Cleverly warns Beijing that war with Taiwan would collapse Chinese economy

China’s economy would collapse if it went to war with Taiwan, James Cleverly said, as he defended his policy of “clear eyed” engagement with Beijing.

The Foreign Secretary said concerns about the strength of China’s economy were already forcing the ruling Communist Party to change course.

Mr Cleverly became the first UK Foreign Secretary to visit China in five years when he made the trip to Beijing in August.

At a Conservative Party conference fringe event hosted by the Spectator, Mr Cleverly said war between China and Taiwan would be a “massive failure of foreign policy” because “disruption across the Taiwan Strait is everybody’s business”.

Taiwan is a self-governing island that China claims and tensions have been running high in recent years.

Beijing has stepped up its military exercises aimed at the island, sending fighter jets and navy vessels to patrol and hold drills in the waters and skies around it.

Mr Cleverly said “huge international trade volumes go through that body of water” and war “would be a catastrophically bad thing for the global economy”.

It would also “collapse the Chinese economy” and “as we are now seeing, the Chinese economy is not all-powerful”.

He said preventing a Taiwan conflict “is an absolute core plank of UK foreign policy”.

Mr Cleverly said he believed following his conversation with counterpart Wang Yi in China that Beijing was sensitive to the risk of economic disruption as a result of its policies.

“I made the point that whether it’s the Philippines, which I visited just before going to Beijing, or the UK or the US or Australia or others, we are all taking measures which are just nudging down our trade volumes with China, and the cumulative effect is having a real impact on China.

“When I had that discussion he listened very, very closely, his officials were looking very intently.”

He said the Chinese people had already forced the government to change course over its zero Covid policy, in a sign of public dissatisfaction with Xi Jinping’s administration.

In an illustration of the state of China’s economy, Mr Cleverly said the UK estimates China’s youth unemployment is running at 25% and “there are more newly-built vacant properties than the population of the UK”.

He said that the UK has influence “when a British Foreign Secretary basically says ‘you need to do things differently, otherwise, you will see international trade subtly, gently trending away from you’” at at time when China is struggling to get the double-digit economic growth it needs “to fund its contract with its own society”.

Mr Cleverly also said he was encouraging African nations to process more of their raw materials domestically rather than sending them to China – which creates a “pinch point” which can become a “stranglehold” over international markets.

That would not only increase the resilience of supply chains but would also help “stop the boats” by providing an economic incentive for people in African nations to stay rather than risk crossing the Mediterranean to Europe and, potentially, boarding a vessel in the English Channel.

Mr Cleverly’s visit to China angered some on the Tory benches who want a tougher line on Beijing.

But the Foreign Secretary declined to criticise them, pointing out some had been sanctioned by the Beijing administration and “therefore have legitimate reasons to be really very frustrated with the behaviour of the Chinese government”.