The West must get ready for the coming clash with China

On the 5 March 1946, American and British officials signed a then secret agreement that stands – in the context of both the Cold War and what is about to come next in relations between China and the Western democracies – as one of the most significant documents  of the last century or so.

In the British US Communication Intelligence Agreement the two governments agreed to formalise and improve the improvised, sometimes patchy, cooperation that had taken place during the Second World War and to create a more formal mechanism for sharing intelligence about the Soviet Union and other threats.

“The parties agree,” runs the text, “to the exchange of the products of the following operations relating to foreign communications. 1) collection of traffic 2) acquisition of communication documents and equipment 3) traffic analysis 4) cryptanalysis 5) decryption and translation 6) acquisition of information.”

The “products” referred to politely are the fruits of eavesdropping, interception and espionage – spying. What the agreement meant was that the British and American intelligence authorities pledged to share intelligence securely with each other as though they had collected it themselves, undertaking not to pass it on to any other power. They were building a closed transatlantic network, a steel loop, by promising to protect each other’s secrets.

The implementation of the Communication Intelligence Agreement was far from straightforward. Documents released in the National Archive a decade ago show that when the two sides met six days later in London for  a “technical conference” at 35 Grosvenor Square there was, after expressions of thanks for hospitality, a tussle.

Typically, the British wanted a get out allowing their intelligence service to refuse to hand over information to the US if it was deemed not in the British “national interest” – perhaps the most self-serving, flexible and hypocritical of British phrases. The Americans asked if the British empire and its then still sprawling dominions were covered by the agreement. They were. Under the chairmanship of Major General Sir Stewart Menzies, Chief of MI6, it was all smoothed out.

Out of those discussions and subsequent agreements grew Five Eyes – the US, the UK, Australia, New Zealand and Canada. It remains the world’s most important alliance that gets little in the way of public attention.

After Covid-19 as the democracies look for ways to combat an ever more belligerent China, led by a Marxist-Leninist determined to impose total control at home and obedience abroad, we will be hearing a lot more about Five Eyes, I suspect.

For now, we hear a lot in Europe about the diplomatic ambitions and efforts of the European Union. But in the stand-off and possible conflict to come the European Union is about as much use against China as a chocolate fireguard. The EU’s major power – Germany – wants to improve relations in order to get exporting to China again. Germany’s Chamber of Industry and Commerce, DIHK, says that as many as 900,000 jobs in Germany hang on exports to China.

Although France is close to Germany, its main defence, security and intelligence relationship is with Britain, where the two nations are interwoven operationally.

NATO too will have problems being much use. It may not be completely “brain dead” strategically, as President Macron of France famously said. Nonetheless, its primary focus is the security of Western Europe and there it is divided, as is made clear in a new paper by Britain’s former National Security Adviser Sir Peter Ricketts. The alliance is ostensibly an alliance of democracies, but Ricketts says that the actions of a country like Poland may, at some point, require other NATO powers to impose penalties. Is Italy, a G7 member, much poorer and angrier after the Covid-19 crisis, a reliable ally against China? Perhaps not, when a populist government will likely forge a relationship with the highest bidder offering cheap technology and loans in return for subservience. “I fear the populists will sell Italy to China,” says another veteran diplomat.

With the old alliances fraying, and Europe split, we need a new way to think about the West.

By far the best available foundation for doing so is an alliance that already exists, Five Eyes, a partnership of democracies committed to freedom and the rule of law, tooled in security and intelligence, prepared to contribute properly to defence costs and determined not to be bullied by the Chinese Communist Party.

Countries such as Japan and South Korea could be added to this emerging security alliance. Indeed, there is much interest in foreign policy circles in the D 10 notion – the G7 plus India, along with Japan and South Korea. India (with China causing mayhem on its border) will struggle to work out to what extent it wants to sit with the West, though.

Helpfully, Five Eyes already sits at the centre of a series of related intelligence alliances. Nine Eyes includes in addition France, Norway, Denmark and the Netherlands. The SIGINT Seniors group in Europe adds Sweden, Spain, Belgium, Germany and Italy.

Five Eyes is the closest relationship by far. They have shared, on a basis of total trust, intelligence about threats and developments, through the Cold War and the ongoing fight with Islamist terrorism.

