April 26, 2023 - 1:50pm
Yesterday evening British Foreign Secretary James Cleverly gave a speech at Mansion House, trying to set out a path for a constructive relationship between Britain and China. Cleverly’s speech went aggressively against the grain, calling out what he considers to be bad thinking in foreign policy circles.
The Foreign Secretary took aim at the so-called “Thucydides Trap”, which states that a rising power will always conflict with an incumbent. “We have agency, we have choices,” he said, “and so do our Chinese counterparts.” The fact that this even needs to be stated shows how far our foreign policy discussion has been degraded. There is no inevitable force of history driving conflict between America and China — indeed, the whole notion of “forces of history” that override human decision-making is superstitious thinking.
What ends up happening between the United States and China will happen because of the choices that we make, just as Cleverly said in his speech. Likewise, what happens between Britain and China will be determined by the decisions made by British politicians and policymakers.
The question is whether British politicians and policymakers have sufficient agency to determine their own future, or whether they will follow Washington down whatever path it chooses — no matter what the British Foreign Secretary says. If it turns out to be the latter then, sadly, it will finally be clear that Britain has lost what remains of its sovereignty with respect to big foreign policy decisions.
The reality is that Britain is in an impossible position. The national economy is in trouble. The country’s manufacturing sector has been gutted, and what remains is deeply stitched into global supply chains. Britain’s main exports are services — especially financial services — and these rely on good relations between countries much more than manufacturing exports do. If the world shatters in two, with America going one way and a Chinese-led bloc going the other, Britain will be torn in half.
The consequences of this rupture will be a precipitous decline in British living standards. Britain already has the highest inflation rate in Western Europe. Think of this as a canary in the coal mine. If the tectonic geopolitical forces driving the inflation continue to intensify, those inflationary pressures will get worse and worse. Inflation will eat away at British living standards. The cost of living “crisis” will, in a few years, cease to be a crisis and become the new norm.
With falling living standards will come less funding for the institutions, like the military and the diplomatic corps, that Britain uses to project power abroad. If some politicians think that “standing up to China” will increase Britain’s pull on the world stage, they clearly have very little conception of how the British economy is set up or what happens to countries that fall into terminal stagnation and decline.
The stakes could not be higher. The Europeans are gradually signalling that they will go their own way with respect to the China question should the United States decide to launch a new Cold War — or, God help us, a hot one. Yet the European economy, with its powerful manufacturing base in Germany, is far less fragile than Britain’s.
“Our task,” Cleverly said last night, “is to shape the course of future events, not succumb to fatalism.” Historians will likely read those words. This might be as a last-gasp effort by the Foreign Secretary to ward off a looming disaster that ultimately failed. Or, rather, as the beginning of a constructive new approach that narrowly saved Britain from crashing against the rocks and destroying itself.
Philip Pilkington is a macroeconomist and investment professional, and the author of The Reformation in Economics
philippilk
Join the discussion
Join like minded readers that support our journalism by becoming a paid subscriber
To join the discussion in the comments, become a paid subscriber.
Join like minded readers that support our journalism, read unlimited articles and enjoy other subscriber-only benefits.
SubscribeThe UK doesn’t have the highest inflation in Western Europe. Sweden currently has the highest inflation rate in Western Europe – 10.4% (we are at 10.1%). The highest peak in WE was the Netherlands on 14.5% in Sept (we peaked at 11.1%).
The European economy is more fragile than Britain’s, not less, as it is wholly dependent on Russian energy supplies and Chinese markets. Future domestic growth in the EU is likely to be non-existent as their population shrinks. Britain on the other hand is unshackled from the shrinking EU market and is striking up relationships elsewhere – the CPTPP for instance.
And off course the Brits should and will side with the USA rather than the EU if they diverge over China – that was the whole point of AUKUS and the lesson of the last 100 years of history. When the SHTF, the Anglosphere stands together.
Depends. Didn’t stick together in Suez or Falklands, and the USA weren’t exactly supportive of the UK when it came to the IRA. We also kept well clear.of Vietnam despite USA asking us to join.
UK, Oz, new Zealand and Canada have better claims of sticking together, if only becaus we all share the same head of state.
I doubt if sharing the same titular HOS makes much difference nowadays
It makes some small difference I think; we live and travel there more because of political and family connections and the royal family is the representation
of how close we were. Elizabeth made the connection feel more real because she represented a time when we still worked very closely with those three countries, but with Charles it will probably fray away now.
Just as a simple illustratuon, UK tested nuclear bombs in Oz, something I don’t think would ever happen now. As I say, Elizabeth just exemplified that cooperation between the four countries, but in a more diverse and globalised world I don’t think Charles will have the same impact
It makes some small difference I think; we live and travel there more because of political and family connections and the royal family is the representation
of how close we were. Elizabeth made the connection feel more real because she represented a time when we still worked very closely with those three countries, but with Charles it will probably fray away now.
