The race for Britain’s new Prime Minister is underway, and the two candidates vying for the top job are both tough on the CCP on foreign policy. British business people with deep commercial ties to China are severing business ties with Beijing and turning to other countries amid concerns that the continued strained UK-China political relationship will worsen. Due to the fundamental difference in security values ​​and strategies between the CCP and Europe, European scholars also call on the EU to change its current economic and trade strategy toward China and focus on security and economic sovereignty.

Financial Times: Thousands of British companies are severing trade links with China

The Financial Times recently reported that thousands of British companies are severing economic ties with China. In an interview with the news agency, Tony Danker, president of the Confederation of British Industry (CBI), said that every company he talks with is looking at restructuring supply chains because they anticipate British politicians will certainly accelerate progress towards a world decoupled from China.

Danker warned that the UK had to find new trading partners and reconnect with the EU if it wanted to give up its reliance on China. Otherwise, the supply chain costs of companies will increase significantly. The UK also needs to redefine its trade strategy.

The head of CBI believes that the UK needs to build new strategic alliances worldwide, and companies need to develop resilience, which is the topic everyone is talking about in Washington. However, he also pointed out that sourcing from other countries or locations will cause prices to rise and cause inflation.

According to official UK trade data, China is the UK’s largest import partner in 2021, accounting for 13% of total UK imports. At the same time, China is also the 6th largest commodity exporter of UK goods. 

The new prime minister candidates are tougher on the Chinese regime

Relations between Britain and China have become increasingly strained in recent years due to issues such as Hong Kong and Xinjiang. In recent years, the British government has increasingly tried to prevent Chinese companies from buying British companies on national security grounds.

A few days ago, the director of the British Intelligence Service (SIS/MI6), Richard Moore, publicly stated that China is now a top priority in his work.

The final two candidates for the leadership of the British Conservative Party and prime ministerial position, Foreign Secretary Liz Truss and former Finance Minister Rishi Sunak, have both recently pledged to take a tougher stance on China.

During a recent televised debate, Ms. Truss said she would crack down on Chinese companies like TikTok, the foreign version of Douyin. She also said: “We must learn from the mistakes of Europe’s dependence on Russian oil and gas. We cannot allow this to happen in relation to China. As for freedom, that’s worth paying the price.” The other candidate, Mr. Sunak, said China is the “number one threat” to domestic and global security.

Notably, the U.S. Federal Bureau of Investigation (FBI) and the UK’s General Security Administration (MI5) recently issued a joint warning that China poses a “big common challenge”: “The most game-changing challenge we face comes from the Chinese Communist Party. It’s covertly applying pressure across the globe. This might feel abstract. But it’s real, and it’s pressing. We need to talk about it. We need to act.”

European thinkers and scholars: EU should change its economic and trade strategy toward China

Mikko Huotari, president of the Mercator Institute for China Studies, a German think-tank, and scholar Sébastien Jean co-wrote a paper on July 29, pointing out that the Russo-Ukrainian war was a warning, and the CCP chose to side with Russia.

In addition, Lithuania has previously been retaliated against by the CCP for supporting Taiwan, and European politicians have been barred from entering Hong Kong for supporting Hong Kong, all of which indicate the CCP’s decisions on values, Politics, and security strategies run counter to the EU.

The two scholars argue that Europe’s economic strategy toward China will face three significant challenges. First, it will become more difficult to create a fair playing field, as China’s economic slowdown is making Beijing more aggressive in business and a less reliable trading partner.

Second, it is difficult to carry out active economic and trade cooperation. The CCP’s lack of clarity on human rights and other information issues, as well as personal data breaches, will lead to more disputes between the EU and China and the cost of protecting personal information for the EU and other countries and companies as they interact with China will also increase.

The third challenge is rising political tensions, which will lead to the risk of sudden economic and trade disruption. This includes economic retaliation by the Chinese government for violating political red lines and increasing the likelihood of a Taiwan Strait crisis and conflict with the United States.

Therefore, Huotari and Sean jointly call on the EU to change its current economic and trade strategy toward China, focusing on financial security and economic sovereignty, improving surveillance and intelligence capabilities, and strengthening its position in strategically important industries.

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