I thought it would be rude not to come out of hibernation to do a post on the China-UK strategic alliance. That, and I have been bullied by my Capitalist Masters to write something...
Lots of the debate I have seen and heard revolves around the question of "does engaging with a fairly brutal regime make it more or less likely that the regime will become less brutal?", linked with "can we afford not to engage with the Chinese?". These are interesting questions. When the Iran ball dropped and suddenly the possibility of selling stuff to the Iranians and getting a return on investment there arose, I read a newspaper article crowing that as usual the Brits were slow off the mark and that our French and German rivals were much more ready to benefit. I didn't read anyone slamming the French and Germans for getting into bed with a dodgy regime. We Brits seem to be damned if we do, and damned if we don't. The Germans have made a very big success out of selling cars to China. Does that make the Germans more or less human-rights-aware?
Let's be brutally frank about this: Britain could use the investment and trade opportunities from pretty much anywhere. The UK economy is reasonably steady (perhaps even overheating in places) but that does not mean we have got over our longstanding problems. Without entering into a debate about whether the nuclear deal is worth the money, we do need someone to be building the next couple of decades' worth of electricity generators. There are plenty of opportunities for British investors to get involved in things, but there seems to be so much capital piled up in China, it would seem to make sense for us to get some of that to work here.
We aren't simply a charity case here, though. The British and Britain are still held in high regard around the world, something which you would not guess from the self-flagellation in which we indulge ourselves so often here on the island itself. For the Chinese, perhaps in addition to the return on the capital they employ, and the businesses they develop, there are rewards in being shown to be a trusted partner. If the Chinese companies involved in the deals being outlined during the state visit screw up, it is Brand China that will suffer the most. Much of the rich world is shut off to Chinese investors, but maybe the Chinese hope that entrenched views on both sides of the Atlantic may soften if the British projects work out well.
China is at an interesting stage of economic development. The huge investment-based export-reliant catch-up upswing appears to be ending. To get really rich, the Chinese will have to become good at innovation and fostering small businesses. Famously, when the Japanese decided to integrate themselves into the world economy, they transposed whole chunks of the German legal system into their own. Perhaps Chinese investors will learn what it is that makes us a good place to do business and take some of that back with them.
It was not so very long ago that people worried about the return of Hong Kong to Chinese sovereignty. Would an oasis of the rule-of-law and vigorous free-market capitalism survive when ruled by a bunch of Commies? The treaties between the UK and China demanded fifty years of effective independence, and a currency peg to the US Dollar. Yet, the great success story of the subsequent period has been how economic freedom (not complete, mind) has spread from that little corner to right across that huge country. I doubt anyone especially worries about a repeat of the Cultural Revolution.
So, my conclusion is: if you are keen to get the Chinese government to treat their own people better, it is probably better not to treat that government as a pariah, and let it fester in its own insanity a la Iran or North Korea or even Cuba; if you are keen for the UK economy to develop and thrive as a centre of excellence in trade and free markets, then you should welcome investment in almost any industry from almost anyone - it is up to us to make sure that we get what we need and don't overpay.
Britain has been a successful country over the centuries not because it has stuck to a particular principle or ideology, not because we have fixed and immutable red lines, but because we have been able to adapt to ever-changing circumstances. We should change our name to the Pragmatic Kingdom.