Following is the full transcript of the July 8th, 2020 Hudson event titled U.K.-China Clash: A Conversation with Sir Iain Duncan Smith MP
Ben Judah: Hello and welcome. My name is Ben Judah, a research fellow here at the Hudson Institute in Washington DC. I'm delighted to be joined here today in the ether by Iain Duncan Smith, a leading member of the UK parliament, former leader of the Conservative Party, and co-chair of the Inter-Parliamentary Alliance on China for a conversation on what next between Beijing and the West, and the future of British foreign policy. Thank you for joining us, Iain.
Sir Iain Duncan Smith: My pleasure. My pleasure.
Ben Judah: I thought we would start with a very simple but big question which is, is China a threat to Britain?
Sir Iain Duncan Smith: Okay. The answer to that question is yes, but not only to the UK. I think the truth is that the free world has marched somewhat blindly, I think, into the embrace of a Chinese Communist Party that has very clear and strategic understandings about how it wishes to dominate a whole series of areas, both in the marketplace and in geopolitics. I think if you look carefully at what President Xi says and others, you will see there is a very clear pattern as to where they wish to be by 2040. To do that, they have needed the market to provide the money. The UK, over the last 10 years, in line with many other countries, has gone to China to get all sorts of things done, production.
As a result of that, we've seen China coming back into the world of trade, but intriguingly, not obeying any of the rules that exist in that rules-based order of the World Trade Organization. Breaching these things by technology theft, by copying, essentially by trying to set up and underbid companies. Huawei is a good example, underbidding companies in the area of telecom systems so that once there were about 10 or 12 of these companies in the free world, now there are literally three. All of the others have gone out of business because there was nothing in it for them, and China is now dominant in this area.
You can see this, doesn't matter whether you're rare earth materials, whether it's the Belt and Road project, or whether it's straight commercial impropriety. Yes, China poses a threat because this is yet not the end and the end is complete dominance. I think we have to recognize politically, and in geopolitical terms, not least of which some of the more threatening elements of their forecasting is really a problem for us. Yes, but not just for the UK, for the free world.
Ben Judah: My next question to you is, do you believe that China's coronavirus handling was an international crime?
Sir Iain Duncan Smith: Well, if I step away from defining it, I can tell you that I wrote about this a little while ago in the Daily Telegraph paper here in the UK. In it I wrote that, if you look carefully at the dates in which this process unfolded, you will begin to see that there is a second theme running. It is my belief, and I think it's born out now by the dates, that the Chinese government, on the 15th of December I think, was due to have a further set of sanctions imposed on it by the United States, which I think was certainly over a trillion, which would have had a big effect on the Chinese economy.
What they needed to do was to get through that and agree to the trade deal which would then be signed on the 15th of January. I think if you look at that carefully, you will see that there was a deal of suppression of information about human-to-human transmission, which now we believe was known about in at least November, some say earlier, through December and into January. It wasn't until late January that there was any indication that China accepted and admitted they had an epidemic on their hands. Now, the WHO is not without fault here, but we're not here to discuss them. I do believe that, in desperation to make sure they had nothing to disrupt that trade deal, they made sure that none of this came out as it might've posed a threat.
The question then you asked me was, is this some sort of a crime? Well, in human terms, it does become one because, without that early warning, there's no question now that the coronavirus was being spread to Europe, to Italy particularly, even the UK and various other countries, long before we knew not just of its existence, but of the kind of threat that it posed. We were all somewhat unprepared.
Ben Judah: Should China be held responsible? What are your views on this topic of reparations that's been mooted by some in the Conservative Party?
Sir Iain Duncan Smith: Well, they're not alone. I think there's a number of people that have come to that conclusion. I think that the reality here is, I think it's a far cry to be able to get an acceptance or an admission that there is a need for or that China would be prepared to agree to sanctions. What I do think is the first stage is required, is there needs to be a full independent inquiry into the timeline on this, and at what stage it was believed that China fully understood that they had a human-to-human disease which was somewhat out of control. I think that has to happen almost immediately.
China has refuted that, has even attacked Australia, I see, belligerently threatening sanctions because the Australians had the timidity to call for one. But I think if the whole of the free world joins forces together and demands that, then I think China will have no other option in the end but to open up to the WHO. The WHO should be actually calling for that right now, but I think they've gone strangely silent on this matter. But yeah, it's desperately important. Number one, we must get that inquiry.
Ben Judah: How has the coronavirus changed the debate on China within the Conservative Party?