Just as a simple illustratuon, UK tested nuclear bombs in Oz, something I don’t think would ever happen now. As I say, Elizabeth just exemplified that cooperation between the four countries, but in a more diverse and globalised world I don’t think Charles will have the same impact
I doubt if sharing the same titular HOS makes much difference nowadays
“as it is wholly dependent on Russian energy supplies and Chinese markets.”
Let’s get this clear – you’re asserting that the EU is “wholly dependent” on Russian energy and the Chinese market? You note, correctly, that Britain is “striking up relationships elsewhere”. What you fail to mention is that the CPTPP involves a side-lining of British sovereignty – part of that deal is that British laws and British courts are to be silenced and rendered impotent, and most yield to foreign offshore courts. “Taking back control” lol. You also mention Britain striking up new relationships – as if the EU does not already do the same and would, for reasons you fail to specify, somehow be entirely reliant on its internal market. You do realise, don’t you, that the EU has numerous external relationships also? I appreciate your strong emotional commitment to Brexit and the Empire (nowadays the Anglosphere), but do try to cultivate a more balanced outlook.
Depends. Didn’t stick together in Suez or Falklands, and the USA weren’t exactly supportive of the UK when it came to the IRA. We also kept well clear.of Vietnam despite USA asking us to join.
UK, Oz, new Zealand and Canada have better claims of sticking together, if only becaus we all share the same head of state.
“as it is wholly dependent on Russian energy supplies and Chinese markets.”
Let’s get this clear – you’re asserting that the EU is “wholly dependent” on Russian energy and the Chinese market? You note, correctly, that Britain is “striking up relationships elsewhere”. What you fail to mention is that the CPTPP involves a side-lining of British sovereignty – part of that deal is that British laws and British courts are to be silenced and rendered impotent, and most yield to foreign offshore courts. “Taking back control” lol. You also mention Britain striking up new relationships – as if the EU does not already do the same and would, for reasons you fail to specify, somehow be entirely reliant on its internal market. You do realise, don’t you, that the EU has numerous external relationships also? I appreciate your strong emotional commitment to Brexit and the Empire (nowadays the Anglosphere), but do try to cultivate a more balanced outlook.
The UK doesn’t have the highest inflation in Western Europe. Sweden currently has the highest inflation rate in Western Europe – 10.4% (we are at 10.1%). The highest peak in WE was the Netherlands on 14.5% in Sept (we peaked at 11.1%).
The European economy is more fragile than Britain’s, not less, as it is wholly dependent on Russian energy supplies and Chinese markets. Future domestic growth in the EU is likely to be non-existent as their population shrinks. Britain on the other hand is unshackled from the shrinking EU market and is striking up relationships elsewhere – the CPTPP for instance.
And off course the Brits should and will side with the USA rather than the EU if they diverge over China – that was the whole point of AUKUS and the lesson of the last 100 years of history. When the SHTF, the Anglosphere stands together.
What this author said:
“…There is no inevitable force of history driving conflict between America and China…”
What this author meant:
“…The West should back the f**k off when China attempts to invade Taiwan in the next few years, it’s a quarrel in a far away country, between people of whom we know nothing…”
We don’t know much about them, that’s true. But we do know that between them they produce almost all the world’s silicon chips. That’s something we can’t ignore.
Indeed
We don’t know much about them, that’s true. But we do know that between them they produce almost all the world’s silicon chips. That’s something we can’t ignore.
Indeed
What this author said:
“…There is no inevitable force of history driving conflict between America and China…”
What this author meant:
“…The West should back the f**k off when China attempts to invade Taiwan in the next few years, it’s a quarrel in a far away country, between people of whom we know nothing…”
I hope JC is right.
It would be a shame to see the US have its arse kicked again
I hope JC is right.
It would be a shame to see the US have its arse kicked again
A very good article. There is remarkably little intelligent public discussion of the significant risks to UK security and economy from:
1) Escalating tensions between US and China.
2) The drift towards a breakup of the World Trading system into a series of regional trading blocs
3) The UK’s potential economic and financial fragility.
Instead we get fed simplistic soundbites on issues each treated in isolation. The author is right to highlight how thin the ice the UK is skating on and how security and economic issues are interwoven.
Where I part company with him is that I suspect that the UK may be a relative economic beneficiary of a West vs. China ”Cold War”.
The greatest economic risk to the UK is not a China vs US confrontation as such – provided it does not go nuclear – but a collapse of the WTO with both Europe and the US retreating into mutually distrustful protectionist blocs. The trend is already apparent.
The UK risks being left outside both trading blocs and ending up as so much road kill – especially given its fragile services orientation as highlighted by the author. The British got through the 1930s in relatively better shape than the US or others largely because it was at the centre of the Sterling bloc which was the largest global trading bloc at the time. The worry is that the reverse may be true in the near future.
Where there may be a route through this minefield is if the need for western solidarity because of the security threat from China and friends leads to a reinvigoration not only of NATO and other western military alliances but also of the traditional economic and financial arrangements. The UK could continue to prosper – or suffer less – as part of a united western bloc.
