The fallout from the United Kingdom’s decision to include Huawei in the country’s 5G rollout rippled through the ‘Five Eyes’ intelligence alliance. Photo: Courtesy of RS Kingdom

Is China trying to poke out one of the Five Eyes?

In the past three months, the special relationship between the United Kingdom and the United States has become increasingly strained.

Rising investment in the UK from Chinese companies and the decision by the British government to include controversial high-tech heavyweight Huawei in the country’s 5G rollout have increased tensions between London and Washington.

The fallout has even rippled through the intelligence alliance of Australia, Canada, New Zealand, the UK and the US known as the “Five Eyes.”

In a warning aimed at the UK and other Nato allies, the US Defence Secretary Mark Esper underlined the perils of using Chinese technology in the shape of Huawei at last weekend’s Munich Security Conference.

“If we don’t understand the threat and we don’t do something about it, at the end of the day it could compromise what is the most successful military alliance in history – Nato,” he said.

Yet Esper’s rebuke was mild compared to the verbal volley unleashed by US Senator Lindsey Graham, an ally of President Donald Trump.

Making it perfectly clear that the UK risked “burning bridges” if it decided to go with Huawei in launching superfast 5G digital links, he did not mince his words.

“The one thing you need to get is that politics back home [in the US] is about as screwed up as I have ever seen it. What do we agree on? That Huawei technology is a threat to the US and, we really think, to the world order,” Graham told a media briefing.

“Nancy Pelosi [the Democrat House speaker] and Donald Trump are not going to have many dinners together, but if you ask them about the British purchase of Huawei they will give you the same answer. We are very firm in our commitment – Republicans and Democrats – that if you go down the Huawei road you are going to burn a lot of bridges,” he added.

UK Prime Minister Boris Johnson has tried to dampen down the flames by insisting that Huawei will be closely monitored and banned from core parts of the telecom system and sensitive sites, including nuclear and military facilities.

But that has failed to placate Trump, who was reported to be “apoplectic” after hearing that the Conservative party leader had agreed to let in Beijing’s high-tech “poster child.”

“Donald Trump has instructed me to make clear that any nation who chooses to use an untrustworthy 5G vendor will jeopardize our ability to share intelligence and information at the highest level,” Richard Grenell, the US ambassador to Germany, said on Twitter in a veiled threat about Downing Street’s decision.

Apart from the UK, the European Union’s two major economic powers, Germany and France, are looking at including Huawei in their 5G plans. But they are not part of the “Five Eyes” community. Australia is and has “stood firm” in blocking the Chinese telecom group, as well as expressing anger at the UK’s stance.

US Defence Secretary Esper has already claimed that Huawei is “China’s poster child for its nefarious industrial” policy, a strategy “fuelled by theft and coercion and the exploitation of free-market, private companies and universities.”

Secretary of State Mike Pompeo has even called the company a “Trojan horse for Chinese intelligence.”

Naturally, those allegations have been categorically denied by both Huawei as it peddles its low-cost 5G equipment around the world, and, of course, Beijing. 

For potential customers such as the UK, economic considerations can trump political ones, particularly in the age of Brexit and the nation’s departure from the EU. After all, the special relationship can at times look anything but special.

Coined by former Prime Minister Winston Churchill during a speaking tour of the US in 1946, the term was used to ease Britain’s end of Empire malaise after World War II. The great orator quickly realized that the UK was the junior partner and the real power lay in Washington.

Since then, there have been high points, such as the Ronnie and Maggie mutual admiration society and the odd couple of Tony Blair and George W Bush.

Unfortunately, Trump and Johnson sound more like a soap advert than a political partnership.

Again, it comes down to economic priorities in the post-Brexit era for the UK as it balances trade talks with the US with the direct investment from China and access to a market of nearly 1 billion consumers.

Last week, a telephone tête-à-tête between Johnson and President Xi Jinping covered a range of subjects, which included battling the coronavirus epidemic to climate change and stronger business ties between the two countries. 

“It is not that China anticipates less economic damage to Britain as a result of Brexit, but rather that it sees itself better placed to take advantage of the UK and Europe’s [or the EU’s] resulting weakness,” a report by the European Council on Foreign Relations, and entitled China and Brexit: What’s In It For Us, pointed out last year.

“Chinese scholars expect that Brexit will weaken the EU’s position on its own values, leading to a softer European posture on Chinese human rights abuses. Economic competition between the UK and EU for Chinese investment is also seen as likely to lead to better terms for Chinese companies.”

Between January and August of last year, non-real-estate-related FDI from the world’s second-largest economy into the UK hit an estimated US$8.3 billion compared with $6.1 billion for 2018, Deloitte, the London-based accountancy and consultancy, stated.

But, perhaps, the headline news that the China Railway Construction Corporation was desperate to be involved in HS2 set up a potential diplomatic train wreck.

The high-speed rail link will run from London to Birmingham in the Midlands and on to northern cities such as Manchester and Leeds. Already the project has ballooned to a reported £100 billion ($1.3 billion) with a completion date of 2035.

Still, China’s state-owned CRCC promised in a letter to complete the line in five years and at a much lower cost, according to the Financial Times. Yet even Johnson’s government has raised a skeptical eyebrow about the feasibility of that scenario.

“They don’t have our planning [permission] system, they don’t have our legal system, they don’t have to respect people’s property rights in the same way. I really want to get this thing built faster if it is possible. But when you look at what is required, the contracts that need to be [signed] and so on and so forth – it is an enormous project,” UK Transport Secretary Grant Shapps said.

“You are not going to build it in five years,” he told the BBC.

Tom Tugendhat, the chairman of the Foreign Affairs Committee at Westminster, went even further when it came to Beijing’s involvement in the British economy. 

“What is it that we want out of China? Have we decided to take back control from Brussels [by leaving the EU] just to hand it over to Beijing? The idea that we should allow others to act as we did in places like India and Nigeria for the best part of 200 years here in the UK would be extremely questionable,” he said.

“The reason why Chinese projects in China are very often so quick is that they don’t worry about such minor matters as planning consent or workers’ rights,” Tugendhat added.

Or the gaze of the “Five Eyes.”

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now.