Sir Iain Duncan Smith: Well, first of all there was a lot of resistance. Back in the early part of the year, the big debate here in the UK was, should Huawei be involved in the new 5G settlement? Now I'm one of those, for some time, that has believed that we have cast all caution to the wind under, I think, George Osborne particularly although it was also under Labour, but accelerated under George Osborne's time at the Treasury. We basically decided that we were going to open our doors what they called this Golden Era, I think, or something. One of those sorts of phrases which politicians use which means next to nothing. But this one was used to describe the idea that we would do business with China on a big scale.
Therefore, we even had President Xi come and visit the UK, I thought he was rather patronizing when he was here. Gave us a lecture about government and democracy, which I didn't appreciate. But I have to say that the reality was that we did. The result of all of that has been that Huawei, for example in the last 10 years, has been engaged in the UK telecom system from 3G through to 4G. Now the proposal was they would come through to 5G. The problem is that the government at the time, early on this year, actually late last year, said that it was okay that they would control them into just the outer reaches. But in truth there is no definition of outer and inner under 5G.
We mounted a case to say, that's it. It's time now that we eradicated them from any plans for 5G. But more importantly that we actually got them out of the existing systems like 4G. The government dismissed us on the basis, when they got elected they had an 80 majority and therefore they wouldn't have to worry. But intriguingly when we tried to amend the bill back in March, before lockdown, we very nearly succeeded in getting enough votes. Now, that has frightened the government significantly. It shows them that the scale of the problem existed. Since coronavirus and China's involvement in that, I have to tell you those numbers have grown significantly. The government now knows that it has to come forward with plans to eradicate Huawei from their future systems, and those will be tested quite soon, I think, in a bill that's to be brought forward.
It started with Huawei, it's hardened under coronavirus. Now, of course, even yesterday, on Monday that is, I held an urgent question calling the government to the dispatch box to answer over a report that the IPAC group, which I am a co-chair, has managed to publish alongside Associated Press showing, through government documents in China, that the Chinese are complicit in what I think now, frankly, could almost certainly be defined as a form of genocide on the Uyghurs in Xinjiang Province. It's all there to see, and that is a shocking revelation.
Then if you add to that, as I said at the time, their expansionism outside of China, the South China Seas in contravention of the UN's commission, their bullying, it seems, on the border with India, their somewhat threatening behavior over Taiwan. All that I said, the breach of trade law and regulations, the crash down on Hong Kong, which I think in the next two days is due to have major changes to its law in contravention of the agreement with the UK on the basic law. Importantly, the stated view that President Xi himself wants to see China as the dominant military force by the 2040s such that it would be able then, if necessary, to take Taiwan by force. All of these are clear and open and obvious. I think people here in the UK, particularly politicians now have finally grasped that this is a genuine problem.
Ben Judah: I want to circle back to the Golden Era, as David Cameron and George Osborne called it, between the UK and China. Was this a major strategic mistake made by the Cameron and Osborne government?
Sir Iain Duncan Smith: Yes.
Ben Judah: That's a pretty clear and definitive answer. Moving maybe swiftly on, where is the current resistance to this change of policy on China in the UK?
Sir Iain Duncan Smith: Well, I think the main problem is that a huge number of companies, including the telcos, have got themselves incredibly involved with China, as I said earlier, on the production of equipment. But it doesn't stop there. China is now involved in our nuclear power station program, which I have genuine question marks over, to a huge degree. They're also heavily involved in the offshore wind farm process, because so much of that equipment derives from China. There are other places too, but there is a significant degree of that. The big problem in all these areas is that Chinese money is seen as a very helpful process in developing key areas. You've got the establishment, I think the Treasury is concerned here because of course they worry what will happen if China disappears from these investments, who will replace them. On the other side you've got a lot of businesses who have vested interest.
I mean, I'm absolutely appalled, to be quite frank with you, the number of the great and the good who have now managed to find themselves on board particularly here with Huawei. I don't know how much they're paid, but I should assume that it is significant amounts of money. Which I think really, by the way, doesn't persuade anybody here internally, but it does show that there is an element of greed going on in some of this as well, which rather bothers me. In reality, it is essentially an establishment problem. It's a lack of imagination in the establishment, it's a lack of understanding, it's a short-termism which happens. In many senses, if you're not careful, history teaches us time and time again, when the establishment thinks that it's too difficult a problem to resolve, then the problem that comes down the tracks is even bigger.
We've got tons of that through history, not least which of course is the 1930s and the failure to confront what was a growing problem in Germany with, again, a government that professed some very nasty and dictatorial attitudes towards a whole series of freedoms and rights in the early stages and militarily. My concern is, history teaches us to make sure you deal with these problems early. If we become too dependent, and I think we are close to that now, on China, then it makes it even more difficult in the years to come to face up to China.
