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bluenile.com. A

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new Cold War, and this time

0:38

it's China versus the West. Welcome

0:41

to Political Fix, your essential insider

0:43

guide to Westminster from the Financial

0:45

Times with me, Lucy Fisher. On

0:48

the menu today, Chinese espionage in

0:50

the UK and beyond, PM

0:52

Rishi Sunak's defense plans, and

0:54

Labour's pledge to renationalize rail services.

0:58

So discuss it all, I'm joined in the studio by

1:00

my FT colleagues, George Parker. Hi George. Hi

1:03

Lucy. And Jim Pickard. Hi Jim. Hello.

1:09

So before we get on to the claims

1:11

this week of Chinese spying in the UK,

1:14

let's kick off talking about Rishi Sunak's

1:16

big move on defence. And Jim, you've

1:18

been travelling with him to Warsaw, to

1:20

Berlin. Tell us a bit about the

1:23

trip and what he announced exactly. So

1:25

we flew out from Stansted on

1:27

Monday morning. We went straight to

1:29

Warsaw, where the Prime Minister stood

1:32

next to NATO Secretary General Stoltenberg.

1:35

And he announced, kind of

1:37

out of the blue, that he had a

1:39

new plan, which was the defence spending in

1:41

the future. Instead of being on its current

1:43

trajectory of 2.3% of GDP, he

1:45

would be able to hit 2.5%. But

1:48

the devil in the detail, of course, is this

1:50

doesn't happen until 2030 slash 2031. So

1:54

Rishi Sunak has to win two general elections

1:56

in order to achieve this goal. But

1:58

it's obviously a big political story. in terms of party

2:01

management. He had loads of conservative MPs breathing

2:03

down his neck, wanting him to hit the

2:05

2.5 cent target. The other element of the

2:07

announcement was that aid or military aid to

2:09

Ukraine for the current financial year was lifted

2:11

from 2.5 billion to

2:13

3 billion. And a second story, which

2:16

was a little bit lost in the mix,

2:18

was that that 3 billion pounds they now

2:20

see as the baseline for future military aid

2:22

to Ukraine going forward for as long as

2:24

to the end of the decade, if the

2:26

war with Russia continues. Great.

2:28

So let's be fair. This is

2:30

a significant uptick in defence spending.

2:33

At present, the NATO goal for

2:35

defence expenditure is 2% of

2:38

GDP. Only 11 of the

2:40

Alliance's 32 nations actually meet that

2:42

level. So the UK is going

2:44

far and beyond, although it will take us six

2:47

years to get there. George, there's been

2:49

a lot of wrangling about Sunak's claim

2:51

that this is equivalent to 75 billion

2:55

extra. That's not quite the usual way of

2:57

calculating these things, is it? No,

2:59

I mean, there's not a lot of jiggly poker. This

3:01

is one way you have to add a cumulative total

3:03

year on year and you assume growth

3:06

in cash terms of the defence budget to

3:09

come to an extremely large number. And I think a

3:11

lot of people have poured cold water on that being

3:13

75. But in fact, the other thing, of

3:15

course, we should say is this is money which

3:17

the conservatives might spend if they win a

3:19

general election. It's a kind of promise it's

3:21

easier to make when you're not expecting

3:23

to win the general election, to put

3:25

it quite bluntly. But the political symbolism,

3:27

I think, is extremely important. This was

3:29

an effort by Britain

3:31

at the forefront efforts to increase military

3:34

spending, increase military support for Ukraine and

3:36

put Britain at the forefront of that debate.

3:38

Yeah, and he very clearly said he wanted attention to

3:40

be switched back towards Ukraine. Obviously, attention has been on

3:42

the Middle East for quite a long time, for obvious

3:44

reasons. I mean, I want to go back to the

3:46

75 billion pound figure, because as

3:48

George says, it's some quite strange assumptions around

3:51

that. I mean, it's basically baloney. It's basically

3:53

imagining a world where the British government kept the

3:56

fence spending at 64 billion pounds a year, which

3:58

is the current figure and didn't increase it. even

4:00

in nominal terms for six years. Yes, so Jim,

4:03

economists are saying the real figure is more like £20

4:06

billion. The government has said this is

4:08

a fully funded plan. It's funded at least

4:10

up to 2028-29, isn't it, from getting rid of 70,000 odd civil

4:12

servants and, they say, from apportioning a

4:18

larger part of the government's research and

4:20

development budget towards the Ministry of

4:22

Defence. However, economists are also

4:25

saying that frankly, in

4:27

order to meet this pledge, certainly by 2030,

4:30

there's going to have to be cuts elsewhere

4:32

and they're looking at unprotected departments, aren't they?

