After political parties in the UK spent months battling in opinion polls, campaigning for votes, and struggling for the upper hand in the eyes of the public, the results of the country’s election were announced in May 2015. The Conservatives gained a single-party majority in Parliament with 331 of the 650 seats in the lower house, while David Cameron was reelected prime minister. The Labour Party took only 232 seats. 

The amount of international attention that this election garnered has once again proven that the UK continues to be an indispensable actor on the world stage in the twenty-first century. Many countries carefully followed the election, including China. China’s political system is very different from that of the UK; however, this did not at all reduce China’s interest in the vote. 

Shi Zhiqin
An expert on European issues, Shi Zhiqin runs a program on China-EU Relations at the Carnegie-Tsinghua Center for Global Policy.
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China has consistently attached great importance to its relationship with the UK, and has seen the UK, as well as the European Union (EU) in which the UK holds membership, as important poles in today’s multipolar world. The EU is central to China’s vision of a multipolar world. It has been China’s largest trading partner for the past decade, is the cradle of Western civilization, and is a major source of advanced technology for China. The results of the UK general election will have a crucial influence on the China-UK relationship as well as the China-EU relationship.

In the wake of the election, prospects for cooperation between China and the UK are encouraging. If both sides can avoid pitfalls, the bilateral political partnership may even grow stronger and more stable. Chinese President Xi Jinping’s coming state visit to the UK in October 2015 is going to strengthen the relationship.

A Solid Foundation for Future Cooperation

The China-UK relationship appears to be on solid footing, in part because the Cameron government and China’s leaders already know how to work with each other. Over the past five years, Cameron and his team within the Conservative Party have accumulated rich experience and learned lessons about interacting with China. He has already gotten to know China’s government officials, its bureaucratic institutions, and its policy orientation. Chinese officials also know how to interact with and work together with their UK partners. The two sides have established a mutual understanding and have recognized the importance of win-win cooperation. 

Moreover, Cameron has consistently attached great importance to China, as demonstrated by his frequent visits to the country and his decision to make the UK the first major Western country and the first G7 member to join the China-initiated Asian Infrastructure Investment Bank (AIIB) amid U.S. concerns. 

The election results give the UK government more flexibility to enhance its relationship with China. Before this election, the UK had a coalition government formed by the Conservative Party and the Liberal Democrats. Of these two parties, the Liberal Democrats historically have attached more importance to ideology. The share of the vote obtained by the Liberal Democrat coalition partners fell from 23 percent received during the previous election in 2010 to 8 percent during this election—one of the election’s worst performances. They are down to only eight seats in the lower house of Parliament. The Conservative Party, freed of its coalition with the Liberal Democrats, now is less constrained by ideological issues. There will be reduced ideological conflict with China as a result. 

The UK and China also have a lot of opportunities for deeper economic cooperation. The UK was the first major Western power to join the AIIB, and London has actively helped to promote offshore trading of the renminbi. This shows that the UK government hopes to have more and better cooperation with China when it comes to economics and finance. 

The UK’s cooperation with China is largely a result of the former’s focus on investment interests. It has been the most popular destination for Chinese foreign direct investment in the EU since 2012. Meanwhile, among EU member states, the UK is China’s second largest source of investment. In addition, London is the first and largest offshore renminbi trading hub outside Asia. 

Among EU nations, the UK is the greatest advocate of free trade and open economic policies, and this is beneficial for the deepening of economic and trade cooperation between China and the EU. Although the EU historically has been a keen advocate of free trade, some member states have moved toward protectionism since the 2008–2009 global financial crisis. Open economic policies in the UK and Europe as a whole would also be beneficial for negotiations on a China-EU bilateral investment treaty. The EU’s numerous trade barriers on Chinese products (like tariffs, anti-dumping duties, and non-tariff barriers), which often induce tit-for-tat reactions from China, are huge obstacles to market access between China and the EU, while opening up each other’s markets is set to be a key objective of the proposed investment treaty.

China’s relationships with the UK and the EU rely heavily upon economic exchanges, and more liberal and open policies would benefit both Europe and China, and would also allow the China-UK relationship to develop in a more positive direction. The UK’s Conservative Party has long hoped to develop the country’s liberal economy. 

In addition, the UK is important to China’s broader foreign policy vision. In recent years, the new generation of collective leadership in China under Xi Jinping has repeatedly advocated for a new type of great power relations. While this framework was initially applied to the China-U.S. relationship, in reality, it is also suitable for China’s relations with all of the permanent members of the UN Security Council, including the UK. 

At the core of this new type of great power relations that Xi Jinping has discussed are the concepts of non-conflict and non-confrontation. A new type of great power relations is one in which there is mutual respect. It is the concept of cooperation through dialogue in order to properly deal with problems and differences. It is the idea of win-win cooperation and the abandonment of zero-sum thinking. 

The UK’s decision to join the AIIB has further proven that the China-UK relationship is that of a new type of great power relations, because it shows that the UK has adopted a policy of constructive cooperation with China instead of viewing it as a threat. This seems to suggest that China-UK relations may be developing into an example of great power relations, a trend that is likely to continue. 

Working to uphold the new China-UK great power relationship will bring benefits to the UK’s development. China is not only an active participant in crucial global institutions, namely the UN Security Council, the G20, and the WTO—it is also an important engine of global economic growth and the world’s second largest consumer market.

