The cold war tech
London has become a real (ideological, let it be clear) battleground between China and the United States 5G. In a historical moment like the present one, in which many observers think a new ‘is underway’cold War’Between the two super powers, the theme takes on a deeper meaning. Leaving aside all the analogies and differences between the old US-USSR clash and the current one US-China, the fundamental point is that the European continent, and therefore also the United Kingdom, is at the center of this new dispute.
Huawei at the heart of the UK-US dispute
Last January, in fact, London approved the inclusion of Huawei, well-known Chinese company, in the 5G national wireless network construction program, albeit with some limitations (a maximum participation of 35% in the non-sensitive and peripheral parts of the network). The United States immediately disapproved of it, trying first to dissuade the British government from signing the agreement and then to pressure it to retrace its steps. From the U.S. point of view, the Huawei deal was like a betrayal by the country which is historically the most trusted partner overseas. The company based in Shenzhen in fact, it is the subject of a US commercial ban which has been tightened in recent days. The U.S. Department of Commerce has ordered that the manufacture of chip and processors in all world factories where American technology is used will not be able to do business with Huawei without one license specific. The US goal is to make scorched earth around the Chinese company, which has four months to prevent its production and distribution chain from being disrupted.
Trump’s threat on F-35 and Five Eyes
Trump is using his heavy hand to force Johnson to rethink the relationship between China and the United Kingdom. Washington has in fact threatened to cancel the already planned use of the aircraft American F-35s on the aircraft carrier ‘HMS Queen Elizabeth’ of Royal Navy, but above all he warned London that in the future he could no longer take advantage of the information sharing of the so-called Five Eyes (the alliance between the intelligence services of the USA, Canada, Australia, New Zealand and precisely the United Kingdom). This is because he fears that Huawei, and therefore China, may compromise the security and stability of the communication channels.
Goodbye to golden era London-Beijing?
Relations between Beijing and London have been fluctuating for several years but since 2015 there has been a strong economic rapprochement between the two countries, inaugurated by the declarations of a “Golden era” pronounced by the conservative George Osborne, former Chancellor of the Exchequer. Over the past decade, China has poured billions of dollars of investment into the United Kingdom, especially in London’s real estate and logistics sector. To give a simple but explanatory example, Beijing holds a minority share of London’s airport Heathrow. Huawei itself has been present in Great Britain since 2001, where it has more than 1,400 employees.
Chinese interest in steel and UK addiction
Even more recently, China has managed to penetrate the British production fabric by taking over several companies. Last November the Chinese group Jingye acquired the steel producer for around £ 70 million, thus saving it from bankruptcy British Steel. This Chinese policy has taken place across Europe, but there is no doubt that the addiction London vis-à-vis China has increased significantly. This is also demonstrated by a report by the Henry Jackson Society which highlights the strategic dependence of the United Kingdom towards China, especially in the pharmaceutical and technological sector. For 229 assets, more than 50% of imports come only from Beijing.
Look to the East in the post Brexit
When the exit from the EU is defined, the United Kingdom will prefer bilateral trade agreements and in all likelihood will bet on Asian market (Singapore, South Korea, Malaysia, Japan among all) and on the oceanic one. A definite definition of relations with Beijing will therefore be essential. But more generally London will have to find one strategy clear to follow between the US and China, also given the acceleration of tensions between the two powers caused by the pandemic underway. A strategy that at the moment, if any, seems to be at least confusing. Within the same conservative majority there is a strong current that is pressing for Premier Johnson to immediately tighten the relationship with Beijing, precisely because of the Chinese management of the virus.
How difficult it is to get away from the US
It being understood that for Britain to free itself from American influence is unthinkable, and euphemistically speaking even recklessly, the most credible option that London has is to sacrifice part of the new road (China) to stay on that old (USA). This obviously will not mean cutting off relations with Beijing but following the line dictated by the United States, also because Washington, in all probability, will not allow the opposite to happen.