Enter The Chinese Dragon - and the start of bonded servitude

Under foreign flags

Readers may be aware that I am generally untroubled by inward investment and foreign ownership of UK assets, though this is clearly not a view shared by all who visit these pages.

The Chinese aspect in this week's jaw-dropping (if highly trailed) nuclear announcement is a bit different, though.  There is the national security angle, of course, and many will be most agitated by that.  I don't dismiss it, but it's not what strikes me the hardest.  Security of supply is a non-issue: the Americans tried to pin that on Russia as a gas supplier during the Cold War and it never stuck.  Safety ?  Technology ?  All issues that can be resolved - if you count buying the ridiculous EDF / Areva EPR technology as a good idea in the first place.

More foreign flags

I am more concerned about what it signals, or rather confirms, about what I have long felt to be the probable strategic response of European governments to our parlous financial position.  A couple of years ago I wrote that when we are really up a gum tree the Chinese will have a deal for us, and we will meekly sell the farm.

This is a particularly acute risk for the UK, in my assessment.  In our semi-detatched euro-positioning, our vulnerability to having the City isolated by jealous continental and American financial authorities, and our commendable centuries-old willingness to roam the high seas, we will always be inclined to 'trade our way out of trouble'.  

Now true commercial trade is a great thing and would indeed be the ideal way forward.  But increasingly what we see is a baser trade: the prostituting of our institutions to the whim of Russian and Chinese wealth.  If they want to lavish their money on our libel courts or Mayfair shops, that's one thing.  But it won't be ending there.

Today we see the first of the mega-bargains our desperate UK politicians will enter in order to engineer short- and medium-term relief from our woes.  Faustian is just one way to describe it.  Another would be the PFI-ing of the UK economy to China.  Future generations will curse Camerosborne roundly, as they pay grotesque prices for electricity and probably a great deal more.

And the prices may not only be measured in currency.  Bonded servitude may be the term we are looking for.

This post first appeared on the Capitalists@Work blog 


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