The Bothersome Problem of China in the Anglo-American Alliance

On May 28, China’s National People’s Congress approved national security legislation that effectively ended the “one country, two systems” mechanism. The mechanism has been in practice since the British handover of Hong Kong in 1997 and ensures the former colony’s special status within China. The Sino-British Joint Declaration, in which this formula was established, legally affirmed the responsibility of both powers to uphold this system -meaning the Chinese legislation necessitated a serious response from the British government. The U.K. response has built up momentum over the past few weeks. After an initial joint statement with Canada and Australia came additional policy announcements committing the United Kingdom to phase Huawei involvement in the United Kingdom’s 5G network down to zero by 2023 and, more significantly, providing a pathway to citizenship for 3 million Hong Kong residents. These policies signal a new direction for London’s China policy, marking a significant break from the conciliatory approach of the 2010s. However, in defining this new approach, Whitehall policymakers were careful not to simply jump on board with Washington, preferring instead to align their approach more closely with the likes of Canada.

In contrast, across the Atlantic, the response was vociferous. Secretary of State Mike Pompeo certified to Congress that Hong Kong is no longer autonomous from China. The statement in Congress has given the administration a free hand to implement a wide range of measures to address the situation in Hong Kong. This may very well include stripping the city of its special trading status. The administration’s response to Hong Kong has instilled a rare moment of bipartisan consensus and has highlighted a gamut of measures the United States had already brought to bear to check Beijing. On June 10, Pompeo criticised London-based bank HSBC for supporting the Hong Kong national security legislation, which he decried as a “corporate kowtow”. Certain British politicians have criticised the move by HSBC, but the government has so far avoided addressing it directly. Given the City of London’s deep financial entanglement with China, HSBC could be a symptom of a much wider problem for Washington. These varied responses and potential spots of disagreement have revealed a chasm within the “special relationship.” But this is not a new phenomenon. In fact, since the 1920s the United States and Britain have diverged wildly on China policy, and cooperation has always been something of a mirage. This schism in the Anglo-American alliance is both significant and persistent. It is only by clarifying why and how those interests have diverged in the past that one truly comprehends the magnitude of the challenge to the alliance today.

The Original Sin  

It is important to contextualize this rift within the remit of what has been an extraordinarily successful relationship. In the 20th century, America and Britain have taken on the forces of revisionism, fascism, communism, and authoritarianism – and triumphed. While the two allies have not always seen eye to eye on every foreign policy issue, when it counted this alliance held firm. Even in the 21st century, where the expeditionary misadventures of Iraq and Afghanistan loom large, Britain’s support for the United States was steadfast. The promise of Winston Churchill’s vision of “fraternal association” has been ceremoniously invoked on both sides of the Atlantic since its inception. Contrary to its detractors who lament its end, though, the special relationship is not just a sentimental appeal to its Churchillian heyday. It has real currency. Today, it speaks to shared military bases, a British nuclear deterrent that relies on an American-made missile, intelligence sharing, active cooperation in major military conflicts, deep economic integration, and, with the signing of the Atlantic Charter in 1941, the foundations of the post-1945 liberal international order.

The roots of this alliance are, however, inseparably tangled with the roots of the present crisis of China policy. The special relationship is the product of a gradual agreement on what the international order should look like as well as a more immediate acceptance of the realistic limits of British power. These trends prompted a desire in London to see America take over the remaining global responsibilities it wearily maintained. The results were mixed. In the case of the Armenian question, Britain successfully leveraged U.S. domestic opinion to convince U.S. policymakers of the importance of bringing their resources to bear on this situation, as shown in Charlie Laderman’s new history on the subject. Similarly, on financial questions, with the center of global financial capital moving from the City of London to Wall Street, Britain could pass responsibility for global financial order to Washington. The 1920s were consequently important in that they established the essential building blocks for what a coherent Anglo-American foreign policy could be – even if this was different to what Britain imagined, as authors in these pages have stated. However, on questions of the Far East — specifically China policy — the 1920s brutally revealed the limits of cooperation. The necessity of this cooperation would, of course, become less important as the century wore on, with the United States accruing significant power as Britain went through a period of decline, which affected its ability to be a useful Pacific player. But whether the two countries want to cooperate on China or not, the reality is that China policy — as it has become the defining geopolitical challenge of this century — has gone from a minor disagreement in the relationship to an issue of the utmost importance, with ramifications for the alliance as a whole.