4:34

Yeah, exactly. So in his meeting with Olaf

4:37

Scholz, the chairman chancellor, this week, which was

4:39

the day after the Poland trip, Rishi

4:41

Sinak tried to maintain that all these things

4:43

were possible, tax cuts, national insurance,

4:46

increase in defence spending and also that

4:48

he could keep putting more money into

4:50

public services. But he defined public services

4:52

very specifically as education and health, which

4:54

of course the ring fence runs and

4:56

the ones that we all know are

4:58

not ring fenced. Quite a lot

5:00

of them, including justice, transport, local government, which

5:02

is on its knees, he likes to kind

5:04

of gloss over that. Even this idea though

5:07

of funding these increase in

5:09

defence spending by cutting the civil service, this is

5:11

the kind of thing you resort to when you

5:13

run out of all other options talking about coming

5:15

civil. It falls into the category of wishful thinking.

5:17

It's a bit like Labour saying

5:19

it's going to fill the hole created by

5:22

the Tories nicking their non-don policy by

5:24

increasing the rate of tax collection. One of those

5:26

things that would be nice to do, but much

5:29

harder to achieve in practice. But I had a debate with

5:31

Labour about this and they were saying, I mean, this is nonsense,

5:33

you can't cut the civil service by that much. And I said,

5:35

well, look, if you look at what David Cameron did in 2010,

5:37

he came in, he did

5:40

cut civil service numbers by, I think it's something

5:42

like 50,000. Please don't come back to me

5:44

if it turned out to be slightly different, but

5:47

yeah, around 50,000. The problem was that then unexpected

5:49

circumstances happened and we needed far more civil service

5:51

to stay with Brexit and to deal with the

5:53

pandemic. So the number returned magically back to where

5:55

it wasn't 2010. So the

5:57

Labour kind of thinks that proves their point that you can.

6:00

Pretending to the civil service, but who knows how

6:02

many citizens you need? Yeah, George, how do you

6:04

think. This is gonna land with the public. We

6:06

think this could lead to more cuts to prisons.

6:08

Courts Council's areas that are

6:10

already struggling to think people.

6:12

Are. Going to recognize that the world is a

6:14

more dangerous, polarized place in that this is

6:17

a much needed announcement. Or do you think

6:19

that could be a sense which they just

6:21

think we'll hang on? We prefer extra funding

6:23

for the health service, schools and other public

6:25

services. And if you must wear

6:27

the public right defenseman that us to

6:29

policies of the my is quite long

6:31

way down fall below the economy the

6:34

on the public services migration with costs

6:36

one the reasons why seen it was

6:38

at pains to say we can do

6:40

this without impacting on on line of

6:42

excess. Of play me

6:44

as possible camp are selling com.

6:48

And then asked. X.

6:52

Rays of the last. Finance

6:56

on. Our down to pass

6:58

a some a language use using was

7:00

part of conditioning a public opinions and

7:02

we are living in a much more

7:05

anger slowly towards something the defence industries

7:07

on a war footing as striking request

7:09

striking language so he's trying to raise

7:11

a vision and in doing so he

7:13

was remind people that the dangerous world

7:16

and he a Trident prime minister someone

7:18

the public and times you in difficult

7:20

times. Out.

7:26

Of the Us presidential elections as

7:28

a possibility that president appointed hapless

7:30

constables he possibly find from latin

7:32

sounds nice I'm you kind sir.

7:35

By Christmas I did a he's

7:37

strong and solid on defense and

7:39

in brackets the labour party haven't

7:41

so far as much as commitments

7:43

to increased been spending some drop

7:45

his body not and to raise

7:47

up the issue about importance of

7:49

election. Is. Still to me to

7:51

still seem like good politics because it's put

7:54

labor in a tough spot. They've got two

7:56

choices, right? they can i that much the

7:58

ambitions and given that the pulsar. They are

8:00

the ones heading into Downing Street and will be.

8:02

The next governments that would books the

8:04

means have to actually find a discussion.

8:06

And fum this pledge. All they

8:08

can stick to the current holding line which is that

8:11

they don't want to put a date. On reaching

8:13

two point five. Percent Yet they've welcomed the

8:15

ambition to get this. but they want to

8:17

hold a review or if they win the

8:19

election and see what the say to the

8:22

armed forces all what the national security threat

8:24

saw more the required resources would be spent.

8:26

A source says that allows the Tories to

8:28

create a dividing line on defense. Potentially big

8:30

step back. So kissed on his done a

8:33

lot to rebuild labor's reputation on defense of

8:35

the Us. Frankly, it was trust during the

8:37

Jeremy Corbyn era. Yeah, except hello,

8:39

unaffordable customer.bomb as his defense and

8:42

this Tesla says is all about

8:44

basically trying to leave the memory

8:46

semicolon behind because it's a little.