The truth is, a succession of Western governments, not just the UK, has been supine in the face of what is a real problem. Just look at Tibet, uncomfortable when Cameron saw the Dalai Lama, China threatened us and told us that this is unacceptable. I'm not even certain whether he ever raised it again. If he did, it would be one of those conversations with the Chinese government which he would say something like this, "Well, I just want to mention Tibet." Silence. Anyway, moving on from that, so that the press release following it says, "We definitely mentioned Tibet." Yeah, we did and, boy, that worried them.
My point is that, not one single country alone, and I'm even beginning to believe that with the USA, which is arguably the only country capable and sizable enough to worry the Chinese. But I think the whole of the free world now needs to come together to say, "We didn't construct a rules-based order. We didn't go for human rights after the Second World War because we thought that they were add-ons. We went for them because we think governments that are not democratic governments, that aren't believers in the rule of law and governments, that don't support their own people through a concept of natural rights: these are not governments that should access the free market in the same way that the others do, who consider themselves to be free countries as it were."
That is a critical definition. We've swept all that aside in our rush to make products cheaper, in our rush to get China engaged. Now, of course, China is dominant in so many key areas they strategically invest in . Going beyond even some of these technology areas where all our phones are made in China and the motherboards, et cetera, and the assembly. You also now know that the rare earth materials, about 85% of all the rare earth materials that go to the making of batteries, and the technology, and the microchips, these are all held now in the possession of China. Many of these rare earth material mines have closed down because they weren't supported by other countries. The result is now they control that market to a degree which is worrying. Look at the Belt and Road project, and the way in which they lend money out. They own about 20%, I think, of Africa's debt.
But, I was looking at a country the other day, who I won't name, they got a loan from China. Of course, Chinese loans aren't like US or British loans, we don't tell them they have to buy British equipment. Chinese loans ensure that actually the money comes straight back to China because they have to buy Chinese telecoms equipment and Chinese engineers go in and the support isn't great. My point is, this whole process is a strategic place. It's a strategic decision to go and use the money that they now earn as a result of the free world's constant demand for product that's cheaper that they're able to use that in a way that meets their strategic aims. My answer is, I think the free world needs to have some strategic aims to protect the idea of democracy, the rule of law, and the concept of human rights. We can't turn a blind eye anymore.
Ben Judah: Tell me about your thoughts on the other side of the house. What is the Labour Party's current attitude to China? I saw there were some quite strong statements by the Shadow Foreign Secretary, Lisa Nandy. Do you think that Labour has reentered the anti-authoritarian frame after the Corbyn era, or is it still in a different place?
Sir Iain Duncan Smith: Well, anything after Jeremy Corbyn's tenure is an advance in the concept of criticism for what I call the despotic regimes. I often used to think with Mr Corbyn and some of his team, they found it always easy to criticize America and to attack America, but very difficult somehow to criticize Russia and/or China, and for that matter, quite often, Iran. That has now changed, there's no question. I welcome the fact that the Labour Party does actually seem to share the same concerns about our relationship with China. During the course of my urgent question yesterday on the maltreatment of the Uyghurs, the Labour frontbench spokesman, was Stephen Kinnock, Neil Kinnock’s son, was very, very strong indeed. In fact, fully agreed with pretty much everything that I said, called for almost exactly the same things to happen.
I think that shows that parliament and everybody else that took part in the questions to the minister which went on for an hour, every single one of them, Labour, Scots Nats, Liberal, Conservatives, all of them, basically we're on the same side, which is, "We have a problem here. What are you going to do about it?"
Ben Judah: Staying on the topic of parliaments, tell us about the Inter-Parliamentary Alliance on China.
Sir Iain Duncan Smith: Well, this is an idea we came up with here because I was concerned that... I come back to the point I made earlier, which is I do genuinely believe that no single country now is in a position to force China into any change because they can disregard that country, basically sanction them or whatever, and get on with the others. In the greed, which is necessary in some of these countries, they all, "Oh, I don't want to get caught by that. I'm going to carry on trading." What we have to do is get all the countries together, what I loosely describe as the free world, and try and get them to focus together on what do we do about this growing problem.
IPAC is an attempt to lead the way on that. What we came up with was that, it's an inter-parliamentary group, so there would be two co-chairs for every country, one on the conservative side, one on what we'd loosely described as the left in parliamentary terms. They would be co-chairs, and then each country would have their two co-chairs and would join IPAC. Then in each country, people from those legislatures who were not the co-chairs could join as well to support them so there's an information flow. I think we now have 16 countries involved, which includes the Five Eyes, all of them including the United States. In the United States we have Senator Menendez and also Senator Rubio. Both two pretty senior characters in the Senate. They're the co-chairs there. Myself here with Baroness Kennedy who is a well known and strong international human rights advocate and lawyer. But all around the rest of these countries, whether it's Germany, France, Italy, or Sweden, Scandinavia generally, Japan, they've all joined and we're getting more and more. We're in discussions with India to join as well.