The Problem of China

While divergences on Anglo-American China policy predated the 1920s — in fact they go back to the Opium Wars — the Chinese nationalism movement of this period seemed to represent something truly novel in Chinese history in Anglo-Saxon imaginations. In the minds of Western intellectuals, this nationalist movement was pushing China toward its own — Western — modernity. For right or wrong, this belief in a “modern China” urgently highlighted the inadequacy of China’s being maintained as an informal imperial possession of Western powers. Correspondingly, Britain and the United States believed they had to reorient their existing policy to address this “new” China. At the end of 1926, as China was ravaged by civil war, British Foreign Secretary Austen Chamberlain announced the famous Christmas memorandum as a first step to redefine the Sino-British relationship. This committed Britain to a liberal and conciliatory policy toward China. The immediate grant to China of surtax revenues, agreed at the Washington Conference, and an end to the antiquated period of gunboat diplomacy was at the core of this policy change. However, before proceeding, Chamberlain was at pains to get American support for this policy. Despite the urging of the U.S. envoy to Peking, Secretary of State Frank Kellogg ultimately rejected joint action with other signatories of the Washington Treaty and signalled displeasure with the British memorandum. Kellogg believed that the United States needed to forge a new relationship with China based on a Wilsonian notion of self-determination rather than seeking to perpetuate the outmoded notions of the Washington Treaty, which sought to create the foundations of a sustainable international order in the Far East. While this was seemingly a difference in ways rather than ends, future Foreign Office Permanent-Undersecretary Robert Vansittart reflected on the disagreement at a much profounder level. He tersely remarked in a Foreign Office Minute in 1927 that “we shall always find it difficult to collaborate with them [the Americans] on major or vital issues till they cease to regard us as such far superior Realists.” In Vansittart’s mind the United States viewed the United Kingdom as driven solely by pragmatic demands, lacking in any imagination or long-term vision as to what a future Chinese relationship could look like.

Japan’s invasion of China in 1931 brought to the fore differing interpretations of the commitment to uphold China’s territorial integrity under the Washington Treaty. After Secretary of State Henry L. Stimson announced his “Non-Recognition Doctrine” — which stated that the United States would not recognize any territorial gains in China accrued by force — he signaled to the British government his intention to host a joint conference on the matter. Foreign Secretary Sir John Simon rejected Stimson’s proposals, preferring to bring the case to the League of Nations. However, following Simon’s poor performance at the General Assembly of the League of Nations, no significant pressure was put on Japan to withdraw from China. This episode, subsequently known as the Simon-Stimson Affair, indelibly shaped Anglo-American action in the Far East for the next decade as accusations of “betrayal” were leveled by both parties. During his meteoric rise to the premiership, Neville Chamberlain endowed the Treasury with responsibility for Britain’s China policy instead of the Foreign Office. This had the effect of moving Britain away from making firm stands against Japan and its encroachments on China and toward a policy that tried to maintain as much of an economic foothold in the Far East as possible. The timing could not have been worse. Right as Britain tried to maintain a preferential zone for British trade and commerce in the Far East, Stimson’s Democrat replacement, Cordell Hull, tried to pull these same economic orders down. The onset of the Second World War would do nothing to abate these disagreements. The joint allied China-Burma-India Theater that was formed to direct operations into China was immediately racked with Anglo-American rivalries. These disagreements encompassed the same kind of economic questions of the 1930s. These questions would find a renewed importance with the onset of Far Eastern postwar planning. This was something of particular importance to Britain as it looked to reestablish its position in the Far East, having lost most of its territorial holds on the region with the Japanese advance. Anglo-American cooperation in China in this regard would be, as one official commented, “chimerical.”

