The Lowdown Hub

Thatcher would never have backed sanctions against delinquent China

On the whole, we do not ban countries simply because their regimes don’t share the same liberal values as our own.


Whatever you might otherwise think of the new series of the Crown, there is one rather good episode concerning Margaret Thatcher’s standoff with the Queen over attempts by Commonwealth leaders to impose economic sanctions on apartheid South Africa.

The depiction of an intransigent Thatcher stubbornly refusing to sign off on whatever form of words the Commonwealth came up with is historically entirely accurate, unlike large parts of the rest of the series.

Thatcher was no lover of apartheid, but she didn’t believe in sanctions as an appropriate way of fighting it. In her view, they were a crime against the greater good of free trade, and would only succeed in making everyone in South Africa, not just the whites, poorer.

I wonder, then, what she would have made of the growing chorus of calls for action against China, whose apparent abuse of the pro-democracy movement in Hong Kong and of ethnic minorities in the northwestern province of Xinjiang, nevermind the regime’s mercantilist manipulation of the West’s free-trade norms, might indeed justify the imposition of sanctions.




No one can of course know the answer to that question, but I doubt she’d have been in favor of complete commercial disengagement of the sort the Commonwealth was demanding in regards to South Africa.

If we were to apply western standards of human rights, and of free and fair competition, universally to all countries, then we would end up trading with no one at all beyond a small clique of like-minded democracies. To judge by the “level playing field” demands of the EU in Brexit negotiations, even that might be open to question.

To digress, it is completely absurd that with divorce talks running out of the road, the EU and the UK might end up trading on the same, minimalist WTO terms with each other as they do with China. We are already about as level as any two jurisdictions are ever likely to be, with very little chance of significant divergence.

Britain has some of the highest environmental, labour market, human rights, and state subsidy standards anywhere in the world. To be reduced to the same status as sweatshop China in our trading relationship with our nearest neighbors defies all logic. Sadly, that may be where the talks end up.

Europe is one thing; no doubt the two of us will eventually learn new forms of accommodation. China is, however, a different matter altogether; is it not time to take a stand?

The arrest on trumped-up charges of pro-democracy activists in Hong Kong and the increasingly contemptuous abuse by China of the former colony’s “one country, two systems” treaty is provocation enough; this week’s revelations over the treatment of Uighur minorities stretches to virtual breaking point the idea that in the interests of commerce we should all just hold our noses and just suck it up.

On the whole, we do not ban countries simply because their regimes don’t share the same liberal values as our own



We’ve known about the use of what are in effect concentration camps to intern and “re-educate” Uighurs in China’s Xinjiang northwestern province for a long time now. This is chilling enough. What’s new is the allegation that hundreds of thousands of ethnic minority laborers are also being coerced into the fields to pick cotton by hand, a forced labor initiative justified as part of China’s “poverty alleviation” program.

China dismisses the claims as “a complete fabrication”, yet the evidence of enslavement cited by the Centre for Global Policy, a Washington-based think tank that promotes US foreign policy goals, seems compelling. It appears that humans are being herded like cattle.

Whether these practices are in fact any worse than those applied by many Western multinationals in Asian jurisdictions where labor is cheap and expendable is an interesting question. Beijing would no doubt argue that its actions are no more sinister than providing employment to those who otherwise might not have it.

China supplies around a fifth of the world’s cotton, the bulk of it from Xinjiang. Even before the latest claims, the US had imposed a “Withdrawal Release Order” on cotton produced by Xinjiang Production and Construction, but this covers only a third of the province’s output. Western fashion brands are now furiously vetting their suppliers against cotton tainted by this week’s revelations.



In practical terms, there is not a great deal more that can be done about what China chooses to practice within its own borders. Britain’s days of gunship diplomacy in far off seas are long gone. Even the US would baulk at such action. Even so, the question has to be asked; are these the sort of people we really want to be doing business with?

In a perfect world, maybe not, but on the whole, we do not ban countries simply because their regimes don’t share the same liberal values as our own; only when a country poses a real and present threat would we choose to impose economic sanctions.

In any case, those Western interests already heavily invested in Hong Kong and mainland China have little option but to keep schtum and carry on.

Calls from Chris Patten, the former Hong Kong Governor, and Tory Party chairman, for HSBC to condemn the latest arrests in Hong Kong are naive. If the bank kicks against Beijing, it will simply lose all its Hong Kong and Chinese business, sacrificing tens of billions of pounds of shareholder value in the process. Such organizations must work with the world as it is, not as we would like it to be.

It may be a different matter for new Western investment in China, though as yet there is little evidence of any deterrent effect. Unlike its Western counterparts, the Chinese economy is now fully recovered from the Covid crisis and is apparently booming again.

For Britain and others, it is the only major export market to have shown any growth in the year to date. International investors have meanwhile returned in droves to its stock markets. Western firms such as Goldman Sachs and Blackrock are rushing to take advantage of the newly liberalized Chinese finance industries.

We condemn with one voice while quietly continuing to invest with the other. That goes for Hong Kong too, still regarded as an important gateway to the mainland.

I’ve therefore yet to be entirely convinced by the decoupling story. Covid has revealed huge weaknesses in Western economies, including a basic lack of resilience to shocks. Given this rude awakening, countries might be expected to seek greater self-reliance, including reduced dependence on regimes with which they do not agree.


Yet we do not see that in the numbers. When licensed, the Oxford University/ AstraZeneca Covid vaccine is widely expected to establish itself as a great British success story. Where do they expect to sell their product most? Why China, obviously.


Source: JEREMY WARNER

https://www.telegraph.co.uk/business/2020/12/15/thatcher-would-never-have-backed-sanctions-against-delinquent/