Dr Shaun Breslin – China, its Impact on the Global Economy and the Implications for the UK

Dr Shaun Breslin is Professor of Politics and International Studies at the University of Warwick and Director of Studies at the European Hub for Contemporary China. Dr Breslin’s research focuses on Chinese politics, its economy and China’s relation to global dynamics. Dr Breslin is a Senior Fellow at the Wong Multinational Corporations Centre, an Associate Research Fellow of the Italian Institute for International Political Studies in Milan, and a Fellow of the Academy of Social Sciences. Much of Dr Breslin’s work concerns the intersection of political economy and interstate relations, such as China’s relationship with the UK and Europe, and countries’ responses. In this interview, we covered the UK’s current approach to relations with China, the nature of Chinese global ‘influence’ and changing systems of political economy in the contemporary world order.

What are some of the key activities through which China projects influence in Europe, and are they different to how China operates in other regions?

Here you’ve hit on a key question, and it’s important to distinguish between China deliberately doing things to influence other countries, and China doing things which have a secondary impact on them. There is obviously a level of espionage and direct influence, but I’m more interested in the indirect consequences of international economic interaction between China and Europe. Chinese economic actors have constrained agency; they are somewhat directed by the state but still practice a level of autonomy internationally. With SOEs there is clear influence, but for private actors the state creates conditions for their operation, while their primary drivers remain commercial. These private actors may have limited first-order impacts, but their second and third-order effects have significant world-ordering implications, shaped by how receiving states react.

In the article I co-wrote on Chinese influence in Europe, we examined these aggregated long-term impacts. In countries like the UK, it mostly involves private companies driving economic relations, and it’s not their direct impact but the overall effects on economic practices, and the potential future influence that could be wielded through them, which are more significant.

This relates to some ideas you expressed in ‘Chinese economic statecraft: An illiberal actor in a (more) liberal global economy’. Do you think this evolution of the global economic system has sped up in more recent years?

Yes, I think it has, but not all because of China; you also see it in Brexit and rising nationalism in Europe. In the 1980s we had neoliberal globalisation, and then the global financial crisis hit, creating the feeling that the economy was out of control of both governments and citizens. The ‘Take Back Control’ mantra from Brexit actually resonates beyond the UK, showing a wider desire to regain control of the economy.

China is an important part of this, because of how it embraced globalisation, creating uneven playing fields as it developed. Around 2015–2016 we saw the shift in how China’s ‘rise’ was viewed—from positive to negative—and we have to ask why. In this period, there was a boost in Chinese investment in Europe and North America, which tailed off by 2017. There was also the growing realisation that China would not be liberalised by inclusion in the global system, and that Xi Jinping’s regime was becoming increasingly strong. This led to fears about China’s growing role and its potential threat to countries like the US.

If you look at Chinese outbound investment, it was largely irrelevant until 2003, and until about 2013 mainly focused on its neighbourhood. I find 2015 interesting: you have the G20 Summit in Hangzhou, Made in China 2025, and the strengthening of the Belt and Road. This convergence bolstered European insecurities about control over their economies. Therefore, I think the shift reflects both an ideological move away from free markets and the increased securitisation of economic relations with China.

Do you think China is more of a challenge to Western countries in its contrasting economic model rather than its ideology or political system?

For the UK and Northern European countries, the challenge is primarily economic. I think there are three elements to the ‘China Challenge’. The first is the clear aspects; espionage, cyber security, all of those things I know little about. The second is the ‘ifs, mights and would-bes’; for example, if China banned exports of a critical resource, what would happen? This is one of the UK’s big challenges: could China in the future use its position to coerce states?

The third element is what I’d call ‘world order’ or ‘normative’ challenges. My view is that China is not trying to create a coherent alternative world order, but rather to prevent others from imposing their preferences on the rest of the world. They lead a coalition of the disaffected, pointing out flaws in the American-led liberal order and arguing for change. It’s unclear what China stands for, but clear what it doesn’t. More attention should be paid to how China builds coalitions to chip away at liberal normative power. You can see this at the UN, with Chinese language on human rights being adopted by other states.

