Rachel Reeves gambles with national security to ‘bet on red’ with China trip

Rachel Reeves’ visit to China is “perverse, wrong, misguided, and unhelpful” , a former diplomat warned last bight.

And it shows the lengths to which this Government is willing to risk national security to bail out its flagging economy.

The stark warning comes just days after it emerged that Chinese engineers had invented devices to sever such undersea electricity and data cables quickly and cheaply.

The Chancellor met with Chinese Vice-Premier He Lifeng in Beijing to discuss trade and investment opportunities as part of efforts to grow the UK economy and raise living standards.

Apart from expanding the UK’s financial services footprint in Shanghai, the aim is to “bring down barriers” that British businesses face in trying to export or expand to China and “explore deeper economic co-operation” with premier .

But the overture, which comes before the Government has completed its own China audit, exposes a “breathtaking naïveté” when it comes to dealing with Beijing, warned former British diplomat Matthew Henderson last night.

“The Chinese government used trade to pursue its geostrategic objectives which​ are to divide the West, weaken it, and exploit it,” said Mr Henderson, whose Foreign Office career spanned 30 years in China and Asia.

“China is a country which is cyber-attacking us day in, day out, attacking our businesses, our voting records and data, our infrastructure organisations, and even our Ministry of Defen​ce.

“What message is this Government delivering by going cap-in-hand to beg for more trade – trade that will never deliver what we are asking for?”

He said the Treasury was mistaken in believing it could insulate trade from real geopolitical risk.

“For China, this isn’t economics, it’s war by another name,” he said.

“The idea that economics exists as a separate discipline depends on there being global norms. The Chinese and the Russians and the Iranians and North Koreans do not respect global norms.

“The idea that the UK can somehow separate these two things is breathtaking naiveté.”

China continues to be the main financier for strategic allies and Iran, whose crude oil it purchases despite sanctions and in breathtaking quantities.

Together, the nations represent an “axis of anarchy” which wants to challenge the norms of established International law.

Last week a Newsweek investigation revealed that Chinese engineers at Lishui University ​had developed “dragging type submarine cable cutting​”​device​s was developed in 2020 by a team of engineers at Lishui University in coastal Zhejiang province, which is opposite Taiwan.

​it comes just weeks after Chinese vessels were linked to two severed telecom cables in Swedish territorial waters of the Baltic Sea and of the coast of Taiwan.

But even without its blatant national security risks, China simply does not allow the “level playing fired’ being asked of it by the UK.

“You go off to a place to do more business when you think that there will be advantage in it. And you want to ensure that difficulties such as ​the unfair playing field, can be resolved.

“But there never has been and never will be a level playing field when it comes to doing business with China. Chinese business is zero sum directed by political and geostrategic terms. “

One of ’s first acts after coming to power in 2012 was to establish the so-called Civil-Fusion Strategy which inexorably ended the division between Chinese civilian firms and the state in order to advance military, economic, and technological prowess.

“The idea of there being a truly private sector in China is nonsense. The CCP oversees all serious international trade activity, which is controlled through party members and intelligence officers to whom all individuals and companies are obliged by law to take tasks and report results,” he said.

And China’s opaque rules means that there can be no due diligence when choosing who to deal with, exposing the Government to accusations that it placing is economic bailout above its own human rights credentials.

He added: “ If you’re looking for a business partner in China, you’ve got to be satisfied that they’re operating fairly, which means you’ve got to look into their accounting practices and their connections

“But you cannot carry out an ​environmental, social, and governance (ESG) audit without falling foul of some sort of strange security rules.”

What the UK should be doing is to follow the US lead of shifting its supply chains to courts “we can trust” such as India, he said.

“What this government is doing is perverse, wrong, misguided, and unhelpful. What we need to do is to de-risk sensibly, think about our supply chain risk, and start again working with partners we can trust.”

Last week outgoing US national Security advisory Jake Sullivan met with India’s Narendra Modi to discuss just that.

Already major multinationals such as Microsoft, Dell, IBM, Stanley and Black & Decker have abandoned China, while the likes of Apple are decreasing their footprint there.

“There is every indication that Trump will continue this push to raster supply chins away from China ,” said regional expert Dean Cheng, of the Potomac Institute for Policy Studies.

“Xi wants foreign investment and access to technology but he is not prepared to do any of the political liberalisation or even economic liberalisation necessary to sustain it. There is no evidence, for instance, that he has backed off on intellectual property theft.

“India, meanwhile, is a democracy and offers a​ labour pool that will be competitive and risks undercutting China’s labour cost advantage.

“And if the United States is willing to allow India access to aerospace technologies under our arms export regulations,​ which it will not do for China; that would give India an enormous advantage.

“India could really pose a strategic challenge to China.”