You can see this is broadening out quite dramatically far faster than they thought. The idea is that IPAC is to lead the way and show that it is possible for coordinated action to put pressure on China. So when we did the UQ yesterday, that is the urgent question, on the issue of the maltreatment of the Uyghurs, something along similar lines, because each parliament has different ways of doing it, has happened in pretty much every single country. Every parliament was made aware of this report, and has condemned the findings of the report. In America, I gather there was a cross-party letter written, I think yesterday, which was going to finish off the end of the day because of the way it rolled and the timescale.
It did show that it is possible to coordinate, it's possible to show China that they're not going to pick us off one by one any longer, that we mean business and we're not prepared to be cowed by threats of bullying. Australia's put up with a lot of threats of bullying recently. Some of the politicians that are on IPAC themselves have been personally threatened in that regard. Us coming and joining with them in solidarity really matters to countries that find themselves out on a limb. If Australia gets bullied, we all get bullied and we should all stand together.
Ben Judah: Staying in Washington for a moment, do you agree with President Trump's China policy?
Sir Iain Duncan Smith: Well, you have me slightly there. Because if I understand the China policy, it is now that the USA is deeply concerned about the behavior of China across a range of issues. I know that the secretary of state has made some very strong comments and actually came out as well yesterday, I understand it, and condemned China over the treatment of the Uyghurs. That seems to be very much in line with where we are. But I also understand, I think, that all sides of the houses pretty much share a similar intention towards China, and a determination now to make some changes. There's no question that the sanctions regime on China worried the Chinese very, very significantly. For all the bluster, it definitely worried them. And as I say, America is the only country that really, by itself, can have that effect because of the scale of their economy.
But I do think now we need to have a much clearer approach from the States about bringing in all the other nations to this process as per IPAC, so that it isn't just Washington speaking. It's actually a consensus across all these countries about how we act together. I think America is clearly going to have to be the lead partner in all of that, although I think the UK has a strong role to play with its own contacts. But that notwithstanding, I would like to see Washington, the present government, President Trump, but even as they're running to an election on the other side, the Democrats, committing to the idea that whoever is in power after this election, we will now see leadership in a way that we perhaps haven't seen for some significant time for the free world from the United States. Because this is urgent and it is serious. If we don't deal with it now, and if America doesn't step up to that role that it must play, then I think we'll all be the poorer for it.
Ben Judah: Circling back to Britain, are you confident that Huawei will be gone from Britain's 5G network by the end of the year?
Sir Iain Duncan Smith: Yeah. I'm more confident than the government is.
Ben Judah: I want to drill down on this question of nuclear power plants that you mentioned earlier. Should China's involvement in the construction of these new nuclear power plants be scrapped?
Sir Iain Duncan Smith: Well, they're already heavily involved in one that is pretty near to completion. Now they're bidding for other ones with a French company. I do understand that the technology in the first power station, which has already been built in France, certainly doesn't work yet. Therefore, my concern is that we commit to stuff, A, that frankly I don't think is properly tested, and B, I don't think we need. I think there are plenty of other ways of generating power for the UK rather than these vast great leviathans which are built on a huge scale. But for every nuclear power station, the problem is you've got to have backup in gas or some other process, maybe coal or oil, so that when the nuclear power station goes down, you don't lose power. This is unique to nuclear power stations.
I am much more interested in tidal power, which I think for the UK is the absolute way ahead. We have very high rises of tides across, particularly the West coast of the UK, many potential lagoons. The beauty of this, there is already one being tested out now in Swansea, which should be built... the key thing about this is, about 90% of the equipment in there would be built within the UK and designed within the UK, and will bring jobs to the sort of areas that the present prime minister promised to uplift. Those seaside towns and those industrial areas which got left behind in the last 20 years or so, they would see a renewed amount of work and skilling, which may even itself lead to exports. That'd be great if the UK started investing in the UK a bit more and a little less in rushing to China.
But by the way China on nuclear power is not the only problem. I mean, let's just take another look at something. We are now rushing, in the UK, to try and get to carbon-free transport, certainly public transport, by the year 2050. There's talk about public transport getting there earlier. Of course, at the moment, they look at battery power. Now, we can argue about whether or not we should be looking much more at hydrogen and the development of the hydrogen fuel cell and things. That's a debate for another day. I know the UK is one of the leaders in that as well. But what bothers me very slightly is that as soon as this was announced out, local government after local government seems to have rushed to China.
