Boris Johnson has ordered diplomats to launch a new drive against Chinese ‘expansionism’ after Beijing was accused of placing pressure on Barbados to remove the Queen as its head of state.
The island is one of dozens of countries which form part of China’s ‘Belt and Road Initiative’, under which Beijing lends money to poorer countries to help them to fund critical infrastructure projects such as ports and high speed rail lines.
With China able to seize control of the finished project if the countries default – and frequently demanding preferential terms in trade deals as a condition of the loans – it has led to what one No 10 source described as a ‘Chinese chokehold’ over much of the developing world.
Mr Johnson, who fears that the economic damage caused by Covid-19 will make countries even more vulnerable to domination, is to demand that China is more ‘transparent’ about its financial dealings with other countries.
Boris Johnson has ordered diplomats to launch a new drive against Chinese ‘expansionism’ after Beijing was accused of placing pressure on Barbados to remove the Queen as its head of state. Pictured: Chinese President Xi Jinping with Queen Elizabeth II at a state banquet at Buckingham Palace, London, during his state visit to the UK in 2015
Barbados, which gained independence in 1966, announced last week that it would become a republic in 2021: Governor-General Dame Sandra Mason said that ‘the time has come to fully leave our colonial past behind…Barbadians want a Barbadian Head of State’.
US intelligence, which has been shared with the UK, has indicated that pressure was brought to bear on Barbados by its Chinese paymasters to cut their colonial ties.
Tom Tugendhat, Tory chairman of the Foreign Affairs Committee, says that the incident showed how the Chinese are ‘tying new nations into their own imperial order’ by deploying ‘debt diplomacy’.
Writing in today’s Mail on Sunday, he says: ‘Barbados may be the latest trophy in Beijing’s imperial string of pearls…the Great Game has given way to the Great Gamble as countries are taking loans from Chinese state banks and betting they can pay them back before the default clauses come due.’
A No 10 source has described China’s ‘Belt and Road’ initiative as a ‘chokehold’ on the developing world
He adds: ‘We should remind our Caribbean cousins that a constitutional monarch, particularly under our peerless Queen, is the best defence against tyrants.’
Figures seen by the MoS have revealed for the first time the true scale of China’s reach over poorer countries, with money owed to China accounting for nearly one third of some countries’ GDP.
Pakistan is top of the list of recipients, with Islamabad owing China a total of £27 billion. The most leveraged country is Cambodia: the £5 billion it owes accounts for 29.5 per cent of GDP.
Other major recipients include Laos, with 26.1 per cent of GDP, Zambia with 23.4 per cent, Ethiopia with 17.7 per cent, and Belarus with 13 per cent.
Mr Johnson’s new drive marks a sharp change of policy from previous Tory Governments: Theresa May’s Chancellor, Philip Hammond, pushed for Britain to fully endorse China’s global investment drive.
A No 10 source said: ‘As coronavirus devastates developing countries, many are finding themselves in a Chinese chokehold as a result of the huge debts they owe’
Mr Hammond complained recently about an ‘outbreak of anti-Chinese sentiment’ in the party after Tory MPs objected to technology firm Huawei being given a key role in building the UK’s 5G network.
And in 2017, the year after leaving Downing Street, David Cameron announced that he was helping to set up a $1 billion ‘UK-China Fund’ ‘to seek opportunities for co-operation between the two countries in technology’.
A No 10 source said: ‘As coronavirus devastates developing countries, many are finding themselves in a Chinese chokehold as a result of the huge debts they owe.
‘The Belt and Road Initiative is an expansionist Chinese Marshall Plan – for instance Beijing is funding a high speed rail line in Laos which is costing the equivalent of more than a quarter of the country’s GDP.
‘China is doing this in the least transparent way – providing high-interest and unsustainable loans collateralised against countries’ natural resources. They are in danger of being forced to sell out future generations to meet their present debts.’
The source added: ‘As a member of both the UN Security Council and G20, China needs to step up to its obligations and end its chronic lack of transparency.’
Charlie Robertson, the author of The Fastest Billion: The Story Behind Africa’s Economic Revolution and an expert on Chinese ‘debt diplomacy’, said: ‘China is doing what Britain did in the Victorian era – exporting its savings to other countries as an exercise in global domination.
It has inevitably led to conspiracy theories about China hoping that the countries will default so they can seize critical infrastructure.’
TOM TUGENDHAT MP: Beijing wants to do with loans what the Soviet Union failed to achieve with tanks
By TOM TUGENDHAT, CHAIR OF FOREIGN AFAIRS COMMITTEE FOR THE MAIL ON SUNDAY
Around the world, the Communist rulers of China are planting flags with the speed of a Victorian adventurer claiming lands and seas that others once thought their own or neutral.
Using debt instead of gunboats, the Chinese are tying new nations into their own imperial order.
It looks like Barbados may be the latest trophy in Beijing’s imperial string of pearls.
Last week, the island announced that, after nearly 400 years, the monarchs of Great Britain would no longer rule over them. Not that this Queen ever really did.
