China has been silently rooting for Britain to stay in the EU. Until this past month, Beijing kept a low profile concerning Brexit but it now realizes that it has an important stake in the economic consequences of a “leave it” vote and it has come out in strongly in favor of the UK remaining as a member of the international organization.
Relations between Britain and China have been warming up over the past few years and there have been increased economic connections. China has turned to London for help in developing its financial markets and regulation, and Britain has sought Chinese investment in fields such as power and high-speed rails.
Yao Ling, deputy director of a research center under the Commerce Ministry admitted in a May interview that China was using Britain as a bridge into the EU's 27 other nations and that if Britain leaves the EU, that bridgehead would collapse.
China understands that if the UK ends up with a Brexit, it would be unable to negotiate more favorable access for European companies to China’s Market and it has been making a discrete push in the media for voters to understand the potential economic and financial consequences of a British exit and why they should select the “remain” button at June 23rd’s referendum.
Some analysts have argued that leaving the EU would create more of an opportunity for the UK to negotiate its own trade deal with China, based exclusively on UK, rather than EU interests. Critics of this view, however, point to the relatively small size of the UK market and warn that China may end up more concerned about negotiating with the EU rather than the UK unless it receives more favorable terms from London than can be secured through the EU.
Why Now?
China and Britain have not been the on the best of terms, with a history of disputes over human rights and the future of former British colony Hong Kong. So why is Beijing jumping into the Brexit debate now?
Analysts point to China as being economically pragmatic and Britain has been a prominent supporter of China in the EU especially regarding China's push for market economy status and free trade, something the country needs in order to import into the bloc and defeat protectionist measures.
Last year alone Europe accounted for 600 billion dollars in two-way trade between the two entities. A Brexit risks disrupting and weakening the existing connection with European market by eliminating one of the main players in finance, services and high tech. Chinese investors and business people will have to look elsewhere for entranceways to the greater European market.
Another reason for China abandoning it neutral position on Brexit at this time is that it firmly believes that the UK gets more from being in the EU than out of it and Beijing is willing to take a firm stand on the matter. China takes its own sovereignty very seriously but believes that in certain circumstances-such as those at issue in the UK at the moment—it is worth a country compromising on its autonomy.
In fact, since 1970 with the fall of Maosim, China has taken many steps to emerge from diplomatic and economic isolation, joining the United Nations, the World Trade Organization, the International Monetary Fund, and other entities. It has made these moves because it concluded that pragmatically it is better to be inside than outside such systems.
That is why Chinese leaders are left wondering how Britain would opt to divorce itself from the EU rather than remain a member, as it would leave it with no influence in and no way to shape or change the world organization. China understands the importance of defending national integrity and sovereignty and regards the UK’s potential choice to leave the EU as self-destructive and untimely.
With only 18 days left before the people vote, China has decided to break its silence and come out strongly against what it considers a truly imprudent decision.