The China spy row has put investment-hungry Britain in a fix

Christopher Berry and Christopher Cash were once both linked to a teaching programme in Hangzhou, a city on China’s eastern seaboard. PA

Former British prime minister Tony Blair’s fundamental critique about Brexit was that, in a world moving into blocs of influence, the UK’s decision to go independent from the EU would force it to be nimble around the giant feet of others.

I think of this point in times of strain on the UK’s diplomatic position, particularly vis-a-vis China. This is one of those times, as a domestic row over alleged Chinese spying has exploded and could even undermine London’s attempts to reset its ties with Beijing.

From a global perspective, these two permanent members of the UN Security Council are clearly not aligned. On a bilateral basis, the UK would clearly like to open up as many commercial and soft-power opportunities as possible.

With the hanging threat of a debt crisis facing the UK government, Britain is a country that needs capital. Attracting interest from Chinese firms – many of them closely aligned with their own government – is a part-imperative, part-strategic necessity for the UK. Yet London keeps stumbling over its own domestic politics as it tries to attract the Chinese.

In that sense, the current situation is one likely to do long-term damage to the UK’s relationship with China. Always fragile, it is now deeply impaired.

The spying claims that culminated in the recent collapse of the prosecution case against Christopher Cash and Christopher Berry – accused of collecting insider information about UK politics and passing it on to a Chinese intelligence agent – have led to some bad blood between the two countries. China is known not to take lightly exposure in the public domain of anything that suggests a sinister or underhanded activity.

Where this goes will say more about what kind of international role the UK is carving out than almost any other issuing facing Keir Starmer’s government this year. Reuters

From what is known of the two men at the centre of the allegations, there is something that makes this case a natural product of how Britain has nurtured its ties with China since the start of this century. Mr Cash and Mr Berry were both linked to a teaching programme in Hangzhou, a city on China’s eastern seaboard. As well-educated Englishmen, they offered their services to a nation where the youth are encouraged to learn English and economics.

The trajectory of the Chinese economy since the Covid-19 pandemic has moved away from reliance on the type of exchanges that Mr Cash and Mr Berry were once involved in. There is a whole cohort of former China residents who once thrived in the field of business over there but who have since returned to the UK or moved on. There is also a churn among new generations entering China for the first time, not least from the hundreds of British schools that are teaching Mandarin.

On a people-to-people basis, relations between the Chinese and the British are more layered and complex than at any time since the height of the colonial era, if not ever. At a political level, however, it is black and white. The allegations around Mr Cash stem from his role with the Chinese Research Group – or CRG – a group of anti-Beijing Conservative MPs that included some who served in high office at the time.

This CRG was a product of Brexit. It was a useful platform for a number of former EU-supporting MPs to find a hardline cause that they hoped would chime with the grisly mood of the Conservative party’s grassroots. They were joined by some of the sovereigntists of the Brexit campaign, which had been propelled in Parliament by the similarly named European Research Group.

On a people-to-people basis, relations between the Chinese and the British are layered and complex. At a political level, it is black and white

The CRG’s emergence represented an important moment in British politics because it brought the argument around ties with China to the political frontline. As a replay of the Brexit playbook, it was never going to matter as much to the British public as the referendum that took the UK out of the EU. But as an entity within the elite-level of UK politics – particularly one that Beijing would, in its own interest, pay attention to – the caucus was significant.

This scandal could jeopardise the UK’s further opening to China. At a time when it needs vast investment in infrastructure, as well as nuclear and renewable energy, Britain’s outreach to China has been hobbled by this case and the separate failure to approve construction plans for a new Chinese embassy.

That campus would represent a significant statement by China, as it is on the site of the former Royal Mint in a prominent spot in London. However, objectors say it would offer Beijing all sorts of espionage opportunities. The UK government has put the embassy decision in the “too difficult” basket for now, leading the Chinese to warn of “consequences” for what it would see as a bad-faith act.

With the recovery of Gaza and potentially Ukraine on the agenda, there is a new dimension to how the UK and China work together. The British economy would certainly be boosted by Chinese interest.

Ultimately, where this goes will say more about what kind of international role the UK is carving out than almost any other issue facing Prime Minister Keir Starmer’s government this year.