8:48

I'm Seth when the Tories say

8:50

that Corbyn labor. Wants to

8:53

plath Triton's and abandoned mates and have a

8:55

peaceful rosette that we know determine. Coburn personally

8:57

love the love stuff. He was discussed constrained

8:59

by the party base, he knows what would

9:02

happen if he becomes premise. Thus I think

9:04

the descends Labour has against the charge that

9:06

does a massive difference between them on the

9:08

two point five policies is that they can

9:11

point to Boris Johnson making same posts, his

9:13

recess enough and twenty twenty two bars Trump

9:15

has promised promised against and up sentences time

9:17

sex. Admit that we will have an awful

9:20

lot that from Labour to try had of

9:22

that stuff. On our side of the one thing that.

9:25

Access you place traces the the Rebel

9:27

Six where the idea of a strong

9:29

defender new country been proud of your

9:32

country, standing up to your enemies. Big

9:34

visceral thing for the counterparties. Parsing

9:37

former rebel seats and.

9:40

You know though to gyms right? the labour

9:42

so far have a match. The tune ups

9:44

and spending women just go around the country.

9:46

Seats labor posters up with union jacks on

9:48

the sides you saw this week. To

9:51

starmer boosting the them for were training

9:53

grounds and George's path posing in front

9:55

of some George's flags aphorism defense we

9:57

don't hear a lot more about that.

10:00

This election that we did certain he bought

10:02

into a nineteen chimp it any slight. Cats

10:04

writing says that yes is completely right that

10:06

your typical swing voters of is a patriot

10:08

monster hit straw Things about sense of patriotism.

10:10

Do. They want more pounds. Sketch was the

10:13

fence. Principal. House for her soap

10:15

operas. Ghost is a whole. didn't press ought.

10:17

To just a selfish list of the topic by

10:19

took that the timing. Of seen at taking

10:22

this trip this week ahead of the local

10:24

elections next week. He mentioned. How this plays

10:26

in the Red Wall and and Gemini heard on

10:28

the poor Cost a few weeks ago from Loot

10:30

Trail. He says that is the key criticism of

10:32

Seen I Can the Red Bull the he seen

10:35

as weak so you know appearing very strong on

10:37

the world stage with this kind. Of you

10:39

know you're bleeding Pledge And. What's

10:41

that done? To quell some of the anguish in

10:43

the party? More. Abyss And

10:46

obviously this is extremely sensitive time for resisting

10:48

of the local elections Meron actions coming up

10:50

on my second. Some

10:53

Tory mps will stop me unless

10:55

of my comfort prime minister and

10:57

against him hum of the people

10:59

doing that. They are almost exclusively

11:01

on the rights of the conservative

11:04

party, so it's extremely useful for

11:06

snacks for example royals and Viceroy,

11:08

and about. A sweet

11:10

and contract much and when

11:12

something awesome been them talking

11:14

about at least trying com

11:17

os and when people. Asked

11:21

by more than talking

11:23

about whether it's enough?

11:26

We. Don't know nobody for hims the moment of

11:28

truth next week on. Awesomely!

11:32

Five hundred council seats. If I

11:34

lose oxygen out my

11:36

anxieties. Ali and orbits could be a.

11:43

Labour have also been out and about

11:46

the sweet to unveil a big policy.

11:48

Each didn't either. Munching about This is,

11:50

well, Labor's pledging full nationalisation of the

11:52

passenger rail network within five years of

11:55

coming to Palace gives the details. So.

11:57

this is about plus it we've known a little about

11:59

quite a long time. But finally, the light is

12:02

coming at the end of the tunnel. And we

12:04

have, please forgive me for that one.

12:07

No, you're not. We finally have the details of how

12:10

it's going to work. And then re-nationalization of the

12:13

railways is going to be a little bit faster

12:15

than we thought. We thought that a Labour government

12:17

would wait for the existing franchises to reach their

12:19

end term and then come into state control. They've

12:21

been quite clear that actually there's a couple of

12:24

other ones which would choose to keep rolling beyond

12:26

a first Labour term. And actually, because they're extensions

12:28

of actual franchises, Labour is making quite clear that

12:30

they would bring them in-house as well. It's

12:33

a really interesting one because, of course, under Corbyn,

12:35

the predecessor, the more left-wing predecessor,

12:38

half a dozen industries were going to be

12:40

nationalized. This is the only one of those

12:42

policies that has survived. It's very clear to

12:44

me that this was the most obvious one

12:46

to go for. If you were Keir Starman,

12:49

you wanted to be a little bit left-wing,

12:51

but basically Blair Wright at the moment, who

12:53

knows where he'll be in three years' time. But at the moment, he's a

12:56

Blair Wright. He's doing this as a sock to the left. And

12:58

it's pretty easy to do because two things

13:00

have happened over the last half decade. The first

13:02

one was that 40% of the railway

13:05

fell under state control just because loads of

13:08

franchises went wrong. All sorts of franchises went

13:10

wrong from Trans Pennine Express, the LNER was

13:12

the first one in 2018, A

13:15

Riva, Caledonian. All these

13:17

franchises went into conservative

13:19

government nationalization. They

13:21

don't like to boast about it, but the toys have been nationalizing like crazy.