Now, China has a monopoly almost, not quite, of battery production, because that's one of their strategic areas. Looking down the road, they saw that electrical power was going to be required, and they've made themselves, again a bit like Huawei and the telecoms systems, dominant in this area. Now of course, the UK is about to make itself a whole lot more dependent on Chinese technology including, they're having back doors into the technology. Of course, the companies that produce these batteries will require that you only use their systems, otherwise these batteries cannot be recharged to refocused.
The answer is, this becomes a greater level of dependency. I questioned this and I've questioned it to the government. I said, "Really, do we need now to do this? Why are we not talking about the free world having markets in these?" Until we realize that China has changed and they haven't changed. We've got to re-investigate all of these areas because we've blindly gone into this and seen no strategy at all. Whereas, to be fair to China, everything is strategic.
Ben Judah: Crossing the world again to Hong Kong in these fateful days as China's repressive security law seems to be set to be imposed. What is the status of British foreign policy towards Hong Kong? What do you make of those endeavors to stand by the Sino-British Treaty? What do you think are the consequences of Britain's move to uphold that is going to be?
Sir Iain Duncan Smith: Well, the truth is the British government has condemned the change, which we've seen some leaks off, but I don't know whether they're correct. I know it's due in the next day or two and so we'll see. But this will change the relationship or the basic law completely. It breaches the Sino-British agreement signed over Hong Kong, one country, two systems. That is an international obligation, it's not just something China can overturn itself. It breaches all of this. This is very much par for the course with China. We are left with the problem that the UK condemned it and the government has done so, and says that it will wait now to see what the law change is before being very explicit. But again, this rather highlights the problem that the UK alone cannot have a lasting effect on China's position.
What we need is the whole free world to come together and accept that what China does today for Hong Kong will be their attitude to Taiwan tomorrow, and in many senses their attitude to pretty much most of the countries and areas around their borders. Because once they get away with it, they will go on repeating that process because it will be too late. As I said, we've seen this before, we've seen this before. In the 1930s, we saw very similar processes where the free world turned away from criticism. What we have to do is come together and say, "This is unacceptable," and we together must talk about what we do. Whether it's in terms of discussing sanctions or breaches in trade, whatever it happens to be. I think governments must now come together and say to China, "You make these changes at your peril because we are simply not going to put up with it. If that's the case, then we're going to have to review our commercial relationships with China in a very significant way."
Ben Judah: Just something I want to ask you about is the offer made by the prime minister of a pathway to citizenship for the British nationals overseas, which could potentially see up to 2.9 million people be able to leave Hong Kong and come to live in Britain and become British citizens. I'm curious for your views on this.
Sir Iain Duncan Smith: Well, I'm completely in favor of it. We need to offer them some place to go should they find it too onerous. I think it's a generous offer, it's almost unprecedented. Although we did do something similar for the Ugandan Asians at the time of Idi Amin in Uganda, but this was a much smaller number. We're talking here very sizable numbers. I have, in the House, asked if the government would also talk to our friends and allies about all of them stepping up, being prepared to take a proportion of many of those who may have to flee Hong Kong for various reasons, to give them the same rights. I know that many would like to go to Australia because it's not as far away from Hong Kong. There are other countries nearer that they would like to be part of rather than just come all the way to the UK.
But it's a generous offer from the UK, it's well meant, and it will be backed up by reality. But I would like to see our other friends and allies all say, "Look, we'll share the burden. We will share the burden." I have to tell you, these are some of the most skillful and intelligent people on the planet. They will certainly add and contribute to the countries they go to. But the important thing is the human rights of this and it's the right thing to do.
Ben Judah: What do you make of China's bullying of HSBC, and what do you make of the fact that Britain's largest bank said that it backed China's repressive security law?
Sir Iain Duncan Smith: Yeah, I was asked this on a radio interview. I hadn't really focused on it very much when they asked me, but literally as I answered the question, it became very apparent to me, I don't bank with HSBC or any other bank that's been involved in this. But I have publicly said, if I did bank with them, I wouldn't bank now. I think it's beholden on those who bank with them to say to them, "This is simply unacceptable." The moment you kowtow to a dictatorial regime like this, you no longer make yourself look reasonable in terms of your banking offer.
I don't want to know that the bank that I bank with is prepared to be pushed around by regimes like this, because that means that essentially they're not free. I'm not prepared to bank in an organization that bends the knee to authoritarian regimes like this. I'm sorry. That's not on. My view is very simple, and I think this has already happened, quite a lot have left their accounts at these banks. But I would say to everybody else you should go too, because frankly, the bank itself should recognize that once you compromise on freedom, then there should be consequences for you. I think those consequences are, they should lose those accounts.
