Britain already has a free trade deal with China, leaving Europe won’t improve it
Between 1839 and 1841 and then again between 1856 and 1860, the British Empire launched a series of military engagements against China. The cause? A trade imbalance between two of the biggest superpowers in the world.
Demand in Britain for Chinese goods including silk, porcelain and tea was huge. It created an enormous trade imbalance between Britain and China.
British silver flowed into the Qing Empire as a result but the Chinese limited the extent to which British trade could penetrate the country to the south, and specifically the southern port city of Canton.
The British didn’t like this, so came up with a novel solution to redress the trade imbalance.
The East India Company used narcotics – specifically opium – to become the world’s first international drug dealer.
So successful was it in selling opium to foreign traders in India who transported it overland that it reversed the Chinese trade surplus, drained China’s economy of silver, and increased the number of opium addicts inside the country, all of which worried Chinese officials.
War followed and China was forced to open up more of its ports to British trade vessels. It was also forced to cede a rocky island off its coast in perpetuity – later known as Hong Kong.
No gunboats this time round
Trade negotiations are somewhat different today. Britain’s Theresa May last week spoke of a golden era in Anglo-Chinese relations.
The three-day trade trip to China was supposed to demonstrate how Britain will be able to forge trade deals with the world’s largest economies post Brexit.
But Britain already trades freely with China. In September, China General Nuclear was reported to be one of several interested parties likely to buy an equity stake in Cumbria’s £15 billion NuGen site
And let’s not kid ourselves £9 billion of commercial deals, hailed last week as evidence of the relationship between Britain and China, are a drop in the ocean in global trade.
Moreover, everyone is courting China at present. French President Emmanuel Macron visited Beijing a fortnight ago and brought Chinese President Xi Jinping an eight-year-old gelding recruited from France’s presidential cavalry corps, called Vesuvius.
In contrast, Mrs May presented the Chinese President with a DVD of the BBC documentary Blue Planet 2 signed by David Attenborough.
Given the Chinese love of grand gestures it would be fairly easy to surmise which gift Xi Jinping preferred.
A special relationship? For Britain maybe, but not Beijing
Meanwhile, quite why anyone would think Britain would get a better trade deal with China outside of Europe mystifies professional trade negotiators.
The sums simply don’t add up. Why would a market of 1.4 billion people give preferential treatment to a market of 65 million people?
The answer to those trade professionals is simple: it wouldn’t.So, while Theresa May talks tough on EU citizens’ rights and talks up Britain’s ability to strike free trade deals outside of Europe, remember this.
The Chinese have long memories and contrary to what we might think, they haven’t quite forgiven us for the Opium Wars yet. Building a free trade deal with China could prove harder than Mrs May thinks.
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