13:23

And then, of course, the pandemic happened. And what we had

13:25

was a system where the industry needed paining out because none

13:28

of us were allowed to go anywhere. And

13:30

the industry took over 20 billion pounds of

13:32

subsidy, and they emerged with passenger levels much

13:34

lower than they were. A figure

13:36

here was amazing to me that at the end of last

13:38

year, we still only had 82%

13:41

of the previous passenger levels from pre-pandemic, even

13:43

though the pandemic's years ago.

13:45

And therefore, at the point where

13:47

they were giving all this money, they basically re-engineered

13:49

the system so that these companies run their railway

13:52

lines on a contract basis. Like, you know, you

13:54

basically, there's no performance fee, whether you do well

13:56

or whether you do badly, just get given a

13:58

certain amount of money. of set fee

14:00

and in fact the ONS already classifies it

14:03

to all intents and purposes as nationalised. George,

14:05

are there some difficulties here? Labour

14:07

said its plan includes exercising brake

14:10

clauses to end earlier handful of

14:12

rail contracts that would otherwise continue

14:14

into the 2030s. Are they

14:17

going to have to pay colossal compensation for

14:20

using these brake clauses? I'm not

14:22

sure how colossal the compensation will be. I mean obviously

14:24

as Jim was saying the reason they've gone after the

14:26

nationalisation of the railways is it's the cheapest thing to

14:28

do and the most popular thing to do. I mean

14:30

nationalising other parts of the water

14:32

companies for example. That would be a total

14:34

disaster from a Labour government's point of view.

14:37

I'm tragically old enough to remember the days

14:39

of British Rail and there is a sort

14:42

of certain part of the railway

14:45

fraternity who hark back to the golden days

14:47

of intercity 125s

14:49

and if anyone can remember it will

14:52

know that the British Rail experience was not a

14:54

particularly happy one. The food was rubbish and the

14:56

toilets were disgusting. The trains were often cancelled. So

14:59

anyone who thinks that nationalising the railways will be a panacea

15:01

I think could be in for a rude

15:03

awakening. It is true that some of the franchises

15:06

that have been taken back into public ownership like

15:08

the L and ER route have been run in

15:10

a very effective way. So I'm not saying it's

15:12

impossible but I think just changing the ownership structure

15:14

in itself isn't going to be enough and

15:16

I think the danger is you've

15:19

got a nationalised railway sector with a very

15:21

strong railway set of railway unions

15:23

as well who as we know from

15:26

recent experience are very prone to strike. There is

15:28

a danger for a Labour government they're taking on

15:30

potentially a whole world of pain which at the

15:32

moment they're able to pass off back to the

15:34

franchise owners. Yeah exactly. At

15:36

the moment you can blame the private companies but they're going to be

15:38

the only ones who are responsible. One obvious

15:41

benefit you could get is that instead of

15:43

having this fragmented system where you're dealing with

15:45

different companies or tickets are different, at least

15:47

if it's one monolithic organisation that bit might

15:49

be a bit easier to understand for consumers.

15:52

George, the Conservatives agree that something needs

15:55

to change don't they because they've also

15:57

pledged to introduce rail reforms if they

15:59

win the next election, they've said they'll

16:01

introduce a new state body to oversee

16:03

the sector and give private train

16:05

companies operating underneath it greater

16:08

commercial freedoms. Is this

16:10

at all credible? Why haven't they done it

16:12

before now? So they've been talking about this

16:14

for some time and it hasn't got all that far.

16:16

I mean, I think it would still be good if

16:18

I don't think anyone really

16:21

would welcome the return of a monolithic single

16:24

national rail operator in the way we had in the past.

