Sherard Cowper-Coles, the former diplomat going to bat for British businesses in China

Sherard Cowper-Coles, the former diplomat going to bat for British businesses in China
Image: UK Parliament/Illustration by Ricardo Santos & Daniel Lee
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Sherard Cowper-Coles is the group head of public affairs at HSBC and chair of the China Britain Business Council.

Cowper-Coles was a diplomat with the Foreign and Commonwealth Office (FCO) for 30 years, where he was mostly posted in Muslim-majority countries. In 1994, he was appointed head of the FCO’s Hong Kong Department, and worked on the negotiations for the handover of Hong Kong from British colonial rule back to Chinese sovereignty in 1997. He is the author of Ever the Diplomat: Confessions of a Foreign Office Mandarinwhich chronicles in part his time working under Chris Patten, the last British governor of Hong Kong.

This interview has been condensed and edited for clarity.

Quartz: When did your interest in China begin?

Cowper-Coles: I first began to think about China in 1970, when I was a 15-year-old schoolboy. There was a rather enlightened cricket master [Mike Bushby] who taught a bit of history on the side. He ran a course called “The China Option,” because he concluded that in our lifetimes, China was going to matter enormously, and he thought we ought to know about its history, its culture, its challenges. I’d signed up for this course and learnt a lot about the history of modern China.

I wrote to the Chinese Embassy in London and was sent a copy of The Thoughts of Mao Zedong, which I’ve got beside me in my office.

The other teachers at [Tonbridge] school said that [the cricket master] was a communist and that he was indoctrinating us. In fact, he was a deeply conservative Tory [and] lover of the English game of cricket. But he had this expansive view of history and thought that China, which had accounted in the Middle Ages for perhaps 50% of global GDP, and in the 1960s and 70s was down to less than 20%, would come back in importance—and of course, he was right.

Do you do you still keep in touch with him?

Cowper-Coles: He died 18 months ago. But until then, I did. Every time I went to Hong Kong or China, I would send him a postcard. And I’ve got a folder of letters he wrote me over the years.

He wasn’t starry-eyed about China. He knew the sufferings of China under the Great Leap Forward and the Cultural Revolution, but he just thought China mattered—that it was a great civilization, and that in the sweep of human history, civilizations rise and fall and return. He wasn’t by any means a great intellectual—he was a much better cricketer than he was a historian—but he had this remarkable insight and I feel grateful to him.

One of my sadnesses was that I was going to arrange for him to come up to London—he was over 90—to meet the Chinese ambassador in London. That is one of the unfulfilled hopes of my life.

What did you learn about China at school that has stuck with you?

Cowper-Coles: I learned two things. First, that in almost every Chinese family, you go a generation or two back, and people have suffered from famine or civil war. One of my sons had a Chinese girlfriend whose grandfather had been beheaded outside Nanjing. The great fear of the Chinese people is of luan—of chaos.

The other thing I learned was that Chinese people want what we want, which is a better future for our families, for our children. They want physical security. They want reasonable material comfort. The Western discourse, which sometimes borders on racism, that the Chinese are completely different is just not true.

How did you first get to know China outside the classroom?

Cowper-Coles: I went on to study classics at Oxford and I passed the exams to enter the Diplomatic Service. I was told I was capable of learning what was called a “hard language,” and I was given the choice of Arabic, Chinese, or Japanese. For better or worse, I chose Arabic, because rather arrogantly I thought I could be ambassador in more countries. There’s a part of me that always regrets that, because China is deeply interesting as a civilization, and I think language is vital for understanding it.

I worked for the head of the diplomatic service and in 1985 he and I went to China. We traveled to Shanghai and I absolutely loved seeing this great country, which was just starting to open up and connect.

Ten years later in the Foreign Office in 1994, they needed a new head of the Hong Kong department in the three and a half years up to the handover of Hong Kong to China. Chris Patten didn’t want a sinologist, so I was chosen.

On the 8th of January, 1995, he asked to see me and to my horror really, said that he’d decided to break off negotiations with the Chinese over the Court of Final Appeal and to establish [it] without Chinese agreement. I believed that the Chinese, who had been very upset by the way we’d gone unilateral over the legislature, would be even more upset if we’d gone unilateral over the judiciary. I had to suggest that this wasn’t the right thing. There was great pressure applied to me to change my view. But I knew or believed I was doing what was right and eventually the governor changed course. We did a deal on the Court of Final Appeal, which exists to today.

My relationship with Chris Patten never really recovered. I saw [him] and those around him becoming leaders of the opposition to China and to Chinese rule. There was, particularly among the expatriates in the Hong Kong government, the Brits, the white civil servants and others, a feeling that you’ve got to stand up to China, whereas the right course was to recognize the historical context: That Hong Kong Island had been seized from China by force in pretty disgraceful circumstances as a base for our opium traders off the coast of China, that after the Second Opium War, we’d been given the lease on the new territories again in unequal circumstances, and in many ways it was rather as though France had seized the Isle of Wight and been given a lease over Southampton and Portsmouth.