Ben Judah: What do you make of the Treasury's concerns about Britain cutting ourselves off from Chinese growth? What do you make of the Treasury's hostility in general to the more aggressive sides of China decoupling?
Sir Iain Duncan Smith: It's been my experience in government, because I was six years running a department as a secretary of state. But it's been my experience in government and out that the Treasury is almost the last part of government ever to get it. That is because they always model everything from where they are now, but they don't really genuinely come with an open mind to know how you would replace those systems that you are so busy buying in China, or where you would get your trade from. My general sense is, the treasury will come along, obviously they're worried about the effect on the economy and that's justifiable. But my view is that, it is wholly feasible within the free world for us to create the sort of things that are being done in China. There are plenty of other countries around the world in the far east, as well as here in the West, that can step up to that mark.
Our problem is that we've been very mono-tracked, as it were, into China for all of these bits and pieces. The truth is, right now, you question whether this is good value for money. Because this whole concept of democracy, the rule of law, and human rights, affects every single aspect of a free economy. It's free for those reasons. You can't limit those things and still have a free economy. There is a price to pay for cheap goods from China, and that price is that you turn a blind eye to all of the abuses taking place in China. As I said yesterday, the issue around this forced sterilization of Uyghur women should lead you absolutely cold, no matter whether you're on the Treasury, in a bank, or in a business or whatever. You have to ask yourself this question, how much is that so called economic change worth to you? Without freedom there's no economy.
Ben Judah: I couldn't agree more. The news out of Xinjiang is absolutely chilling. A question I have next is, who are the most prominent pro-Chinese politicians in British public life? Are there any names that should be named? Is there a cast of shame here that you'd like to draw attention to?
Sir Iain Duncan Smith: Well, you'll forgive me, I'm never a great one for naming names. I think you can probably figure that one out yourself when you get to look at the list of those who stood up for China, but I'm not going to name names. All I would say is, there are a list of the great and the good who have, as I say, bowed to China, but done so with their wallets wide open. My view about that is, "Well, if that's what you think about freedom, then good luck to you." But the majority of the British public... what's quite heartening here, by the way, once you get past the establishment, once you get out into the country, if I write something or post it on China and about my concerns about the abuses of freedoms and the abuse of the marketplace and all these things, I find I get an enormous pickup. Everybody says, "This is wrong. This has got to stop."
The instinct of British people beyond what I call the political bubble is very clear on this. They don't like it. I would think the instinct of people in America, in France, you name it, in and all these countries, when they see stuff like what's happening to the Uyghurs, they want to know why their politicians are not doing something about it. The push from this normally comes from below, it's just like appeasement really. Appeasement was an establishment concept, but it was broken by those who were not in the establishment, and that's exactly what we have to do now.
Ben Judah: Just staying on that political bubble for a moment, is there a problem with the Foreign Office? Is there something malfunctioning about it? Is there an attitude problem? Is there a culture problem in it? Is it really a Rolls Royce service as we've fondly called it in Britain over many of the past decades?
Sir Iain Duncan Smith: Well, I think there's huge skill in the Foreign Office. There are many very skillful operators and highly intelligent people, I don't doubt all that. I think, as an institution, it has the capacity to project British interests abroad. But I do think that... and there's change now coming because the government's announced a change in this, and change in the nature of the department. But I think it does now need to recognize a bit more what the UK's real interests are. It isn't all just commercial. I think things like the treatment of the Uyghurs is a very, very vital moment when I would hope the Foreign Office would lead now in arguing within government, that it is time that we changed our relationship with China and that we led the way.
I would love to see the UK lead the way as passionate and historical believers in freedom, in human rights, in the concept of the rule of law. I mean, after all, the free market was a British concept, it relies on those freedoms, the freedom of choice. The concept of parliamentary democracy was an early British-derived concept and has stood the test of time. All these things are some of the best of what we do. Within human rights, it was the British that were very key to trying to draft up, for example, the European charter on human rights, and were very critical within the UN charter. My point is these are who we are really alongside our great friends and allies like the States and others who have all got similar views on freedom.
Once you trespass on freedom, once you take away rights like that, then things tend to come straight at you from those that go along with that. I think, simply, the British must lead now. The free world is looking, I think, for leadership and where we should go. Bringing them together and saying to everybody, "Let's now speak with one voice." I hope the Foreign Office will lead on that regardless of who the secretary of state is, or the ministers are.
Ben Judah: Leadership, in terms of making a strong and powerful institution, requires money. I'm curious to know whether you think the proposed cuts by the Treasury will impact Britain's foreign policy capacity.
