By Powerscourt on 15/12/2020
At a recent Powerscourt Political event, Sir Vince Cable gave a webinar presentation on the UK government’s current stance towards China. Sir Vince has just published a short book, China Engage! Avoid the New Cold War, warning that “while growing Chinese influence may be uncomfortable, we have to learn to live with it”.
As business secretary in the coalition years, Sir Vince was a leading member of possibly the most pro-China government the UK has ever seen. Just months after the 2010 general election, Sir Vince, David Cameron, and George Osborne led the biggest ever trade delegation to China, taking 50 business leaders with them. It was the start of the so-called ‘golden era’ between the countries.
Then came what has been described as the ‘deep freeze’. UK-China relations have soured in recent years, to the extent that telecoms providers will be banned from installing Huawei kit on our 5G network as of September. This follows the antagonism between the US and China that has risen sharply since Donald Trump became US president in January 2017.
Sir Vince, who has took up a role as professor in practice at the London School of Economics after leaving the House of Commons last year, said there was little pressure from the Conservative backbenches over China in 2010-15.
Today, though, there is the China Research Group, which was set up in April to “promote debate and fresh thinking” on the UK’s response to the rise of China. “We had the security services crawling all over them [Huawei],” said Sir Vince. “They didn’t see any problem that couldn’t be managed, so the mood was quite different. There was virtually no pressure from inside the Conservative Party saying ‘stop’.”
Sir Vince described himself as a “China economic optimist”. He pointed out that even in this most challenging of years, China’s economy is projected to grow, while the UK, US, Eurozone, Japan, and India will all fall. There is a similarity with the depths of the financial crisis in 2009, when China and India both experienced growth of more than 8%, while the UK’s output shrunk by 5.5%.
The former Liberal Democrat leader fielded questions from some of the City’s biggest names, including Sir Martin Sorrell, Paul Drechsler CBE, and Jurgen Maier CBE. Asked how he would thaw relations if still in government, Sir Vince suggested it would all depend on the post-Brexit trade deal struck with the US.
“What price do we pay for a trade agreement with the US?” he said. “If you’re a member of the Cabinet, what you want to try to ensure is that a sensible balance is struck between this passion to re-establish a special relationship – which probably isn’t going anywhere anyway in the long run – and our real need to be closely engaged with the expanding countries of Asia, where China is at the centre.”