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MS - 10: Ending the Chinese Trade War

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Mr. Speaker, 

As Prime Minister, my chief obligation is to promote the safety and security of the British people. No Government has any greater responsibility; it is fundamentally the chief priority of any Government to ensure that the people it serves are safe and free from malign influence. That is why, from the moment I was elected, I set off on implementing an agenda that would eliminate our reliance on foreign dictators that seek nothing but the destruction of democracy.  And since then I have delivered on that promise, bucking the status quo and taking aggressive action to confront our adversaries and acknowledge certain foreign governments as the true threats that they are. 

For too long, British governments on both sides of the aisle have been asleep at the wheel when it comes to the threat posed by the Chinese Communist Party. It is long past time that Britain wake up and face reality, and as Prime Minister I am determined to effect that necessary national awakening. 

There are many politicians, including a few in my own party, who misunderstand the threat that the CCP poses and are still under the impression that this is a government we can work with. There are some who describe my strategy as engaging in mere, "political arguments with Beijing." I do not share this view. Our relationship with the CCP is a question of values, and a test of our resolve as a free people. There are some matters upon which we as a nation cannot compromise, no matter the price tag. Democracy is one of those matters. It is my contention that allowing the status quo to continue to go unchecked amounts to a threat to our democracy here at home, and destroys our credibility as a power for democratic reform abroad. 

That is why one of my first acts as Prime Minister was to aggressively reduce Chinese influence in our country and meddling in our economy. While some call it rash, I call it necessary. There is no time to waste; bold, determined, immediate action was needed or we risked once again finding ourselves complacent and paralyzed in fear. This was not a time for deep consultation or longwinded reviews; we've had those, and they've been ignored. Now was the time to act, and act we did. 

In response to our policy changes, China launched a brazen Trade War with the intent to inflict massive economic harm in the hopes of intimidating us into reversing course. Their response serves only to underscore the Government's argue against the CCP: this is not a regime interested in working with Britain, but one determined to subject all foreign nations to their influence and campaign of fear. The CCP ordered massive tariff increases, to the great expense of their own economy, because they wanted to send the message that even free, democratic nations, are not safe to speak candidly about the flaws of the Chinese Communist system. 

The people of the United Kingdom, of course, would not be used as a messaging opportunity. The CCP blinked, reversing their original decision to ban the importation of British cars, and agreeing to hold negotiations in order to deescalate and resolve the Chinese Trade War. The British negotiating team went into these negotiations with the clear understanding that our country would not back down, we would not reverse course, and we would not be prevented from acting in our national interest to protect our people. As a result of their work, and a result of the diplomatic skill employed by our former interim Chancellor of the Exchequer, the British and Chinese Governments have agreed the following terms: 


Memorandum of Limited Understanding Between the United Kingdom and the People's Republic of China

After frank but polite discussions, the British and Chinese governments recognize the mutual prosperity gained via targeted cooperation where shared economic interests directly align. We will be abiding by our mutual international trade agreements, averting any increase in tariffs announced or export bans, and at a time of global economic turmoil we will support one another's continued prosperity.

1. The People's Republic of China will immediately roll call the previously announced tariff increases.

2. The United Kingdom will implement a 1 billion pound tax exemption on specific industries to promote bilateral trade opportunities between British and Chinese businesses.

3. The China General Nuclear Power Corporation agrees to dispense with their share in Hinkley Point C for 6 billion pounds. The United Kingdom and People's Republic of China commit to engage in good faith negotiations in regards to the proposed divestment of other Chinese firms in Britain's nuclear energy infrastructure.

4. In order to recognize outstanding issues relating to Confucius Institutes operating in the United Kingdom, the British Government will provide give each relevant university the independent opportunity to decide, within the next calendar year, whether or not they will sever their partnership with the People's Republic of China.

The agreement, which I have provided each of you with a copy of, is the full, total, and final text of the agreement reached between the United Kingdom and the People's Republic of China. Rather than leak details to the media, or argue about its contents on Twitter, I wanted to speak directly to Parliament and provide the full and unfettered details of the agreement here. This agreement represents a massive economic, diplomatic, and security win for the United Kingdom. It ends the increased tariffs on British industry, namely automakers and whisky distillers. It ends Chinese influence over our nuclear energy infrastructure, and reduces China's original asking price for their share in Hinkley C by billions of pounds. And it ends the imminent security threat posed by Huawei, protecting the individual freedoms and privacy of the British people. 

As has been reported, the two negotiating teams reached an impasse over the Government's decision to ban the 30 Confucius Institutes currently operating throughout the United Kingdom. As this country's Prime Minister, I could never and will never sanction a deal that sees taxpayer money handed directly over to the Chinese government. This Government would never support sending 50 million pounds to the Chinese Education Ministry, knowing full well that this money would only serve to promote the CCP's educational indoctrination campaigns in Tibet and Xinjiang. We will not be asking British workers to fund the systematic elimination of ethnic Muslims and Buddhists.

At the same time, it would have been irresponsible of me to hold up a deal that ends the trade war, saves our country one billion pounds, and enhances our national security on this issue alone. As a result, the Government has agreed to compromise with the Chinese, and allow each British university operating a Confucius Institute to choose for themselves within the next year whether or not they will follow the Government's advice to close these facilities. I think the whole country knows exactly where I stand on this matter, and what I hope each university will do. 

