Malcolm Moore in Beijing and James Quinn in London
The Telegraph
May 6, 2013
David Cameron has effectively been barred from visiting China because Beijing is so angry at the Prime Minister for meeting the Dalai Lama last year. China wants Mr Cameron to apologise for hosting Tibet’s spiritual leader, who disputes Beijing’s territorial claims on the region. The Government insists there is nothing to apologise for. There are now fears that the frosty diplomatic relations could put at risk Chinese investment in Britain, which was worth £8billion last year. Chinese sources have made a veiled threat that for investment in the UK “there needs to be a strong relationship”. That raises the prospect of large infrastructure projects such as the High Speed 2 rail network and the Government’s nuclear investment programme missing out on billions of pounds of key investment from China’s sovereign wealth fund.
The damaging stand-off has seen a cooling of relations up to the level of the countries’ leaders.Under a bilateral agreement, Mr Cameron was due to visit China last autumn but that visit was called off. This year it was the turn of Li Keqiang, the Chinese premier, to visit Britain – but plans for that have now been put on hold. Last month, a British trade trip to China, also due to have been led by Mr Cameron, did not take place. In contrast, François Hollande, the French president, was greeted with a 21-gun salute in Beijing recently.
Last May, China warned Mr Cameron and Nick Clegg, the Deputy Prime Minister, of “serious consequences” for Britain after the private meeting with the Dalai Lama in St Paul’s Cathedral.
Sebastian Wood, Britain’s ambassador in Beijing, was summoned to the foreign ministry to receive a rebuke from Song Tao, China’s vice-foreign minister. The foreign ministry said the meeting with the exiled Tibetan leader had “seriously interfered with China’s internal affairs”. Mr Song urged Britain to take “practical actions to correct the error”.
However, the pleas were ignored, and China is now exerting public pressure on the Government to bow to its demands and make amends.
The Beijing foreign ministry has now escalated the row by insisting the UK must “work with us to bring the relationship back on to a healthy track at an early date”.
A spokesman said: “We all know that the relationship between China and the UK was undermined by David Cameron meeting the Dalai Lama and this is not something we are willing to see.”
Diplomatic sources told The Telegraph that Mr Cameron was now not welcome to visit China and Mr Li will not visit the UK until Britain resolves the situation.
Although Chinese investment in the UK hit an all-time high last year of some £8billion, five times as much as in 2011, one source in London threatened that “a political relationship is a pre-condition for a trading relationship”.
Among the British investments of the China Investment Corporation are London’s Canary Wharf financial district — of which it owns a third — and Heathrow, in which it has a 10pc stake worth £450million. Alistair Michie, the deputy chairman of the 48 Group, a pro-China British business organisation, said Britain’s position is “doubly unfortunate” because a new generation of Chinese leaders has just taken charge for the next 10 years.
“The UK has not fully grasped the significance of the handover to the new leaders and we have got off on the wrong foot,” he said. “None of our leaders has a personal relationship with any of the new Chinese leaders, and relationships are key to doing business with China.”
Currently there are only a handful of Britons with links to the top of the Communist party, including Lord Mandelson, the former trade and industry secretary, and Lord Powell , an adviser to Margaret Thatcher in office.
There are fears that Britain’s intransigence risks jeopardising billions of pounds of investment. There was a 13 per cent increase in British goods exported to China last year, worth £10.5billion. There were some 179,000 Chinese visitors, a 20 per cent increase, spending some £300million.
Beijing has a policy of punishing countries whose leaders meet the Dalai Lama, but the current freeze with the UK is thought to be the longest ever.
After Nicolas Sarkozy, then French president, met the Dalai Lama in 2009, France was forced to issue a joint statement. The statement was widely interpreted as a promise to discuss any future meetings with the Dalai Lama with Beijing. In 2007, after Angela Merkel met the Dalai Lama, Germany published a joint statement with China.
Government sources admitted there had been some frustration after the Dalai Lama meeting but strongly denied any visits had been cancelled because of it. They insisted Beijing had been warned before the meeting and it was on sacred ground to emphasise it was a meeting with a spiritual leader.
They said that last autumn’s visit by Mr Cameron had been called off early in 2012, before the meeting with the Dalai Lama took place, because it clashed with the election of new leaders in Beijing.
In January, the Government looked at rearranging a visit in April, but this was called off because Mr Li only took over in March. Sources said Mr Cameron would visit before the end of the year.
A Downing Street spokesman said: “We haven’t cancelled any PM visits to China. We want to deepen our relations with China and indeed we already are — UK exports to China grew faster than any of our main European partners last year and we were the only EU country to benefit from increased trade and investment.
“Of course we engage with China on a huge range of issues, on some we agree, on others we disagree, but we strongly believe it is in the interests of both countries to manage our differences with respect, and cooperate as much as possible. Our position on Tibet is longstanding and clear: we regard Tibet as part of the People’s Republic of China. The PM spoke to Premier Li Keqiang in March and they agreed that they looked forward to meeting and continuing to strengthen relations in due course.”
Meanwhile, Zong Qinghou, a drinks tycoon and China’s richest man, claimed he had snubbed both the Queen and Mr Cameron in the space of one week in February. He said he had been invited by the Queen for dinner and by Mr Cameron to celebrate Chinese New Year. Nothing in the court circular indicated any such event at Buckingham Palace.