Sir Iain Duncan Smith: Well, we'll wait and see. But I think that, by and large, the involvement now with what used to be called, or is still called, DFID, the international aid department, back into the Foreign Office will change the Foreign Office actually. I think the way in which the Foreign Office works will become influenced by that process. I think that may well turn out to be a good thing, and it will help the Foreign Office. But the truth right now is that it isn't a matter of money, it's a matter of policy. Policy is critical and we need to be able to project that concept of what Britain believes in and the Foreign Office can do that, and should do that, and should lead on that. That's the main thing I think.
Ben Judah: In terms of that leadership and projecting a vision for Britain in international affairs, do you support the idea of a D-10, a group of the world's leading democracies to supplant the G-7, adding South Korea, Australia, and India?
Sir Iain Duncan Smith: Yeah, no, I do. I think the wider we go with the free world, the only qualification must be that countries must be democracies, they must be governed by the rule of law, and they must agree and believe in human rights. If those three things are met, then they should be involved in a wider grouping. As I say, our IPAC system has now 16 countries involved in it. I therefore think we can go much further even than 10. I think it's important to have groupings together or even more than that. We need to be able to reach out to countries in the Far East to show them that we're with them because they feel quite threatened, as well as Europe and America and even South America.
Ben Judah: In terms of groupings that we could potentially do more with, what do you think of the future of the Five Eyes security alliance? Do you think that Five Eyes should be expanded to include potentially Japan, or France, or other non-traditional core security allies?
Sir Iain Duncan Smith: Yeah, I do. I think now that we know what the real problem is, and it's staring us in the face, we need to reach out to countries that are even closer to that problem physically than we are. Japan is absolutely the case in question, and certainly other European countries should be involved. Clearly, obviously, we have the Five Eyes as the core spine, but I think we can add to that, those that we know. I mean, you've got to be quite secure when it comes to intelligence, so you need to make that assessment because the sharing of intelligence is critical. But there are a number of countries we can certainly involve, and I wouldn't be against that at all.
Ben Judah: In terms of what Britain can do next to show leadership on China, what do you think the UK and the US should be pushing together? What specific initiatives would you like to see, or as Johnson and Donald Trump, or whoever is president in November, teaming up together with London to propose?
Sir Iain Duncan Smith: Well, I would like to see the UK government with the Americans and others, but certainly the two countries, leading to say to China that their behavior across a range of areas is now unacceptable. That, if that doesn't change, and if they pull back from this aggressive and deliberate attempt to pervert, essentially, the markets of the nature of human rights and of their borders, then we must start looking again at our relationship in commercial terms with them. Bear in mind, that has a very powerful effect. America already did that once, and that really did worry the Chinese. I think if other countries joined that and we were saying, we're going to start looking to create alternatives to what is being done in China.
Plenty of other countries, as I said earlier, that we could do business with, we can invest in, we can start producing. I see no reason why we should have to run to China for our batteries, why these can't be produced in other countries in the free world and even in the UK or in America. Why we have to rely on them for telecoms? I was told the other day that it's because Huawei is technologically more advanced than other countries. That is completely untrue. Companies like Ericsson are far more advanced than Huawei. We also know that the microchips designed in the United States are 10, 12 years ahead of anything produced in China and Huawei depends on those things. It's not about technology advance, it's about the low cost of production that makes it so attractive. We need to be able to counter that by ensuring that we can produce things in a way that is cheaper, but also at the same time to give it a greater range of choice.
All of that, I think we should be saying to them, "You will leave us with no other option, but to start moving away from you as a marketplace." China needs to grow every year, because one of the issues about China is it's got the acquiescence of the Chinese public because their living conditions improve every year, year in, year out. But without that growth that comes from Western investment and Western trade, that would very quickly stall, and so that would start to put pressure on China. My view is, China shouldn't just assume that the West is supine and will go along all the time. We need to lead on saying, "Now we need to make some changes. Now we need to think about this very carefully and decide to what degree does this dependence on China give us a lever."
Ben Judah: You mentioned Australia earlier, and how Australia has been under Chinese pressure in the last few months. What specific things could London do now to support Australia? Should we take more seriously ideas such as CANZUK, integrating our economies and foreign policy structures together with Canada, Australia, and New Zealand, more seriously than we have in the past? Are you a CANZUK supporter?
Sir Iain Duncan Smith: No question. I mean, I think the way ahead for the UK as it leaves the EU is immediately to develop free trade arrangements with countries like Australia, New Zealand, Canada, obviously the United States, but also other groups. Japan is up on the pan-Pacific partnership. This is where the UK should be involved in all of this. I would say also that we've got to come to terms with the fact that a threat on Australia is a threat to us all. We just can't afford to leave them isolated like this when China starts bullying them as they were trying to do the other day when they called for an independent inquiry. It was a very simple request made by the prime minister, and immediately China said that they would impose sanctions on Australia. Australia is somewhat vulnerable because it is a big... it's actually one of the few net exporters to China, and therefore it is a significant trader and so will feel vulnerable.