Potential Obstacles to Enhanced Cooperation

However, potentially destabilizing factors in the China-UK relationship remain. In the past, the Tibet and Hong Kong problems were a primary source of conflict. The Cameron government encountered difficulties regarding its policies toward meetings with the Dalai Lama, which temporarily bogged down the China-UK relationship in 2012. The Cameron administration has already learned from this experience. For now, these issues have been mitigated. After all, Hong Kong’s handover was smoothly completed in 1997, and no British leaders have met with the Dalai Lama since Cameron did so at St. Paul’s Cathedral in May 2012.  

Another potentially destabilizing factor is the increasingly close military cooperation between the UK and Japan, including joint research on defense equipment, joint military exercises, and negotiations on the sale of top military technology. Before the issue of Japan’s responsibilities with regard to World War II is properly settled, China and its Asian partners cannot accept Japan’s return to a normal state of militarization. China hopes that the UK will not solely focus on the interests of its arms industry and disregard the security concerns of other nations.

The special relationship between the UK and the United States could be another destabilizing factor. Even though the UK has insisted on becoming a founding member of the AIIB in the face of U.S. opposition, the special relationship that has lasted for many years between the UK and the United States and their shared cultural values will not fall apart easily. When it comes to security, the UK and the United States remain allies, and this will not change. This could be detrimental to China if it comes into conflict with the United States, because the UK would stand with the United States.

Of course, the UK’s diplomatic policies put a stronger emphasis on its own national interests. If its core interests were to be threatened, it would be natural for the UK to forge its own path. Political leaders such as Cameron actively pursue autonomy when dealing with international affairs as opposed to simply obeying the commands of the United States.

The UK’s Future in the EU

The UK’s decision about whether or not to leave the EU will have a direct influence on China-EU relations. After winning the election, the Cameron administration will need to fulfill its promises and hold a referendum in 2017 on this question. 

It would be more beneficial to the China-UK relationship for the UK to remain within the EU. The UK’s departure from the EU would certainly weaken the power of both the EU and the UK, and this would not be beneficial to China-EU relations or China-UK relations. If the UK actually did leave the EU, not only would the UK’s importance for China be reduced, the EU’s importance for China would also drop. This would not be good for anyone. 

The UK’s departure would also harm China’s economic interests in Europe. The UK economy is capable of playing a very important role in the EU. But if the UK were to exit the EU, this would very likely leave unchecked some countries in continental Europe that favor trade protectionism. This is something that China is not willing to see happen. 

The UK’s domestic politics, particularly with regard to Scotland, is another important reason why the UK is unlikely to leave the EU. Scotland will insist on remaining within the EU, so if the UK were to leave, Scotland would once again make a strong effort to leave the UK and rejoin the EU. In the May election, the Scottish National Party, which advocates Scottish independence, took control of 56 out of the 59 parliamentary seats in Scotland. The Cameron government clearly understands what this development implies. 

From the Scottish referendum on independence at the end of 2014 to this recent election, UK voters have proven to be rational. The Cameron government understands that they will not opt to leave the EU. 

Furthermore, leaving the EU would also negatively affect the UK’s ability to shape EU policy. The decisions of the European Council, the European Commission, the European Parliament, and the European Court of Justice are not only political issues for the UK and other nations of the EU. The choices of these institutions have an effect on the policies of the rest of the world as well. The decisions made by the EU have a decisive influence in a number of different areas, such as the development of economic markets and different industries. 

The UK’s separation from the EU would be an abandonment of its current voice and policymaking role in these institutions. If the UK did not value these rights, it would not have insisted on applying for entry into the European Community in the face of strong opposition from then French president Charles de Gaulle in the 1960s. It is more beneficial for the UK to remain in the EU rather than simply remaining a part of the European Free Trade Association. 

But if the UK isn’t likely to leave the EU, then why would the country bother to hold a referendum vote on whether to do so? It appears likely that the referendum to leave the EU is a political tactic for gaining domestic power within the UK. It is an attempt by politicians to gain benefits for themselves as well as their political parties, and it is also a tactic for strengthening the UK’s bargaining power vis–à–vis the EU. The Cameron government’s ability to bargain with Brussels is limited, yet it is a clever political move to use the threat of leaving the EU in order to pressure Brussels to cede some sovereignty back to London. 

It is not surprising that the UK would try such a strategy. After all, the UK, which has always made an effort to keep its distance from the EU, is not a founding member of the institution, and has also refused to join the eurozone and the Schengen Agreement. On many occasions since former prime minister Margaret Thatcher held office in the 1980s, the UK has worked to regain power from Brussels and has also tried to recover its financial investment in the EU. Other members of the EU have long since become accustomed to the UK acting distant.

China, Europe, and a Multipolar World

As the UK ponders its future, it should continue to look beyond its own borders. Looking at the long-term development of the China-EU and China-UK relationships, it will be necessary to respect the principles of mutual respect, mutual understanding, and win-win cooperation. 

As long as these parties do not threaten each other’s core interests, China-UK and China-EU relations will steadily grow in the future. China needs a multipolar world that includes a strong Europe. It is China’s hope that the EU remains united, prosperous, and strong.

Lai Suetyi is a postdoctoral researcher at the Department of International Relations of Tsinghua University, researching China-EU relations, mutual perceptions between Asia and Europe, interregionalism, and the Asia-Europe Meeting.

This article was published as part of the Window into China series.