We felt, particularly after Tiananmen Square, worried about handing Hong Kong back to China, but Hong Kong was China’s, and we assuaged our guilt by some political gestures that were not, in my view, well judged, or took account of the realities of history or of political geography. Our efforts at democracy were calculated in many ways to impress people in Washington and Westminster, but with a little more subtlety, we could have had a negotiated settlement.

Do you feel the same way in light of current events in Hong Kong?

Cowper-Coles: I’m not going to comment on contemporary politics, but I was at one stage the speechwriter in the Foreign Office for Margaret Thatcher and one of the many things I admired about her was although she had a very big heart and very strong emotions about communism, she had a head, and could be very logical. She knew that the right thing to do was to return Hong Kong to Chinese sovereignty, but in the best possible conditions, and to maximize the advantages for the people of Hong Kong.

That was the view I formed at the time and why I opposed a gesture of setting up a Court of Final Appeal that would then be under British sovereignty unilaterally and that would be torn down by the Chinese. And it’s really the fault line that we see today. Nothing I’ve seen since has changed my view that you need to take a practical analysis and you shouldn’t let the ideal or the dreams govern what realistically is in the best interests of ordinary people.

The UK has been engaged for over a year now in a national conversations about what kind of Chinese investment it should or shouldn’t welcome. What are your thoughts on it?

Cowper-Coles: Our approach on all of this is very much that set out in the British government’s Integrated Review 1 and also articulated by the chancellor of the Exchequer in his speech at the Mansion House. It is of sticking to our principles and our values, protecting our national security, but engaging where it is in the national interest to do so in terms of economics, people-to-people exchanges, trade, investment.

China is the world’s second largest economy with a group of middle-class consumers well over 400 million, on their way to 500 million, who, as premier Li [Keqiang] pointed out in a meeting that the China Britain Business Council organized with him this week, have an interest in goods manufactured in Britain. It’s a vast and growing market in areas which have nothing remotely to do with national security, [and] one where, particularly after Brexit, our exporters can profit. We have a surplus in the area of services where [there is] Chinese interest in everything from British architects and consulting engineers to banks and insurance companies and fund managers.

For Britain, a member of the G7 and G20, the fifth or sixth largest economy in the world, not to engage with the second largest economy, which is perhaps on its way to being the largest economy, is just not a responsible government. But it must be done in a principled and clear-eyed way.

The UK also has a large trade deficit when it comes to goods. In 2019, before the pandemic, it was £18.3 billion ($25.1 billion). 

Cowper-Coles: It’s shrinking, that’s the good news. Greater China is, if you include Hong Kong and disaggregate the European Union, Britain’s [second] largest partner in trade in goods. It’s like discussing whether you can stop the weather.

Our economic engagement with China is not just essential, it’s a fact of life. And both sides benefit from it, just as we benefit from the sums of Chinese investment in the UK, subject to proper safeguards. Even those in British politics skeptical of China, most of them accept that this economic relationship is pretty important.

It seems like those critical of China are more so trying to determine the limits at which engagement begins to infringe on either British interests in the case of investment or British values in the case of human rights concerns. Does that seem fair?

Cowper-Coles: That’s fair, and it’s a sensible conversation to have. But some of the rhetoric, even if it doesn’t say it explicitly, implies that there should be absolute minimum economic engagement with a people and a civilization and an economy that matters enormously to the future of the world.

It’s not just that China buys our goods. Many of the technologies of tomorrow, China has today. Look at battery technology or autonomous mobility or high-speed rail, in certain areas, China has not only caught up with the West, but overtaken it. And we gain from access to Chinese technology. That’s one of the things that worries America, and that’s why it is such an important relationship—we just have to manage it in an intelligent way.

The prime minister [Boris Johnson] has said repeatedly that he’s a passionate Sinophile. He and his family understand the importance of this relationship. We’ve just got to manage it in the British interest. Ordinary voters may be skeptical of China in general or on particular issues, but when you point out the economic benefits to Britain in terms of jobs and infrastructure and engagement from this relationship, they then agree that it is a relationship that should be managed positively.

How can the leader of a country whose parliament has accused the Chinese government of genocide later advocate for closer engagement with Beijing? It’s a contradiction that appears increasingly untenable.

Cowper-Coles: I understand what you’re saying, and I fervently hope it’s not the case because neither side would gain for that. I have plenty of experience in the Foreign Office of managing relationships with countries where we did have profound disagreements, but we managed to find a way through of keeping the overall relationship on the rails. It’s what the wily old Chinese premier and foreign minister Zhou Enlai (pdf) said: Always seek common ground while acknowledging differences. That’s exactly what we need to do.

Parliament also voted in favor of a diplomatic boycott of the upcoming Beijing Winter Olympics. Where is the middle ground on an issue like that?

Cowper-Coles: I don’t know. That’s for politicians. I’m in favor of engagement and that’s where it should end up.

Nobody should pretend this is an easy relationship at present time. There are difficulties at both ends, including in the West, where the rise of another power that isn’t just great in military terms, but is great technologically, is rather well governed in many respects, is confident in many ways—for people who’ve been founded on the idea that they’re always best and their country is best and no other country can be better, it’s quite a psychodrama.

As Mike Bushby said all those years ago, China matters enormously. You don’t have to agree with everything it does, but in the great sweep of history and in the interests of the people of the UK and the people of China, it is always far better to engage.