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Britain and the world begins to rethink their relationships with China

04 May 2020

By Simon Gentry, Managing Partner

Amongst the many things that the Coronavirus has done, is the change in attitudes around the world to China.

Change had already begun some years ago when Donald Trump rode public disquiet about China all the way to the White House.  America and Trump however were outliers, most countries generally saw China as a useful trading partner.  That’s suddenly changing quickly.

It’s hard to know if it was inevitable that there would be conflict, after all its unlikely that the emergence of a new superpower onto the world stage would not ruffle feathers, or if it could have been managed better, but it’s hard not to conclude that the current Chinese government is making things more difficult for itself.  Under President Xi there appears to be a concerted attempt to argue that China’s form of government is superior to those of the rest of the world. This appears to be the motivation behind some of the very crude communications from Chinee diplomats and the state-controlled media, all of which are playing into the hands of those who can only be described as sinophobes.

Concern about the way the Chinese government handled the beginning of the pandemic, attempts to take advantage of the crisis to achieve strategic goals, and longer-term external economic policies that seem one-sided have encouraged governments in London, Brussels, Washington, Canberra, Tokyo and Delhi to shore up defences against what they see as unfair practices by China.  These concerns are also forging new diplomatic structures.  The Quad – India, Japan, Australia and the USA – is rapidly institutionalising to facilitate security in the Indo-Pacific, for instance.

Most important for businesses, are the growing calls from politicians in the west for an economic ‘decoupling’ from China, a systematic attempt to reduce economic dependence on the country.  In practical terms this is most likely – certainly in the case of the UK – to manifest itself in new trade agreements being structured to give advantage to countries where manufacturing currently taking place in China might be switched.  India and parts of Africa spring to mind, a thought not lost on both political and business leaders in those countries.