Do you think the changing nature of the global economy is a fundamental shift away from the neoliberal status quo, or is it a limited change?

The Conservatives in the UK before the last election were talking about ‘industrial policy’, which would have been anathema to Thatcher’s government. There is a clear desire for states to regain control over the economy, but it’s difficult to do. Even when the UK’s stance on China was most hawkish under Truss and Sunak, UK-China trade barely changed. The framing of China as a ‘threat’ still hasn’t significantly altered economic relations, showing how hard it is for the state to coordinate the economy.

That said, maybe the neoliberal moment was the exception in how economies are governed. Peter Cocks’ article, Towards a Marxist Theory of European Integration, states that “capitalism needs to be both facilitated and seen as legitimate to function, and if not, there is a crisis of capitalism, not just in capitalism.” There will be ongoing attempts to regain control, but it’s very difficult to put the genie back in the bottle. Even countries like the US and China can’t do whatever they want; they must adhere to market forces to some extent.

Look at derisking—there was much talk about it, but few worked out what needed to be done and how much it would cost. These details aren’t really there, and much of it is more aspiration and rhetoric than concrete strategy.

What is your assessment of the UK’s current strategy towards relations with China?

I’d describe both the UK and Europe’s current approach as ‘post-peak panic’. Despite the issues, the UK needs a pragmatic, workable relationship with China. Some in China thought that after Trump, Europeans would move closer to China, which hasn’t happened, as the same concerns remain. Instead of meeting challenges head-on, European countries are seeking diplomatic solutions. You saw this with Rishi Sunak; he acted very differently towards China as prime minister than he talked during his leadership campaign.

That said, there has been a kerfuffle around the collapse of the alleged spying case in the UK, which has turned into a campaign by the Daily Mail and others. There will inevitably be spikes in concern towards China at times.

Has the UK’s diplomacy with China been overly contradictory or naïve in being idealistic and ignoring opportunities for cooperation?

The UK does need to stick to its position of principled opposition to aspects of China’s conduct. The UK has been critical of Chinese domestic politics, such as issues in Xinjiang, and when Cameron and Clegg met the Dalai Lama. Hong Kong is a special case, with questions about the legal status of agreements.

Much of this more outspoken I is a reaction to the Osborne doctrine, despised even within the Tory party. The loudest criticism of the Cameron years came from within the party itself. Since then, there’s been a move away from that I, seen as against ‘I values’ and ineffective at liberalising China. Whether the new policy is more effective, I don’t know.

Can states engage with China today to buttress multilateral cooperation despite fundamental differences?

It’s impossible for China to fill all the gaps left by the US. China has actually withdrawn somewhat from its global position, reducing commitment to things like the Belt and Road. However, there will be rhetorical claims of moral high ground, as seen in 2023 with Xi Jinping. I don’t think China has an appetite to be a world leader; it just wants an order that lets its government control China as it wishes. It seeks to lead in specific areas and chip away at the status quo. As China faces domestic challenges, there may also be a turn inward, with more focus on internal problems.

Without China or the US as leaders of a ‘new multilateralism’, how would countries be organised in a future world system?

I don’t think the system will be ‘polar’, because that suggests states in one pole are repelled by others. We live in a world where Chinese and Indian soldiers can kill each other but their leaders cooperate on global financial governance. Brantly Womack writes about a ‘multimodal system’, governed by shifting interest groups, which is a more convincing model. David Mitrany’s approach, though flawed, is also useful; thinking about functional constellations of power could be viable.

Something interesting today is China’s exporting of its professedly ‘unique’ development model through institutes like Peking University’s Institute of South-South Cooperation and Development across the global south. Ten years ago, China told other states not to copy its strategy but to find what suited them; now it advocates for applying China’s model directly to their own systems.

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