September 11, 2023 - 9:50am

The news that a senior Westminster aide has been arrested on suspicion of spying for China has come as shock — though surely not a surprise. It is in the nature of rival powers to spy on one another. 

That said, it is unlikely that there are any British spies at work in the National People’s Congress in Beijing. After all, what would be the point? Though the world’s biggest legislature has 2,980 members, it is just a rubber stamp for the country’s communist leadership.

If there’s one thing worse than a one-party state, it is a one-man state — especially if that man is a control freak like Xi Jinping. According to a report in the Wall Street Journal, “[Xi’s] centralization of power is delaying the country’s response to its worst economic slowdown in years.”                                    

Officials are especially worried about the teetering property market, which the WSJ authors describe as the “biggest drag on growth”. In fact, what we’re seeing in China is no ordinary downturn. Rather, the wheels are coming off the country’s entire economic model.

It turns out that pumping unlimited amounts of capital into a construction boom has its limits. China may be a communist state, but that doesn’t make it immune to certain realities. As such, serious consequences are unfolding — like the collapse of Western investment. Just look at the following chart, from Axios, which shows the rise and fall of dollar-denominated Chinese property bonds (i.e. a way for outsiders to invest in China’s once-booming property market). Worth over $150 billion dollars just a couple of years ago, their value has since plummeted to $33.8 billion.

Credit: Axios

If President Xi insists on blocking necessary reforms, then things will go from bad to worse. Just how much worse is hard to say. To borrow from Zhou Enlai’s supposed verdict on the French Revolution, it is too early to tell. Nevertheless, we can’t take China’s economic stability for granted. A country that suddenly stops publishing its dire youth unemployment statistics does not command confidence.

Even if we discount the possibility of war over Taiwan or some other flashpoint, the West must stop betting its own economic future on the continuing competence of the Chinese Communist Party. At the weekend’s G20 summit in India, Giorgia Meloni signalled her intention to pull Italy out of China’s Belt and Road Initiative. This is an example to other Western leaders — who must do more to untangle their economies from the global web of supply chains controlled by Beijing. 

The recent discovery of what could be the world’s biggest lithium deposit, in the United States, should serve as further inspiration. Lithium is vital to our high-tech future – and so this is just the sort of opportunity to make the most of. Indeed, the nations of the West must work together to build up our collective economic security. 

That doesn’t mean that we shouldn’t strive for friendly relations with China; but it does mean ending our dependence on a potential foe. 

Peter Franklin is Associate Editor of UnHerd. He was previously a policy advisor and speechwriter on environmental and social issues.