Last week the British political establishment was shaken by a rare MI5 alert warning of a Chinese party-state agent operating in parliament. Christine Lee, who, according to MI5, has engaged in both overt and covert activity in support of the Chinese Communist party, cultivated links to British politicians for more than a decade (the Chinese embassy in London has denied these claims).
It’s tempting to consider this revelation as yet another sign that we are entering a new cold war. In fact, the international landscape differs radically from the power struggle that defined the period after the second world war. To be sure, the world of spying and espionage still exists, but the current relationship between liberal democracies and authoritarian states is more like a phoney peace. Globalisation has entangled these opposing political regimes in complex and, at times, contradictory ways.
The political culture built around the ruling party in China centralises power in a way that would be inconceivable in the UK. The CCP boasts an astonishing reach into myriad aspects of society as well as retaining an armed wing in the form of the People’s Liberation Army. At the same time, some British and international businesses now depend on access to Chinese markets, and appear willing to do whatever Beijing demands in order to sustain their presence in China. The global economy is not easily understood through the lens of the cold war, when these international links were present but far less developed. Today, supply chains and financial markets ensure nations are far more interdependent. If the cold war was defined by hostility short of direct military conflict, the phoney peace is an era in which interconnected nations are embroiled in growing hostility.
These new conditions produce new challenges. First and foremost, liberal democracies must address an increasing risk to Asian communities. As last week’s case in parliament demonstrates, scrutiny of Chinese party-state activity is necessary. But there is always a danger that legitimate concern could spill over into irrational suspicion. Australia is a case in point: the country has experienced a rise in anti-Chinese and anti-Asian sentiment in the wake of party-state-linked scandals such as that of political donor Huang Xiangmo. Any attempts to shore up resilience to authoritarian interference must begin by considering overseas Chinese communities, acknowledging that they are frequently targeted by the Chinese party-state.
One of the most prominent geopolitical hazards that liberal democracies now face is increasing dependence on authoritarian states. Britain’s decision to allow Chinese party-state involvement in the country’s civil nuclear energy sector is a useful microcosm of this wider situation, and it brings us back to Lee. While the decision to involve the Chinese party-state in Hinkley nuclear power station through a partnership with EDF was primarily financial, it was the first step to a Chinese-operated reactor on UK soil.
In my own PhD research, I found documents showing that at a UK-China energy summit held in 2014, the British government acknowledged to Chinese officials that Hinkley was a pathway to a “majority led Chinese new build project including the use of Chinese reactor technology”. This was set to be the Bradwell site, led by China General Nuclear Power Group, using the Hualong One reactor.
How does Lee fit into this picture? She has donated significant sums to Labour MP Barry Gardiner since the mid-2010s and has donated to his constituency office since 2009. Gardiner would play an important role in shaping the Labour party’s response to Hinkley as the official opposition. The Times reported that Gardiner “strongly opposed internal party criticism of Chinese involvement in the Hinkley Point project”, although Gardiner has said Lee gained no political advantage from him.
In February 2013, Lee made a single donation to the Liberal Democrats’ Kingston borough office, the constituency of Ed Davey MP, who, at the time of the donation, was the secretary of state for energy and climate change. Davey would play a vital role in securing the future of Hinkley, not least by almost singlehandedly convincing the Liberal Democrats to back nuclear energy. Davey says he does not remember Lee.
Yet Chinese party-state involvement in UK civil nuclear energy wouldn’t have been an option without support from the Conservative leadership, most enthusiastically from George Osborne. A year after the 2014 discussions, Osborne publicly asserted that Hinkley “opens the door for majority Chinese ownership of a subsequently nuclear project in Bradwell”.
Multinational and transnational corporations play a significant role in this new landscape. Their reliance on markets and manufacturing sites in authoritarian states makes them potential channels of authoritarian influence in liberal democracies. Additionally, the channels such groups have forged can be employed by authoritarian states. This was what happened in the Hinkley case.
The all-party parliamentary groups in Westminster represent one of these channels through which companies pay into the British political system. The China APPG, the Nuclear Energy APPG, and the Energy Studies APPG have all received sponsorship from French energy giant EDF – CGN’s partner in the Hinkley project. In addition, members of the Energy Studies APPG were taken to China by CGN to visit their Taishan nuclear power station at a cost of more than £52,500 to the Chinese party-state energy group. After the trip, the APPG’s chair, Ian Liddell-Grainger MP, reported back to parliament that CGN was working “hand in hand with EDF to develop as a major nuclear player, as well as develop its own reactors”. He said the Taishan power station was “very good” and “does the job”.
As well as providing CGN feedback, Liddell-Grainger also intervened when ZTE, effectively a Chinese state-owned technology group, was labelled a national security risk in official UK intelligence advice. The MP supported ZTE’s “Whitehall lobbying campaign”, backed by consultants from the PR firm Sovereign Strategy, according to reports at the time. Such links are not uncommon in British politics. Since we tolerate channels through which commercial interests can influence political actors, we shouldn’t be surprised to hear allegations that adversarial states such as China employ the same means.
The UK is not an outlier in this regard. Germany also risks greater dependence on an authoritarian state in the form of the controversial Nord Stream 2 project and the Russian gas it will supply. Predictably, here too we see some of the same patterns, most notably in the form of ex-chancellor Gerhard Schröder’s position as chairman of the Nord Stream AG shareholders’ committee, as well as chairman of the board of directors of Russian oil producer Rosneft.
Where cold war conditions generated energetic discussions about ideology and military activity, the phoney peace demands that we pay greater attention to transparency and accountability. Growing scrutiny of British engagement with the Chinese party-state reminds us that better regulation of political donations and revolving-door appointments is not just good governance – it is a matter of national security.