16:26

I think under Labour's plans, they will

16:28

still allow a few smaller companies

16:30

to operate. These are called the

16:32

open access model, Jim, that you're allowed

16:34

in. There are some great sort of little

16:36

micro rail services which operate on the railways,

16:38

which I think people really enjoy using. And

16:40

I think having innovation still in the system

16:43

somewhere is a good thing. Jim,

16:45

is there any sense of how much this will actually

16:47

cost? Can a Labour government afford it? So

16:50

the interesting thing about this is that as

16:53

the franchises come up to breach their end,

16:55

they literally just no longer have a franchise and

16:57

the government takes over. So in theory, it shouldn't

17:00

really cost much more than that. The best thing

17:02

that the rail industry could come up with is,

17:04

you know, shorn of all competition, you know, operated,

17:06

you know, people be more lazy, like, make a

17:08

sort of sound a bit like a Soviet railway

17:11

system. But even in terms of the accounting on

17:13

this, the assets and like this, he's already on

17:15

the government books because of those reforms I was

17:17

talking about during the pandemic. So the

17:19

Tories will try and claim that everything will cost a fortune,

17:22

but it's not obvious to them what actually, which is George

17:24

was saying was one reason they chose it. And

17:26

George, just finally, is there any sense that

17:28

this could be the stepping stone to

17:30

Labour looking at least at nationalising

17:32

other industries? You've both mentioned how

17:35

the Corbyn era, there were

17:37

pledges to renationalise water, energy,

17:39

even the broadband network. No,

17:42

I think it's the answer to that. I think the

17:45

Labour government got up on their plate without

17:47

renationalising, you know, and paying huge amounts of

17:49

compensation out to shareholders to bring companies

17:52

back into the state sector. I mean, I think

17:54

the truth is that when you go back to

17:56

the Thatcher privatisations and the railways that John Major

17:58

privatised, there were some good ones and some

18:00

bad ones. And the bad ones, I think we can all

18:02

agree, include the railways and it's becoming

18:05

absolutely painfully obvious, the water sector. On

18:08

the other end, there have been some other ones like,

18:10

for example, privatising British Airways, British

18:12

Telecom, British Gas, which have

18:14

been a bit more successful adventures than in

18:16

terms of consumer satisfaction. And those are

18:19

sectors which have been exposed to a certain amount of competition.

18:21

I think the problem is where you

18:23

privatise essential monopolies

18:26

and then regulate them badly. That's the problem. I

18:29

don't think the future Labour government

18:31

has any appetite for re-nationalising whole

18:34

ways of the private sector. I

18:36

mean, one thing we know about Jeremy Corbyn is that

18:38

he was so doctrine there that that's not something for

18:40

him was a kind of tectonic thing that he wants

18:42

to pursue. He would have quite happy nationalised your jacket

18:44

or the company that made the coffee in the next

18:46

year, George Wrowers. One thing we've learnt about the summer

18:48

is that he's very, very pragmatic. Earlier,

18:55

we discussed Rishi Sunak's trip to Warsaw

18:57

and Berlin. This week, where

18:59

he also mentioned the threat from China. That

19:02

takes us nicely onto our next

19:05

subject, which is Chinese espionage. Two

19:08

men in the UK, including a former parliamentary

19:10

aide, have been charged this week with spying

19:12

for Beijing. The FT's China editor, James King,

19:15

is here to tell us more. Hi, James.

19:17

Hello. Remind us the details of

19:19

this latest case. We don't

19:21

know that many details, but Christopher

19:23

Cash, who is a former parliamentary

19:26

aide and Christopher Berry, will

19:28

be charged with, quote, providing

19:30

prejudicial information to a foreign

19:32

state. And that foreign state

19:34

obviously is China. They're

19:37

due to appear at the Westminster

19:39

Magistrates Court on Friday. We

19:41

don't know in any detail what they're alleged to

19:43

have done, but the head

19:45

of the Counterterrorism Command at the

19:47

Metropolitan Police said, this

19:49

has been an extremely complex

19:52

investigation into what are

19:54

very serious allegations. Christopher

19:57

Cash was a former company director

19:59

at. The China Research Group

20:01

which is an organization set

20:03

up by conservative parliamentarians so

20:06

that sits within parliament and

20:08

therefore he had access contacts

20:10

with many of the senior

20:12

politicians that that occupy parliament's.

20:14

I should say that in

20:16

the past he has said

20:18

that his innocence. And this accusation

20:21

the Uk comes on the back of

20:23

other stories elsewhere in the easy, particularly

20:25

in Japan, Germany, and that. In Chinese

20:27

spying. Way we seen so many

20:29

stories Now do you think. The yes,

20:31

I mean it really has

20:33

been quite a week in

20:35

Germany. What we've seen is

20:37

a husband and wife couple

20:40

Ina and Herwig as they're

20:42

just been identified as that

20:44

by German authorities and they

20:46

have been arrested on having

20:48

conspired to smuggle sensitive military

20:50

technology including a sophisticated laser

20:52

out of Europe. On. Orders

20:54

from Chinese Intelligence. The other

20:56

case involves a staffer who

20:58

worked for a German far

21:00

right member of the European

21:02

Parliament and the star for

21:04

his name is Jen. Cool.