My critics, namely those in the Labour Party who were more than happy to repeat the CCP's talking points designed to divide Britain, said that the Government's agenda would never work. They told us that we couldn't be honest with people about the threat posed by the CCP to the British people. And even if we somehow managed to do that, they told us that we certainly couldn't act on those concerns. And even if we said that the CCP was harming Britain, and even if we managed to implement policies to reduce the harm caused by the CCP, Britain would certainly never manage to stay the course and would have to embarrassingly cave to Chinese demands! Never, they posited, could Britain overcome the might of Communist China. 

Well, I have news for them, Mr. Speaker. The Government I lead told the British people we were going to counter the influence of the Chinese Communist Party, we implemented policies to do so, and we refused to waiver when the Chinese attempted to crush our spirit. Unlike them, I never doubted the tenacity of the British people, Mr. Speaker. Unlike them, I never doubted that we would remain the united in the face of a foreign threat, as we have time and time again throughout nations history. And unlike them, I knew that our island nation would prevail, because our cause is just and our aims are pure. On the day I became Prime Minister I urged the country to step boldly into the future without fear or hesitation. We are building that new future, Mr. Speaker, and no foreign dictator will intimidate us into turning back! 

I commend this statement to the House, and thank the British people for the honor to continue to serve as their Prime Minister. 


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Mr Speaker,

One of the Prime Minister’s colleagues recently described his approach to this crisis “disjointed”. Another said that after it all went wrong, he went “cap-in-hand”. Of course, the Prime Minister takes a different view: defying reality and even his own colleagues, he considers this a “great victory”. In his statement, he tells us that “the CCP blinked” and that “we as a nation cannot compromise”.

But he knows the truth, and the British people know it too. He blinked, and he compromised. And he can’t bear to say so because he would have to admit that he was too unprepared, too unwilling to talk to experts, and too inexperienced to talk to our allies.

Not wrong, Mr Speaker, to say that we as a country should reduce our dependence on the Chinese economy and on the whims of the Chinese Government. I share fully his disdain for the regime.

But what he has done will make the problem worse, not better; and exacerbate many other challenges our country faces.

The Prime Minister has been forced to back down on one of his first key announcements on the Confucius Institutes. I say back down. This one has been a little like the hokey cokey - we’ve been in, out, we’ve shaken it all about, and we’ve ended up right back where we started. In the meantime, the Government lost a Chancellor and his Government lost all credibility on the issue.

He has been forced also into a major concession on trade in dual-use goods, permitting their trade after all. Two thirds of his first grand statement on China consigned to the bin. The Government claims that they won’t be used for military use - but that was already part of the export regime, and the Prime Minister’s own statements make it clear he has no faith in the honesty or integrity of the Chinese regime to keep promises such as that.

But not only has he now permitted that trade, it turns out that now British taxpayers will be subsidising British trade with China. The Government seems to be pretending this is some great win, or some kind of benevolent announcement. If it were in the British national interest, why would the Chinese Communist Party be so keen on a relatively minor tax policy in the global scheme of things being implemented by the British Government?

Because it makes the British economy more entangled, more dependent on the Chinese economy.

There is an alternative: a real industrial strategy that builds investment and economic security in Britain, as proposed by the Labour Party and as initially championed, albeit unsuccessfully by the former Prime Minister, the member for Maidenhead. 

And there is an even more sinister element to this. This British Prime Minister has handed over control of British tax policy to an agreement with the Chinese Communist Party. No, Mr Speaker, this is not the same as some trade deal and not the same as the EU. What a preposterous, offensive comparison to - as he puts it - the evil regime in China. This tax break exists because the CCP wants it, and can’t be removed unless the CCP agrees. 

That’s all there is to it.

And what of the elements that do survive, Mr Speaker. Well, he has still left this country, and its people, with a dogs dinner.

Because Mr Speaker, he still has no plan. Yes, two elements of his original proposal have survived - the divestment from Hinkley Point C and other nuclear infrastructure and the action on Huawei. 

But they are also the two for which the Government has still provided no plan and no path forward. 

There is no plan to deal with the loss of Chinese investment in Hinkley Point - it is widely known that CGN brings unique expertise to the project that can’t be replicated by the other investors at this time. This potentially sets back that low carbon energy by years, but at this rate, without a plan, we have no idea by how long and how we meet our energy needs in the meantime.

There is no plan to replace the more than 50,000 jobs and £1 billion in tax revenue that Huawei supports. 

The Prime Minister says the cost is worth it. Rather than meaningless statements like that, he should front those costs with the British people and set out how the Government will respond. Of course, Mr Speaker, we should all recognise that we wouldn’t be in this situation at all had previous Conservative Prime Ministers had a plan and invested in British nuclear technology or in a British industrial strategy.

Labour ultimately supports these outcomes, and would not have allowed it to get to this position in the first place, but the fact that there is no alternative and no indication that the Government is even thinking about how to respond - frankly, Mr Speaker, it’s astounding. And an indication of the incompetence displayed throughout this whole process.

Mr Speaker,

The Prime Minister’s statement provided almost nothing on detail and even less on humility about, accountability for, or learnings from this debacle. Instead, the Prime Minister chose to use his time before this House to make grandiose statements that he can’t back up with action; and political attacks on the official opposition that would seem more appropriate in the US Congress than the House of Commons. 

Those of us criticising the Prime Minister, and holding him to account for his failures throughout this crisis, are standing up for the very values he claims he is defending. Democracy. The Prime Minister is not above questions about his conduct or his competence. 

And if he really were so confident in both of those, then he would do the decent and sensible thing, and agree to Labour’s proposals for an independent inquiry - so the country can put this whole sorry business behind it for good.

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