Chinese President Xi Jinping with the Duchess of Cambridge and Queen Elizabeth II at a state banquet at Buckingham Palace, London, during the first day of his state visit to the UK
As a constitutional monarch, Queen Elizabeth has never exercised any power over the 300,000 inhabitants.
Barbados is, and has been for decades, an independent constitutional realm and a democracy in the Commonwealth.
So why the change? What has triggered the Barbadians to find a new head of state and end the symbolic rule of the world’s most respected head of state?
If there’s one thing we know for certain, it’s nothing the Queen said or did that triggered the change. In fact, it’s nothing the British Government did either.
The move we’re seeing has everything to do with a new scramble for power. The Great Game has given way to the Great Gamble as countries are taking loans from Chinese state banks and betting they can pay them back before the default clauses come due.
The Queen and Prince Philip bid farewell to Chinese President Xi Jinping and his wife Peng Liyuan at Buckingham Palace in 2015
Ports, stadia, roads and railways are being built on the never-never with the firm expectation that the loan will never be called in.
But like the Pied Piper, the lure of free money is masking a hidden agenda – this isn’t about development, it’s about domination.
Around the world, we’re beginning to see the real cost of cheap loans. It’s true the Sri Lankan government weren’t asked to abide by any good governance principles when they signed for the loans that built the port at Hambantota, as more principled lenders might have demanded. But that didn’t mean the money came without strings attached.
Unlike a World Bank loan, or UK development aid, there was no renegotiation when they defaulted. It triggered immediate repossession. China secured a 99-year lease on a major Indian Ocean harbour.
The same has happened in countries around the world as debt is cheaper than gunpowder – a Chinese invention, of course – and much more effective. Chinese bankers and their cheap cash loans are doing the work once carried out by Royal Navy officers and company men on sloops and frigates sailing out of London and Amsterdam.
Queen Elizabeth ll inspects a guard of honour as she arrives in Barbados on October 31, 1977
There’s no shortage of flattery, of course. Last year, Prime Minister Andrew Holness of Jamaica signed up to Beijing’s Belt and Road Initiative – a series of vast infrastructure projects financed with Chinese cash – and was given the all-star treatment at the Shanghai trade forum.
A few years earlier, it had been Freundel Stuart’s turn. Barbados’s then prime minister signed up to the scheme, known as the new silk road, and even discussed co-operation with the People’s Liberation Army.
China is attempting what the Soviets failed to achieve with guerrillas and revolutionaries. They’re trying to rewrite the global operating system. And they’re succeeding. International co-operation from trade to technology doesn’t just happen, it’s organised.
Groups with dreary names meet in dull rooms to discuss regulations for everything from the wavelengths of radio communications to the naming of websites. It’s not exciting but it matters.
Chinese President Xi Jinping with the Duchess of Cambridge at a state banquet at Buckingham Palace, London
Until now, this has been based on principles that we wrote. British lawyers, insurers and bankers were the inky lifeblood of the empire and the rules they scribbled underwrote global trade.
Their principles of individual rights, privacy, and the rule of law they encoded into our way of life still dictate the way we work. China’s Communist rulers have taken against such principles, and the international rules-based order they make possible.
Beijing’s new colonists have no time for independent actors on the world stage, seeing central control as the key to success. And that’s a challenge to us all. Because it’s not just those who have agreed to bow to the new Emperor who will live with the change.
We are all under the shadow of a new throne. China is looking to replicate its own repressive system of internal command and control on a global scale. Just as their 34 provinces (35 with Taiwan) must obey the rules of the General Secretary of the Communist Party, so the new ‘colonial’ outposts must vote as directed too.
In just a few years, China has gone from leading one UN agency to four – and their decisions are being felt.
Take the case of one of them, the 155-year-old International Telecommunication Union.
This recently discussed moving away from the Western ‘distributed network model’ for the internet, over which the state has little power, to one based around capital cities around the world – reflecting the authoritarian outlook of its Chinese Secretary-General Houlin Zhao.
India is in no doubt what all this really means – Chinese princes are threatening their borders once again. And we should wake up, too. So, what should we do about it? How do we avoid another imperial clash or – worse – conquest?
The Queen pictured with Governor-General of Barbados Dame Sandra Mason at Windsor Castle in 2018
We can learn from our past. Just as we built the biggest empire the world has ever known, we dismantled it too.
We know that the principles we encoded into the post-war treaties and institutions have helped nations to succeed and determine their own futures.
They prevented Soviet expansion and helped bring about the longest period of peaceful global growth in history. We can do that again.
We need to bring people together under the rule of law and the principles of individuality, sovereignty and freedom.
And if we’re going to disentangle China’s debt traps, we’ll need generous support for real projects, and we’ll have to stop corrupt profits – and those who control them – from hiding in British jurisdiction.
Foreign policy, from the Indian Ocean to the Caribbean is not just about foreigners. It’s also about us and protecting our values and interests. It’s also about remembering what matters and letting our friends know we care.
Today, in Bridgetown, Barbados we should remind our Caribbean cousins that a constitutional monarch, particularly under our peerless Queen, is the best defence against tyrants that we know.