The analogy is with the late 1940s when the threat from Stalin’s Russia led to American economic generosity and the creation of the various pan-western financial and military institutions. The UK – and European – economy recovered largely as a result. The British avoided national bankruptcy in part by scaring the Americans into a confrontation with Communism (and then got rather more than they bargained for but that is another issue).
One can see this logic already applying in our relationship with Europe which has improved not only because Boris has been replaced but also because a belt of EU countries from Estonia southwards are grateful for the UK for its robust response on Ukraine when compared to Germany’s. Supplying anti tank missiles to Kiev helped secure the Windsor Accord.
I am all for trying to keep the confrontation with China as calm and non military as possible but one also ought to recognise that a new “Cold War” may be our economic salvation if one result is revived western trade cooperation.
Incidentally I usually known as Alex Carnegie. I am not sure why UnHerd have billed me as m3pc7q3ixe.
Incidentally I usually known as Alex Carnegie. I am not sure why UnHerd have billed me as m3pc7q3ixe.
A very good article. There is remarkably little intelligent public discussion of the significant risks to UK security and economy from:
1) Escalating tensions between US and China.
2) The drift towards a breakup of the World Trading system into a series of regional trading blocs
3) The UK’s potential economic and financial fragility.
Instead we get fed simplistic soundbites on issues each treated in isolation. The author is right to highlight how thin the ice the UK is skating on and how security and economic issues are interwoven.
Where I part company with him is that I suspect that the UK may be a relative economic beneficiary of a West vs. China ”Cold War”.
The greatest economic risk to the UK is not a China vs US confrontation as such – provided it does not go nuclear – but a collapse of the WTO with both Europe and the US retreating into mutually distrustful protectionist blocs. The trend is already apparent.
The UK risks being left outside both trading blocs and ending up as so much road kill – especially given its fragile services orientation as highlighted by the author. The British got through the 1930s in relatively better shape than the US or others largely because it was at the centre of the Sterling bloc which was the largest global trading bloc at the time. The worry is that the reverse may be true in the near future.
Where there may be a route through this minefield is if the need for western solidarity because of the security threat from China and friends leads to a reinvigoration not only of NATO and other western military alliances but also of the traditional economic and financial arrangements. The UK could continue to prosper – or suffer less – as part of a united western bloc.
The analogy is with the late 1940s when the threat from Stalin’s Russia led to American economic generosity and the creation of the various pan-western financial and military institutions. The UK – and European – economy recovered largely as a result. The British avoided national bankruptcy in part by scaring the Americans into a confrontation with Communism (and then got rather more than they bargained for but that is another issue).
One can see this logic already applying in our relationship with Europe which has improved not only because Boris has been replaced but also because a belt of EU countries from Estonia southwards are grateful for the UK for its robust response on Ukraine when compared to Germany’s. Supplying anti tank missiles to Kiev helped secure the Windsor Accord.
I am all for trying to keep the confrontation with China as calm and non military as possible but one also ought to recognise that a new “Cold War” may be our economic salvation if one result is revived western trade cooperation.
…better to die on our feet than live on our knees, kow-towing to China. We won’t attack them…but they will most assuredly attack us unless we start obeying their orders. There are some zero-sum games in the world, and this is the next one on the horizon…
…better to die on our feet than live on our knees, kow-towing to China. We won’t attack them…but they will most assuredly attack us unless we start obeying their orders. There are some zero-sum games in the world, and this is the next one on the horizon…
There is no inevitability about a conflict with China, but what UK thinks my well be fairly irrelevant to the key parties. Xi was much more interested in Macron/Von Der Leyen visit because it had the weight of 27 nations, even if not all totally aligned on how to play this relationship.
Nonetheless some interesting moves by CCP last couple of days – firstly correction of the China ambassador to France comments on national sovereignty, and then some positive mood music with Zelensky. Suggests they are interested in European views if even just to try and ensure a bit of space between Europe and US in how each sees China. So quite cunning and deliberative.
We’d be naive to ignore the statements Xi has made repeatedly about Taiwan. The elections there in 24 pivotal. If the pro independence party wins, likely at the moment, then things will heat up fast.
There is no inevitability about a conflict with China, but what UK thinks my well be fairly irrelevant to the key parties. Xi was much more interested in Macron/Von Der Leyen visit because it had the weight of 27 nations, even if not all totally aligned on how to play this relationship.
Nonetheless some interesting moves by CCP last couple of days – firstly correction of the China ambassador to France comments on national sovereignty, and then some positive mood music with Zelensky. Suggests they are interested in European views if even just to try and ensure a bit of space between Europe and US in how each sees China. So quite cunning and deliberative.
We’d be naive to ignore the statements Xi has made repeatedly about Taiwan. The elections there in 24 pivotal. If the pro independence party wins, likely at the moment, then things will heat up fast.