Occasionally, you’ll hear the pact referred to dismissively as “Two and a half Eyes” because the superpower Americans and much smaller British dominate the alliance thanks to the scale of their listening capabilities. But dismissing the other three members is silly, especially when Australia now matters so much. It has been a major trading partner of China – thanks to its minerals and raw materials – and it now finds itself in an extremely awkward position, bullied and threatened by an aggressive Chinese Communist Party. The state-controlled Chinese media has warned that Australia will “feel pain” after its government criticised the crackdown in Hong Kong.

It remains a mystery why the Chinese Communist Party leadership thinks that making these threats is likely to induce any but the most supine country – desperate for exports – to allow China too embed itself itself in the heart of their economy and society. “Be our friend and shut up, or we will crush you” is not much of an inducement to a deeper relationship.

This is, presumably, what prompted the Australian Foreign Minister minister this weekend to describe Five Eyes as Australia’s “pre-eminent” international relationship.

Suddenly, after China’s egregious behaviour in Hong Kong there is a scramble on to counter China.

The British government announced this week that it will ban the Chinese telecoms giant Huawei from involvement in the 5G network over security fears. This is an embarrassing reverse for a British political establishment that decided in the mid-2000s that China was the future and should be accommodated whenever possible as a source of needed investment.

The threats of the US government – with the Five Eyes relationship at long-term risk – helped force a change of policy. It was not only about US pressure, however. After China’s introduction of a draconian new security law in Hong Kong a more muscular British foreign policy has started to emerge – notably tougher on China than the supine EU and more in line with that group of worried democracies including the Australians and the Americans.

Incidentally, the Huawei decision produced the wonderful, ironic spectacle of the Chinese Ambassador in London, Liu Xiaoming, using Twitter this week to lecture Britain about openness and fairness. Twitter is blocked in China.

He said: “Disappointing and wrong decision by the UK on Huawei. It has become questionable whether the UK can provide an open, fair and non-discriminatory business environment for companies from other countries.”

In the US, the crisis is escalating, rapidly. Almost every day brings fresh news of an ever more robust American position. On Thursday, the US Senate passed legislation clearing the way for sanctions to be levelled against Chinese officials involved in slave labour camps in Xinjiang. The bill was bipartisan.

US Attorney General William Barr also warned in a powerful speech this week that China has launched an “economic blitzkrieg” against the United States.

“How the United States responds to this challenge will have historic implications and will determine whether the United States and its liberal democratic allies will continue to shape their own destiny or whether the CCP and its autocratic tributaries will control the future,” Barr said in Michigan.

“The People’s Republic of China is now engaged in an economic blitzkrieg, an aggressive, orchestrated, whole-of-government, indeed, whole-of-society, campaign to seize the commanding heights of the global economy and to surpass the United States as the world’s preeminent superpower.”

Barr’s boss, President Trump, has behaved so erratically in office that it is difficult to see him being a collegiate or congenial leader of any new alliance. A new president might stand a good chance of reorganising and aligning Western interests. Either way, there is a overwhelming bipartisan clamour to combat China.

The risk in all this is obvious from a reading of history and how crises escalate. It is now perfectly possible (and not remotely desirable) that a cold war could become something much hotter. War may happen much quicker than anticipated, either by accident or by Chinese design and a push on freedom-loving Taiwan. Six months ago all manner of terrible events – lockdown, a 25% fall in GDP – were regarded as unimaginable. They have since come to pass.

The historian Francis Fukuyama wrote most convincingly, in a recent essay for the American Interest, about how to navigate this dangerous phase in China’s rise. The aim should not be – repeat not – bellicosity or the pursuit of military conflict. China is a large, totalitarian state that will either change internally or it will not.

The best that a new Western alliance can do is organise itself to resist Chinese influence and led by the US protect the democracies using our collective resources in intelligence, security and defence. Plus ensure in our universities we win the technology race – in areas such as AI – so that an expansionist totalitarian China does not become our technological superior ranging free to enforce its will.

None of this is comfortable to hear, especially post-Covid, when we hanker for a swift return to normal. But it is unavoidable when  China is led by a totalitarian whose state demands what we would be mad to give him – that is our compliance.

This crisis represents as big a readjustment in our assumptions as anything experienced since the Cold War.

Whereas the story of the last thirty years has been, primarily, about free trade, the era we are moving into is going to be mainly about freedom and the struggle to preserve it.