Trump’s unique brand of realpolitik leaves little concern for dogma in America’s foreign relations. In keeping with the business credentials he is always keen to highlight, Trump approaches America’s relationships transactionally. ‘America first’ simply wants good deals for America. The US-China trade war was conducted in this fashion. Trump railed against China’s unfair trade practices but passed little judgement on its system of governance or increasingly expansionist foreign policy. He was effusive in his praise for President Xi Jinping.

It was consensus among the political commentariat that Trump would look to conclude (and declare a great success) a new trade deal before the November election. Phase One was duly agreed in January.

The subsequent Coronavirus outbreak has drastically altered this course of quasi-reconciliation. As the virus ravages through America and (possibly) Trump’s re-election chances, the tone of his administration has noticeably changed. Last week, Secretary of State, Mike Pompeo, drew a moral chasm between the two nations in a speech entitled, ‘Communist China and the Free World’s Future’.

The changing rhetoric has stirred talk of another Cold War, which will this time set the United State and its allies against China. Chartwell examines the issues that have brought us here and looks at the experts who can best examine them.

National Security Law

Provision for a law of this kind always existed within the Basic Law of the Sino-British Joint Declaration. Victor Gao, former aide to President Deng Xiaoping, signatory of the agreement, made this point in a conversation I had with him earlier this summer. He argued that no other country in the world would allow part of its sovereign territory to be misused in a way that constitutes a threat to itself. The 2019 protests had, in his view, done this. The Security Law was needed now to restore stability to Hong Kong.

Kishore Mahbubani, Singaporian academic and former President of the UN Security Council, reiterated this point. He recently said that every country has its own security laws designed to protect them from foreign interference. He cited the example of the US previously prohibiting non-citizens from owning a TV station in the country. What really irks the US, he claimed, is that China has become a global player using a system of government alien to them.

Here in Hong Kong though, the Financial Times’ Asia Editor, Jamil Anderlini, said the law raised serious concerns about Hong Kong’s future. Its implementation bypassed Hong Kong’s semi-autonomous legislature and could thus be seen as breaking the Basic Law. Hong Kong’s status as a global financial centre, he said, relied on an independent judiciary. The National Security Law undermined this.

Meanwhile, the outspoken last British Governor of Hong Kong, Lord Chris Patten, has been forthright in his criticism of the Chinese government. He claimed the law was a “fragrant breach of the Sino-British Joint Declaration” and that it rendered ‘One Country, Two Systems’ obsolete. After a dozen pro-democracy candidates were last week disqualified from standing in September’s elections, he accused Beijing of carrying out “an outrageous political purge”.

Huawei

Huawei has become a potent symbol of the escalating tensions between China and the West. The Trump administration has ferociously lobbied its allies to ban the Chinese technology company from building its 5G systems. The UK’s reversal of the earlier permissions it granted now leaves Canada as the only Five Eyes member yet to ban Huawei. It is expected to follow suit shortly.

Peter Nolan, the Chong Hua Chair at Cambridge University, believes the West shows an unwarranted mistrust in Chinese companies. He disparages the view that China is not as open to the West as the West is to China. He argues that foreign firms fully occupy key areas of the Chinese economy, such as the IT systems of their biggest investment banks. China, he says, remains in a deficit when it comes to Foreign Direct Investment.

The eminent Chinese economist, David Daokui Li, believes the West’s Huawei ban will only entrench nationalistic attitudes and empower Huawei. The company will move forward with its own version of computer chips and operating systems to decrease its reliance on US tech companies. Ultimately, “President Trump is waking the sleeping capacity of Huawei”, Li says.

However, Western politicians and officials are adamant about the national security threat posed by granting the company access to operating systems. Trump’s former Deputy National Security Advisor, KT McFarland, claims that under Chinese law, the government can order Huawei to collect national security data, intellectual property, and listen into personal, government, and corporate calls.

The UK’s former Chief of MI6, Sir John Sawers, changed his mind on the issue, saying that the latest US sanctions no longer made Huawei a viable partner. Writing in the Financial Times, he said the “UK intelligence services can therefore no longer provide the needed assurances that Chinese-made equipment is still safe to use in the UK’s telecoms network.”

Next Flashpoint: Taiwan?

In May, the Chinese government dropped the word ‘peaceful’ in talking about its eventual desire to reunify with Taiwan. The reunification is believed to be President Xi Jinping’s most coveted foreign policy goal and one he wishes to define his legacy. Following the election of Tsai Ing-wen in 2016, China has become increasingly forceful in trying to prevent Taiwan’s moves towards permanent independence. With the US’s Taiwan Relations Act unofficially commiting America to military defence of the territory, many commentators see it as the one flashpoint that could lead to China – US conflict.

Chinese-American political scientist, Huang Jing, is the author of “Inseparable Separation: the Making of China’s Taiwan Policy” and does not believe confrontation is imminent. He claims that, while Chinese leaders have outwardly clamoured for a quick reunification with Taiwan, they are happy to maintain a gradualist approach. The only scenario in which he anticipates China using military force is one in which Taiwan revises its constitution to eliminate mention of the one-China concept.

However, might Coronavirus have changed this? With the rest of the world preoccupied with the pandemic, China may act opportunistically to right historic grievances, next in Taiwan as it has in Hong Kong. Niall Ferguson believes these actions may stem from a position of weakness rather than power. He posits that China’s lack of transparency around the devastating Coronavirus outbreak has “fuelled the fires of anti-Chinese sentiment in the US and parts of Europe”. Concerningly, he argues that the “Cold War II is happening now”.

The latter half of the last decade was characterised by ever-changing and chaotic international relations. Five years ago, then British Chancellor George Osborne talked about a ‘golden decade’ for Sino-British relations. In January of this year, Sino-US relations appeared to be thawing. Seven months later, geopolitical analysts do not rule out military conflict.

Under the cloud of Coronavirus, the following months and years are even more unpredictable. We hope that Chartwell’s expertise can help you navigate the twists to come and offer some vision of longer-term certainty.