BEIJING — Democracy is dangerous, and the West is facing terminal decline.
On the face of it, such triumphal views here portray Britain’s decision to leave the European Union as a propaganda coup and geostrategic triumph for China. So why isn’t there much sign of celebrating in Beijing?
It could be because China fears it is about to lose its best friend in the European Union, stoking worries about a whole host of ramifications.
China’s ambitions for freer trade with Europe just took a blow, while Chinese investments in the United Kingdom — made with a view to accessing the single European market — are beginning to look significantly less attractive.
“The U.K. leadership always said they would be the guys pushing for China’s interests in the West and the European Union,” said a Western diplomat in Beijing who was not authorized to be quoted by name in foreign media. “This is quite bad news for China.”
There was, unsurprisingly, some crowing in the nationalist Global Times tabloid in the immediate aftermath of the vote. The Communist Party-owned newspaper could not resist a sneer at the idea of consulting people about how to run the country — and at Britons, for showing a “losing mind-set.”
But there was a reason that Chinese President Xi Jinping paid a state visit to Britain in October, spoke of a “golden era” in relations between the two countries and explicitly said that China wanted Britain to remain in the European Union.
“In recent years, London has often served as an advocate of Chinese trade and economic interests in Brussels,” wrote Jan Gaspers, head of research at the European China Policy Unit at the Mercator Institute for China Studies in Berlin. “China’s other two major European partners, Germany and France, do not seem particularly inclined at the moment to assume a similar role.”
The presidents of the European Commission and European Council, Jean-Claude Juncker and Donald Tusk, respectively, are scheduled to be in Beijing on July 13 for an annual summit with China.
Topping the Chinese government’s agenda is its campaign to be granted “market economy status” by the E.U., a move that would make it harder to bring anti-dumping cases against China under World Trade Organization rules. Britain was the only country that expressed unconditional support for China, diplomats said.
In fact, concerns are mounting throughout Europe about what critics say are China’s unfair trading practices, especially the problems foreign firms face in accessing its markets, and the dumping of cheap steel and other raw materials in the West.
Europe already faces problems in the euro zone and over migration, and the existential crisis implied by Brexit is likely to divert E.U. attention from China, diplomats said.
Britain’s exit is also likely to slow Europe’s already sluggish recovery from the 2008 financial crisis.
Not that this need be a disaster, of course.
Bloomberg Intelligence economists Tom Orlik and Fielding Chen pointed out that only 2.6 percent of Chinese exports head to Britain. David Dollar, a China expert at the Brookings Institution in Washington, noted that the Chinese economy no longer depends so heavily on exports but increasingly relies on domestic consumption.
Some Chinese investment in Britain is likely to be put on hold, but Chinese companies and citizens are still likely to invest in British real estate, infrastructure and brand names, according to Gaspers of the Mercator Institute.
Chinese investment in Europe is booming, with as much flowing there in the first quarter of this year as during the whole of 2015.
Dollar, who studies the Chinese economy at Brookings, argues that China is the big winner geostrategically.
“Europe is likely to be a less influential player on the world stage and will be absorbed with internal issues of negotiating the British exit, controlling immigration and keeping the periphery inside the eurozone,” he wrote. “The United States is also likely to be distracted by these European challenges. This gives China more scope to pursue its reclamation activities in the South China Sea and to play divide and conquer with European states on various issues.”
“A multipolar world requires more powers, which are independent of the U.S., to participate in international governance. The E.U. is supposed to be one of them,” the Global Times wrote. “But the leverage of a divided Europe is bound to be limited.”
Gaspers outlines an even more worrying scenario.
“China’s political elites are concerned that the outcome of the referendum could cause a domino effect that would see other member states leaving the E.U. as well,” he said, leading to a shrinking of the single market for Chinese goods as well as exchange rate volatility.
But where will Britain stand when the dust has settled?
Prime Minister David Cameron shared a pint of beer with China’s Xi to seal their golden relationship, but now he is on his way out. The future of China’s biggest cheerleader in the British government, finance chief George Osborne, is uncertain.
In the Chinese government, there is growing concern that a post-Brexit Britain, instead of leaning toward an emerging Asia, will rely even more on its “special relationship” with Washington to maintain some global influence, the Western diplomat said.
For a Chinese leadership increasingly wary of the United States, that would not be seen as good news.