In 1949, after the U.S. government sank some $1.5 billion of authorized aid into Chiang Kai-shek’s Nationalist government’s coffers since VJ day, Mao Zedong emerged victorious against the Nationalists. Public opinion quickly rounded on the Truman administration, and claims of “who lost China” were awash in national newspapers. The great doyens of the early Cold War U.S. foreign policy apparatus would seize on Communist China as a major threat to the international system and avoid any discussions on the recognition of Communist China for the foreseeable future. In the aftermath of World War II, Britain felt much weaker in the Far East and more constrained in its China policy. In an attempt to protect Britain’s hold on Hong Kong and in deference to the views of British interests in Southeast Asia and the Commonwealth more broadly, Britain recognized the People’s Republic of China on Jan. 6, 1950.

Recognition was by no means a smooth process, with discussions temporarily halted with the outbreak of the Korean War. At first glance, the war’s outbreak might have looked like the British and Americans were collaborating on China. But this was not the case. Disagreements pervaded the crisis, most notably with significant British diplomatic attention dedicated to preventing the United States from opening a wider front in the war. With the conclusion of the conflict in 1953, Britain wasted little time, and following talks at the Geneva Conference in 1954 the People’s Republic of China posted a chargé d’affaires in London. Just one month after the conclusion of the Geneva Conference, American relations with the People’s Republic of China would reach a crisis point again as Chinese heavy artillery rounds landed on the Taiwanese-held Kinmen in the First Taiwan Straits Crisis as China sought to remove any Taiwanese presence from the mainland.

As Britain wrestled with a protracted period of economic malaise in the late 1950s and 1960s, it looked at areas in which it could cut back on its global commitments. Following the conclusion of the comprehensive Future Policy Study of the Harold Macmillan government, it was decided that the Far East was a low priority for British foreign policy and so the expenditures could no longer be justified. Macmillan even intimated to President Dwight Eisenhower that he wanted Hong Kong to be a “joint defence problem” right as Eisenhower’ administration was grappling with the Second Taiwan Straits Crisis. Despite a change of government, the incoming Labour administration of Harold Wilson agreed with the Macmillan government’s findings. After ignoring the fierce protestations of the State Department, Britain announced the “End of East of Suez” in January 1968. The announcement dedicated Britain to withdrawing its forces from many major military installations East of the Suez Canal and ceasing any major military roles in the Far East especially. The policy revealed that Britain and the United States had very different perceptions of the kind of threat that China posed to their security. The United Kingdom believed that the maintenance of its interests in the region would be entirely consistent with a reduced military force there. The End of East of Suez also sounded the death knell of any aspirations Britain had to be a significant player in the Far East and further reduced Britain’s importance to U.S. China policy. For the United States, China had direct military implications, as military planners believed that China’s connection to Hanoi during the Vietnam War was impeding the waging of an effective air campaign. Not even the assault on the British Mission in Beijing by protesters galvanized by the Cultural Revolution and the capture of British hostages in 1968 could affect a rapprochement. Instead, through quiet diplomacy, a culturally sensitive approach, and careful attention not to escalate the situation, Britain was able to secure the release of the hostages.

In 1970, as malaise turned to decline, Britain looked to establish full diplomatic relations with China through the exchange of ambassadors. The U.K. Foreign Office reached out to the State Department to gauge Washington’s thoughts on the matter. After hearing no response from the State Department for a year, British officials pressed U.S. Secretary of State William Rogers for a response while he was on a visit to London. Rogers asked for a delay in negotiations for an Anglo-Chinese joint announcement on the exchange of ambassadors between London and Beijing that the Foreign Office so craved. As reports increased daily of the intensity of Henry Kissinger’s discussion with the Chinese, Kissinger himself stated in December 1971 that large announcements on Britain’s China policy would be “unhelpful” for the American government at this stage. When the U.S.-Chinese joint communiqué was announced in February 1972, committing both countries to the normalization of relations, the mood in the Foreign Office was mixed. On the one hand, it was believed that the United States and Britain were finally going in a similar direction on China. On the other hand, Britain’s leverage to negotiate its own exchange of ambassadors with Beijing had been irreparably damaged.