21:07

He has been arrested and

21:09

he's accused by Germany's Federal

21:11

Prosecutor of being covertly employed

21:13

by China's Ministry of State

21:15

Security. that's obviously China's big

21:17

espionage body, so they really

21:19

has been a lot going

21:21

on. As I said, there's.

21:23

No evidence to link any of these

21:25

cases, and given the fact that often

21:28

these has been us cases take many

21:30

months or years to kind of you

21:32

know, bill of a case in come

21:34

to fruition. It may be that they

21:36

have very separate antecedents, but taken together.

21:38

All of this I mean to me,

21:40

it's got. more than a whiff

21:43

of the old cold war returning

21:45

to europe obviously it's in this

21:47

case with not the former soviet

21:49

union being these are the country

21:51

and focus but china and i

21:53

think that represents a step chains

21:55

for the last forty years most

21:57

of the last forty years anyway

21:59

it's year relationship with China has

22:01

been preoccupied with commerce, with trade,

22:03

with European companies investing in China,

22:06

etc. But now I think national

22:09

security is really moving to the

22:11

forefront. And this is going

22:13

to create, and already is creating, a

22:15

world of pain for European

22:17

companies. Part of the problem is

22:20

not just the focus on espionage,

22:22

but also the way in which

22:24

products these days have changed. So

22:27

in the past, let's say go back 20,

22:30

30 years, or maybe to the previous Cold

22:32

War, most products were fairly dumb. But

22:35

now they all collect your data,

22:38

whether it's your electric vehicle, or

22:40

your smartphone, or some kind of

22:42

telecom equipment, or an

22:44

AI application, everything is collecting

22:47

your data. And therefore, a

22:49

lot of things have a

22:51

spying or information component to

22:53

them. And I think that

22:55

creates huge complications for every

22:58

national government in Europe. Because

23:00

also this week, we've seen this dawn

23:03

raid in Brussels on Nuketech,

23:05

the Chinese company that

23:07

provides security equipment, x-ray

23:09

scanners, human scanners, across

23:12

a lot of the European

23:14

Union. And it's the first

23:16

time that Brussels is using these anti-foreign

23:18

subsidy laws. But there's some suggestion that

23:20

it's partially motivated by concerns about the

23:22

use of the data by this Chinese

23:24

company. So it seems to be a

23:27

crossover of the elements you're talking about.

23:29

Yes, absolutely. We don't really know

23:31

whether it's the subsidy issue that's

23:33

motivating Brussels, or whether it's a

23:35

national security issue. Both

23:37

of these things seem to be in

23:40

play. But it's amazing to me that

23:42

this Chinese company, which used to be

23:44

headed by the son of China's leader

23:46

Hu Jintao, and is known

23:48

in Beijing to be a company with

23:50

military links. It's a company

23:53

that's been flagged up by US

23:55

intelligence as having military links. And

23:57

yet in 25 European countries, The... Products

24:00

of a new tech are being

24:02

deployed in airports and ports in

24:05

order to x ray your baggage

24:07

or or stan your belongings. And

24:10

therefore, this company new tech obviously

24:12

would have access to an amazing

24:14

array of very sensitive personal information

24:17

across Europe is absolutely amazing To

24:19

me that the European Union has

24:22

allowed this to go on without

24:24

a peep, even while the Us

24:26

has been raising the alarm. And

24:30

James I mean Eve were in

24:32

China just a couple of weeks

24:34

ago. You are knowledgeable about the

24:36

nation than seventy anyone else I've

24:39

ever come across. How do you

24:41

consider your personal approach to technology?

24:43

Devices dated to avoid Chinese manufacturers

24:45

when it comes to your household

24:48

goods, your phone applications you use

24:50

on your mobile. I was

24:52

just in China earlier on this month.

24:54

I just follow the normal protocol of

24:57

birth of people who care about such

24:59

things and going to China I I

25:01

am very careful about Chinese social media

25:03

apps. one up in particular in China

25:06

is cool we'd shot Everybody uses it

25:08

for communicating with all sorts of people

25:10

and for paying for products while you're

25:12

in China. I just follow the protocol

25:15

of of buying a a burner phone.

