It is difficult to underestimate the significance of the recent transformation in relations between the UK and China. There are many examples in recent years of countries moving towards a closer relationship with China: the distinctiveness – and significance – of the British case lies in the fact that the UK has regarded itself – and been seen as – America’s closest ally ever since the Second World War.

It was not always so. Between the First and Second World Wars, there was an intense struggle for supremacy between Britain, the declining imperial power, and the United States, the new rising power. Although by the late 1930s it was clear that the United States would become the new hegemon, it was the Second World War that burdened the UK with huge debts and spelt the beginning of the end of its imperial role. At this point it was faced with an historical choice: to fight an increasingly unequal battle with the US for supremacy or seek an alliance with the latter, albeit as very much a junior partner. It chose the latter. Ever since, the relationship between the two countries has been extraordinarily close. The postwar alliance between the US and the UK is the most important example in the modern era of a rising power and a declining power making peace with each other after a period of growing rivalry.

The closeness of this relationship merits further elaboration. Apart from the friction between the two countries over Britain’s intervention in the Suez crisis in 1956, it is difficult to think of another example where they have been in serious dispute. Indeed, they have been more or less inseparable, a fact reflected in the extremely close relationship between their foreign and defence ministries and their security agencies. The ‘special relationship’, as it has been long known, has been a foundation stone of British foreign policy for seventy years, albeit with the UK cast in the role of the evermore junior and subservient partner.

Without this background, it is impossible to understand the significance of Britain’s pivot to China. The key moment in this process was the UK’s decision last April to join the AIIB. Prior to that, all 22 members of the bank were Asian. Behind the scenes the US had sought to dissuade countries from joining the AIIB. It would appear that the UK gave the US little warning of its decision, much to the anger of the latter. And the British decision led to over thirty countries, including the other leading European nations, deciding to sign up as members.

So why did Britain decide to join – highly unlikely as that seemed at the time? The deterioration in the relationship between the UK and China after the former’s decision to publicly meet the Dalai Lama and China’s freezing of bilateral relations in response, led to some profound soul-searching by the British. It not only came to regret the decision to meet the Dalai Lama, though this was never admitted, but far more importantly it led to a profound rethink of the significance of China’s rise and what it meant for Britain: if China would soon become the world’s largest economy then the UK had to seek to engage with it in a totally different and much closer way. Instead of aping the United States, as had almost invariably been the case for decades previous, the UK needed to develop its own independent relationship with China.

What has driven this profound rethink on the part of the British is a new and significantly different perception of the national interest. Like other European countries the UK is seriously indebted and therefore short of capital. The new engagement with China offers the prospect of an injection of Chinese investment in its infrastructure, which otherwise it would find very difficult to afford, and the opportunity for City of London to become one of the most important offshore hubs for the renminbi. The latter is perhaps uppermost in the British mind as London vies with New York as the world’s premier financial centre. In the longer run, it would be impossible for London to maintain its position as a great financial centre unless it becomes one of the great centres for the renminbi.

The British pivot to China is an object lesson in how China’s rise transforms the way in which countries see China and the priority they give to their relationship with it. As China rises, its gravitational pull becomes ever greater and the geo-political geometry of the world changes. The British pivot is but one of many examples. But it has a special meaning. It demonstrates how the West itself is now being pulled in different directions by China’s rise. The United States has becoming increasingly concerned by China as a threat to its position as the pre-eminent global power, with the consequence that the China-US relationship is becoming increasingly strained. Countries like the UK, France and Germany do not have this kind of interest, nor do they have the same stake as the US in seeking to defend the latter’s position as the global hegemon. That is why the UK’s response to China’s rise is markedly distinct from that of the United States. The UK has little self-interest in containing China and great self-interest in engaging with China.

The warming of the relationship between China and the UK should be seen in this context. Arguably Britain’s pivot to China – along with its decision in 1972 to join Europe – is the most important shift in British foreign policy since 1945. The difference between the two is that while the US encouraged the UK to join Europe, it is very unhappy about Britain’s pivot to China. It would be quite wrong to talk about a breach in the UK-US relationship. At most, a very small chink of light has opened between them because, to American disquiet, Britain has opted to pursue a much closer and rather different relationship with China. Given the UK’s history as the premier imperial power prior to the United States, and the subsequent closeness of its relationship with the US, this is an event of great historical and geo-political significance.

This article was originally published on this website in December 2015. An amended version has now been published in The Global Times.

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When China Rules the World is the first book to fully conceive of and explain the upheaval that China’s ascendance will cause and the realigned global power structure it will create.

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