This belief that Britain and the United States were working in the same direction on China was, nevertheless, a false dawn. The imminent expiration of territorial leases outside Hong Kong’s city limits in 1979 brought Chinese relations to the forefront of Margaret Thatcher’s foreign policy agenda. Lifted by her recent victory in the Falklands and her seemingly unassailable lead in the polls, Thatcher’s initial response was not to budge on the question of the handover of Hong Kong and instead hold the city at all costs. Cooler heads prevailed. Percy Cradock, a pragmatic China hand in the Foreign Office and a hostage in the British Embassy Siege of 1967, prevailed upon Thatcher to enter constructive talks with Deng Xiaoping on the future of Hong Kong. Thatcher eventually agreed to the request and talks with China began. While Britain entered into lumbering negotiations with Beijing, Sino-American relations nosedived. Despite achieving diplomatic normalization in 1979 with the exchange of ambassadors, the issue of Taiwan proved a stumbling block between the two powers. First came the Taiwan Relations Act of 1979, which stated that regardless of the absence of recognition for Taiwan, on a “practical level” the U.S. government would be able to conduct diplomacy with Taipei. A second issue concerned the reauthorization of weapons sales to Taiwan in 1982 in the hope that better defenses would deter any incursions from the mainland. Both of these policies declared America’s unwavering support of Taiwan and implicitly rejected the contemporary British approach. Three years later Britain’s negotiations with China eventually culminated in the Sino-British Joint Declaration. The declaration, British negotiators believed, detailed a roadmap for the peaceful handover of Hong Kong as well as enshrined Hong Kong’s special — crucially, democratic — status within China. More broadly, the declaration reduced uncertainties surrounding Hong Kong, which improved Sino-British relations.

The end of the Cold War did little to realign Anglo-American foreign policy. June 1989 witnessed the Chinese crackdown on Tiananmen Square protests, which invoked global condemnation. Buoyed by its seemingly irreproachable position following the Cold War, America was not shy about expressing outrage. The U.S. House of Representatives voted unanimously to impose sanctions on Beijing. When faced with the congressional bill, President George H.W. Bush was handed a fait accompli. Bush wanted to pursue good relations with China but, aware of congressional and public pressure to condemn China, refrained from vetoing the bill. While not immune from the public pressure, the United Kingdom took a different tack. Percy Cradock, now foreign policy adviser to Prime Minister John Major, was sent on a secret mission to Beijing to reassure the Chinese Communist Party of Britain’s commitment to working in step on the handover of Hong Kong in 1997. In the process, the United Kingdom became the first nation to send a senior official to China since the Tiananmen Square incident. In 1996, when the imminent election of a Taiwanese president who was critical of the “One China” policy prompted a People’s Liberation Army missile test in the Taiwan Strait, the Third Taiwan Straits Crisis erupted. As the U.S. military attempted to deter any military attack on Taiwan with the swift dispatch of a U.S. carrier group, he United Kingdom sidestepped cooperation with the United States entirely. It remained largely aloof throughout the crisis in an attempt to avoid jeopardizing the handover of Hong Kong on July 1, 1997. The successful handover of Hong Kong was of the utmost concern for policymakers; the wishes of allies were of a secondary nature.

By the start of the 2000s, the United States moved toward a more conciliatory policy. The China hands of the late Clinton and Bush administrations believed that China’s behavior in the 1990s was but a brief aberration and that all China needed was to become a “responsible stakeholder” in the international system. Joint action with China on North Korea and support for China’s ascension to the World Trade Organization were the clearest indications of this policy. The latter point also symbolized a more eclectic hope in Western administrations that more capitalism would bring more democracy in China. Even when a traditional flashpoint like Taiwan threatened to flare up, as in 2005 when the People’s Republic of China passed the Anti-Secession Law, which would prevent Taiwan from seceding from China — with force, if necessary — tensions did not escalate. The Bush administration pressed the European Union to delay plans to lift the arms embargo on China, which created a belief in Beijing that the bill was mishandled and the bill was too much too soon. A balance between upfront goodwill and assertiveness characterized much of America’s approach in this period. As the United States refined a new approach to China — albeit in the shadow of post-9/11 foreign policy — Britain’s own approach was that of drift. With the Blair administration much more concerned with Britain’s wars in Iraq and Afghanistan, a handful of British foreign policy mandarins in Whitehall and at the embassy in Beijing attempted to define the Sino-British relationship. However, there was only so much that policymakers could do on China in the absence of direct leadership. As a result, economic actors were left to define much of the Sino-British relationship in this period as they saw fit. Importantly, the fact that policy in this period was grounded in the views of economic actors foreshadowed the British policy that was to come.