I mean, the rest of the free world's got to turn around and say, "Well, we're going to stand with you on this. If you threaten sanctions on one, you threaten sanction on us all, and we will react accordingly, and your trade may suffer." I think it's time for us to build together that process, in commercial terms, that allows us to stand together and recognize that the vulnerability may well be Chinese vulnerability because their need for our business is so great.
Ben Judah: Do you think that we are engaged in a new Cold War with China and what's the end game of this approach you're calling for? Is it the replacement of the Chinese Communist Party and the emergence of a democratic China, a sort of 1989, 1991 moment in Asia? Or is it simply a return to how we saw the Chinese Communist Party behaving in the 1990s?
Sir Iain Duncan Smith: The number one thing, it is not about meddling in internal Chinese affairs. Who governs them is ultimately up to them and the Chinese people. But I think that when George Osborne and others decided they were going to have this golden period of trade, they used to say to me and others who were a bit skeptical, they said, "Well, don't worry. The free trade will open up China and it, in due course, will become a proper government which has democracy and human rights and all the other things. Free trade will change them." I said, I didn't think that was the case because it was such a significantly large country that it could afford, and would afford, to be able to stand with its own form of government. I said, "It's unlikely to."
But even at that time as they were doing it, China was following a more diplomatic course than it is today. It was being more cautious about its relationships. It had been difficult on Tibet to be fair, but on a number of other area it was a little more cautious prior to that. I think that has changed. What has happened is, this present government has become quite aggressive, very determined about what China's role in the world should be, and very demanding about that. I think that has been the big change. The thing that has been proved to be false is the idea that free trade alone changes governments, it does not. If free trade is successful, then bad governments can sit and reap the dividends of free trade and have less pressure to change than they would have done otherwise.
The collapse of the Berlin Wall and those communist regimes in Eastern Europe didn't happen because they were booming economies having a great time trading freely on the open market. It happened because their economies were bad economies and they were unable to trade and therefore had very little money and the condition of the people was very poor. The free trade alone doesn't change all of this. This is a great misnomer amongst liberals in the Western world, that the free markets change things, they don't. Governments change things, and freedom-loving governments who obey the rule of law and agree with human rights, they are better partners than those that don't.
It's also worth being judged by what the Chinese Communist Party has in their own words, where they think they wish to be. As I said, that's very clear. Their level of determination to be dominant is absolutely critical. Furthermore, they also believe that the Chinese form of government is the only government that works. By no means are they thinking that maybe there are accommodations and changes that could be made because they've made it very clear, they think this is ultimately between two forms of government. One is the democratic countries and the other one is the Chinese concept of government with freer markets, but with a rigid and strict governing regime which holds all the authority. They see themselves winning out in that, and that's how they see it.
It's a reasonable and fair debate, but right now we're either proving their point, which is the West's failure to meet a challenge and to see that challenge early on, rather lends itself to the concept that they would espouse, which is that weakness is ultimately its downfall. My view is, we need to prove that to be wrong. The only way we can do that is by coming together and showing that we have unity of purpose. We are very clear about what the rules are and why they should be stuck to, and we're not prepared to accept the constant and blatant breaches of those rules, whether it be human rights or in trading matters. Therefore, there are consequences to those, and I think that's really important.
That's how would measure it. It's the battle between two ideologies, that of democracy and the concept of freedom, rule of law, and human rights, and that of a dictatorial strict regime formed around communist principles that is intolerant to all dissent and rules centrally with unelected governments. That is the challenge. It's the perennial challenge. It hasn't changed. It's our job, once again, to ensure that it is democracy and freedom that wins out in the end, not the other way around.
Ben Judah: My last question for you before I let you go is, if we don't stand up to China, what do you think the worst case scenario is by 2030? What will the world look like if we don't take action now?
Sir Iain Duncan Smith: Well, it'll be a very different place. It will be a place where endless countries become satellite states really I think, where they're not big enough or strong enough to be able to stand up to the sort of nature of the bullying and the threats that take place. I think the challenge for the West will be, our dependency will grow, our independence will shrink, and our ability to do anything in 10 years time will be much diminished. As I say, if the China plan is correct, by 2040 the Chinese will be the dominant nation. If that is the case, then that reduces our capacity to act across the board. The time is now, we must take that challenge. We must act now, we must come together and recognize where this path is leading us and change it.
Ben Judah: Iain Duncan Smith, thank you very much for joining us today.
Sir Iain Duncan Smith: My pleasure.