25:17

I'm putting my we chat on the

25:19

burner phone so that I'm not at

25:22

risk. Of having my actual phone taps

25:24

or the information on that tapped by

25:26

armed forces unknown to me, I would

25:28

say that is really standard procedure these

25:31

days. I would say I'm not particularly

25:33

skittish about such things, but if he

25:35

worked for foreign accounts and Ceo Aura

25:38

consoles and states or a foreign government

25:40

now you're going into China, I would

25:42

bet that ninety nine percent of them

25:44

fun of that protocol. Well, I said

25:47

he knew someone he didn't and and

25:49

on their at regular snowball while in

25:51

China. Using we chat send a picture

25:53

of we need a taste of costs. Are

25:56

is banned in China because as the

25:58

likeness with she's Pain. This person

26:00

is and we chat. Countless is terminated. They didn't

26:02

have any easy ability to pay for goods for

26:04

the rest of their. Trip which and

26:06

sounded very inconvenient to say the least,

26:09

gives back to the series. Matter of

26:11

of this is the geopolitics hair class. All

26:13

of this headed it feels. Like tensions

26:15

are growing between at the Uk

26:17

in China. Between you and China.

26:20

And what about the Us and China?

26:22

Will it make any difference in America's

26:24

policy? Depending on whether it's Biden or

26:26

Trump who wins the White. House. Election?

26:29

Yes a good person above us. I mean

26:31

we need to. Recognize.

26:33

That it was the Us that

26:35

started all of this. In other

26:37

words, this hyper vigilance attitude towards

26:39

China Chinese buying China's access to

26:41

data, all kinds of issues with

26:43

regard to Chinese companies investing in

26:45

the Us and doing business in

26:47

the Us. and I think really,

26:50

that spread from the Us over

26:52

to Europe over the last few

26:54

years. I don't really think for

26:56

whether it's Biden and White House

26:58

or Trump in the White House

27:00

will make much difference. This this

27:02

type. Of Security Alert with regard

27:04

to China is absolutely embedded in

27:07

the Republican Party and the Democrats

27:09

as well. I think it's now

27:11

died in the world that the

27:13

Us and China will have an

27:16

adversarial relationship, particularly in these national

27:18

security areas and red lines In

27:20

terms of what can be traded

27:22

with China, what can what type

27:25

of investment can go ahead will

27:27

become clearer and clearer, more and

27:29

more entrenched over the next. I

27:31

would say five. Ten Years so

27:33

that you know this Cold War

27:35

analogy is not such an idol

27:38

analogy. Obviously there are a huge

27:40

differences there were there was hardly

27:42

any trade between the former Soviet

27:44

Union and Europe and and the

27:46

Us and now China is one

27:48

of the biggest trade partners of

27:50

of the entire European Union and

27:52

also with the Us so they're

27:54

are. There are a great differences

27:56

but I think the of the

27:58

motivating forces of very similar. In

28:00

other words, the suspicion that the

28:02

Us has and Europe has and

28:05

is building towards China is very

28:07

deeply rooted to my way of

28:09

thinking. This will simply spread over

28:11

the next five ten years. It's

28:13

very difficult to see either side

28:15

passing things up. And just

28:17

a word about direct relations with China

28:19

decided the Atlantic World Uk. Any use

28:22

falling behind the Us. I mean,

28:24

we know that as squirming consternation

28:26

from western nations about China's assistance

28:28

as to Russia and it's war

28:31

against Ukraine. I. Think

28:33

all of the European countries want

28:35

to maintain a profitable commercial relationship

28:37

with China, but they want to

28:39

do that in such a way

28:41

that doesn't impinge upon their national

28:43

security. That will become more and

28:45

more difficult balancing act for all

28:47

kinds of reasons. One of the

28:49

reasons is that the the Us

28:51

is stepping up the national security

28:53

alert with regard to China, so

28:55

I think every country in Europe

28:57

will try to balance this. It

29:00

will really not be easy and

29:02

and. With we just have to see

29:04

which way it goes. I saw frequently hard enough.

29:06

As running coming new British government

29:09

as as I arguments can be

29:11

walking and media challenges it might

29:13

I might be Tic Toc might

29:16

be Electric vehicles can be pretty

29:18

participation. The patient instructions estimate by

29:20

what you think the first plus

29:23

points could be. A. It

29:25

is hard to know which would be

29:27

the first first points, but I think

29:30

all of those so Tic Toc Obviously

29:32

we've seen that the Us Congress as

29:34

as just voted to have to strip

29:36

Tic Toc out of of the Us

29:39

under certain conditions that may well come

29:41

to Europe Electric vehicles. I was driving

29:43

a B Y de jour in Germany

29:46

earlier on this month. There's no doubt

29:48

that these Chinese electric vehicles, the collecting

29:50

people's data all over the the European

29:53

continent does that matter for me. Personally

29:55

not really because I have nothing

29:57

to hide. it's not have any

29:59

interest. I drove from Bremen

30:01

to Bremen port to anybody. but

30:04

for some people in Europe, that

30:06

really does matter. And if you're

30:08

doing this on a mass scale

30:11

and you've got hundreds of thousands

30:13

of Chinese electric vehicles all over

30:15

Europe then that could give security

30:18

services some very useful and sensitive

30:20

pieces of information. So I think

30:22

anything to do with a Chinese

30:25

product and data becomes very serious.