The late 2000s period proved a moment of reflection for states’ relations with China.  Despite initial attempts by the Obama administration to cultivate closer ties with Beijing, the “Pivot to Asia” would do much to realign the Sino-American relationship toward that of strategic competitors. The pivot entailed a major military component and was pursued in conjunction with a tougher line on cyber security and Chinese claims in the South China Sea. The Trans-Pacific Partnership was also refashioned from a standard trade agreement to become a counterweight to the Chinese Belt and Road Initiative. As the United States toughened its approach, Britain prepared to usher in a “Golden Era” of U.K.-Chinese relations, deepening the de facto economic approach of the 2000s. Ironically, the great vision of the early 2000s of engaging with China economically and treating it as a responsible stakeholder was realized not in the place of that statement’s origin, the United States, but in the United Kingdom. As a commitment to this renewed relationship, the U.K. Treasury became the first Western country to issue a sovereign renminbi bond in 2014 as well as offering Xi Jinping a state visit in the same year. More controversially, in 2016, in the face of significant pressure from the U.S. government to do otherwise, Britain became the first major European country to join the Asian Infrastructure Investment Bank. The increasing economic ties of Chinese investment in strategic U.K. sectors and the $1.4 billion acquisition of the London Metal Exchange only further the point. This jarred with the incoming Trump administration, which promised — and delivered — a much tougher economic approach to China. By way of redressing the perceived pillaging of American industry, the administration was willing to wage pitched economic warfare across a wide battlefield – a conflict that is likely to feature heavily in the ongoing U.S.-U.K. trade negotiations. More recent disagreements on Huawei and Hong Kong are just the latest iteration of this trend.

China Policy: An Anglo-American Stumbling Block?

The United Kingdom is not a pivotal actor in the great competition between the mighty U.S. and Chinese behemoths. However, U.S. policymakers should not just cut Britain adrift simply because it wants to define a new — not necessarily American — approach toward China. Instead, they should look hard at areas of constructive cooperation with Britain. They should do this not only because Britain has been the most stalwart supporter of U.S. foreign policy goals in the 20th and 21st centuries, but because it has the potential to assist the United States enormously. Britain is the largest European foreign direct investment source into China, with the City of London enjoying significant links with Chinese investors. Moreover, post-Brexit British foreign policy has indicated a desire for a greater role in Asia and a return to “East of Suez.” Finally, despite leaving the E.U., the United Kingdom still enjoys an oversized role in international institutions such as the U.N. and NATO, not to mention an intimate knowledge of the current battleground of Hong Kong. At the same time, while the ability of the United States to unilaterally reshape the international order has been increasingly reconsidered of late, the reality is that the United States is still the most powerful actor in the international system. The United Kingdom will still depend on the United States for aspects of its China policy. Therefore, U.K. policymakers must vocally and wholeheartedly support that U.S. policy with which it does agree.

Yet this will not be easy. In major decisions relating to China policy, Washington and London have historically diverged significantly. It is a delicate time for the special relationship. Mishandling this fracture in the alliance could place a significant burden on the relationship. Policymakers in London and Washington should accept that cooperation on China will be fraught, inconsistent, and uneven. It will behave unlike any other foreign policy question between these two powers, and it will truly test the “specialness” of the special relationship. Yet disagreement and divergence does not spell the end of this relationship; it merely recognizes the long historical lineage of Anglo-American China policy.

Oliver Yule-Smith is a PhD student at the Centre for Grand Strategy in the War Studies Department of King’s College London. His research focuses on British China policy.

Image: White House (Photo by Shealah Craiughead)