Three years ago, the UK’s relations with China were in a deep freeze. After British prime minister David Cameron met with the Dalai Lama in London, an angry Beijing cancelled meetings and generally put the brakes on greater cooperation with Britain.
Looking to repair the relationship, Cameron visited China in 2013, Chinese premier Li Keqiang returned the favor in 2014, and last month British finance minister George Osborne criss-crossed China signing investment deals. “We need China to power our economy forward,” Osborne said in Shanghai.
This charm offensive culminates with a state visit to the UK by Chinese president Xi Jinping this week, at which London is pulling out all the stops. A slew of deals are expected to be signed during Xi’s visit, including Chinese investments in sensitive British assets like nuclear power plants.
Osborne wants China to become the UK’s second-largest export market within a decade, making it as important to British companies as nearby Germany is today. This is not an idle wish—over the past few years, the UK has boosted exports to China by around 50%, much more than some of China’s other major trading partners:
And a similar pattern can be seen in Britain’s imports from China:
By some estimates, the UK is set to take in more than $150 billion in Chinese investment over the next 10 years. In return, Britain has relaxed visa rules for Chinese tourists, pledged to link the London stock exchange to Shanghai’s market, and generally smoothed the way for the Chinese to use British banks, buy British property, and send their kids to British schools.
But this push to become ”China’s best partner in the West,” as Osborne puts it, comes at an awkward time. Chinese economic growth is slowing and its financial markets are a mess. Britain’s perceived kowtowing to Beijing is also drawing criticism from its allies (paywall).