30:27

I also think this wage between.

30:30

The Uk and China which is

30:32

being driven mainly I think by

30:34

the fact that the Uk feels

30:37

as to cleave closely to Us

30:39

policy and Us policy towards China

30:41

is has been getting more adversarial

30:43

for several years now. Who.

30:50

That just leaves time for the political

30:52

Six stock picks door to you buying

30:55

or selling this week. Putting. In

30:57

the past I've thought of souls james

30:59

Cleverly time sacrifice I'm going to buy

31:01

him. This. Week I'm not just

31:03

because. He stepped

31:05

into the breach of these have a

31:08

monthly as covering lox where we vice.

31:11

Chair of the Press Gallery when and we have

31:13

a bit of a flurry. didn't really think is

31:16

fair said the subway when we hiked. Way of

31:18

saying we had Jeremy Hunt the chance to schedules

31:20

comes as we can tap boucher he was a

31:22

in Ukraine that we didn't find out to quite

31:24

late on that atheist as St. James cuddly stepped

31:27

into the breach or made a very amusing and

31:29

interesting speech on see One Joke which is extremely

31:31

good he said when he was removed from the

31:33

Foreign office since the home. Of is it was

31:35

done on the basis of diversity in the companies

31:37

in the the lack of old etonians and that's

31:40

what David Cameron came in with them when the

31:42

news was delivered to and the pretty soon it

31:44

looks pretty soon it looks him in the eyes

31:46

but he had to stand on his wallet to

31:48

do so. it was guides and it's a you

31:50

know good chunk source go down well with an

31:53

assignment spur also cause the Rwanda bills and got

31:55

royal assent. This. week sites the time

31:57

the least least until the run to post

31:59

the operator is operationalized and we discover it

32:01

doesn't work at all. I'm buying

32:03

James Cleverley. Yeah. I wonder if

32:05

that joke has peaked people in Downing Street, but I'm

32:07

not like soon that would be in a much of

32:10

a position to do anything about it. Jim. So

32:12

I'm going to buy Ben Houchin, the mayor

32:14

of Tees Valley. And the basis for me

32:16

buying Mr. Houchin is that it's not impossible

32:19

in a year's time. He is

32:21

the most senior conservative politician with

32:23

any kind of power over any budget in

32:26

the entire country. Well, do you think he's

32:28

going to win the Tees Valley mayoral election

32:30

next Thursday? I have family and

32:32

friends around that area and he's still

32:34

pretty popular in that region. He's campaigning

32:36

very heavily. He's not a conservative. His

32:38

election material doesn't really remind people which

32:40

party he belongs to. And we

32:43

think he could just about survive in the West Midlands, but

32:45

if the Andy Street doesn't, and if the

32:48

conservative government falls, which is what most people expect,

32:50

Houchin could be lost when standing. James.

32:54

I think I'm probably going to sell

32:56

the German Chancellor Schulz. He went to

32:58

Beijing earlier on this month and by

33:01

all accounts, it was a bit of a disappointment. He

33:03

didn't mention some of the

33:05

previous policies that have been mentioned

33:07

by prominent European politicians. He

33:09

didn't talk about de-risking between China

33:12

and Germany or China and the

33:14

EU. He focused mainly on German

33:16

business interests, which is kind of

33:19

understandable. But as a non-German, I

33:21

guess I'd prefer to see, well,

33:23

a more European approach. Lucy,

33:26

are you buying or selling? I

33:28

am selling Hamza Yousaf, whose stock

33:30

is plummeting. It's been a difficult

33:33

month for him. He saw

33:35

Peter Murrell, the former chief

33:37

executive of the party and of course,

33:39

husband of Nicholas Sturgeon, re-arrested and charged

33:42

about embezzling party funds. And

33:45

then his coalition administration fell apart

33:47

when the Scottish Greens withdrew. And

33:49

at the time of recording, the

33:51

Greens, his former partners, are teaming up

33:54

with the Scottish Tories to host a

33:56

no confidence motion in him. So it's

33:58

all looking pretty precarious for him. First

34:00

Minister. Well thank you very much

34:02

to my guests this week, George Parker,

34:04

Jim Pickard and James King. Thank you.

34:08

And that's it for this episode of the

34:10

FT's political fix. Before we

34:12

go, a reminder that you can join

34:14

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34:48

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34:51

Manuela Saragosa is the executive producer

34:53

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34:56

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34:58

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35:00

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