model may not work in the long-term.
In simple English: China’s economy might be in trouble; UK investment might be a bit of a gamble.
Part of the reason the Chinese economy was doing so well in recent years is because it exports products to other countries.
The downside is that these cheap exports are threatening British jobs. As the Chinese President arrived the Tata Steel company announced that 1,200 UK jobs will be cut in Scotland and the North.
They blame cheap Chinese exports for lowering the price of steel. So much for the Northern powerhouse.
Joining the Asian Investment Bank didn’t do much for UK relations with the USA. The Americans see the new bank as a threat to the International Monetary Fund (IMF), the international organisation set up to ensure the stability of the world’s economy. They also aren’t happy about the Chinese building massive sea bases in the South China Sea.
The Communist Party is China’s single political party and asserts strong control over its people.
Officially the country’s constitution allows freedom of speech, however the government uses media regulations to censor what information is released.
Anti-government bloggers and activists are often jailed and prisoners are reportedly beaten and electrocuted. China has the death penalty and last year China handed out the highest number of death sentences in the world.
Earlier this year students in the Chinese territory of Hong Kong protested against the Chinese government, claiming that new rules made it easy for the Communist party to screen out candidates they don’t approve of.
In the UK protests over human rights abuses are expected throughout President Xi’s visit. Labour leader Jeremy Corbyn was warned by the Chinese ambassador not to make a fuss about China’s human rights.
However, it’s worth saying that life in China today is a whole lot better than it once was. Martin Jacques notes that the country has lifted 600 million people out of poverty, “arguably the single biggest global contribution to human rights over the last three decades.” Fair enough.
The Chinese Ambassador to the UK acknowledges that “China and the UK differ very much because we have different history, different culture, we are in different stage of development”.
He added “it’s natural we have differences, even in regard to human rights. In China we care more about rights to better life, to better jobs, to better housing.”
The UK has been criticised in the past for doing business with countries which have questionable human rights. The excuse often given is – it’s not our country; we shouldn’t interfere. Yet if we’re not doing business with a country, does that mean we’re quicker to point the finger over human rights abuses?
Is teaming up with the Chinese a smart move by the government? Should we ignore China’s human rights record?