The salesman and the spies
There was a strange juxtaposition of events on Monday. That was the day Britain launched the fourth wing of its armed services: a ‘cyber-command’ designed to protect our country against online attacks, most of which are carried out by China. It was also the day when David Cameron welcomed Wen Jiabao, the Premier of China, to 10 Downing Street for smiles and handshakes and multi-millionpound deals. Something very odd is happening to Sino-British relations. Britain is simultaneously acquiring a new enemy and a new ally. If we are lucky, the proceeds from trade with the ally may exceed the £650 million cost of online combat with the enemy.
China’s problem is simple. Its economic growth is slowing (this, one supposes, is what happens when your workforce enters its adolescence). It specialises in making things, not designing things. It is attempting to fix this deficiency through a massive programme of industrial espionage. According to many British companies, if you start negotiations with a Chinese partner on a Monday, you can expect your computers to be under attack by the Thursday.
China has also started targeting British government departments. Our security services believe that it broke into the Foreign
Office in January, and makes frequent attacks on the Treasury. The nature of cyber-espionage, of course, means that nothing can be proved: the information may go back to Beijing, but the nefarious software that extracts it can be run from anywhere in the world. One sophisticated attack was traced to an internet server in Brighton.
Why do we put up with this? Premier Wen gave us a clue this week. He said that China was ready to ‘invest’ in European debt. Our government needs to borrow £1 of every £5 it spends; it probably does not feel that it can afford to be rude to potential creditors, whatever their character. And then we are relying on exports as the basis for our economic recovery. Is this any time to alienate the world’s fastest-growing major economy?
But Cameron should not let China ride roughshod over our diplomatic interests simply because it is economically so powerful. Finding countries to buy our debt is important, but it is not as vital as our national security. British companies, moreover, are capable of making their own deals with China. Trade between our peoples is a very different thing from deals between our politicians. RollsRoyce has increased car production on the back of Chinese demand, but this is not the result of some special order signed by Premier
Wen; rather, it reflects the number of Beijing businessmen who can now spare six-and-ahalf million yuan for a Phantom. Cameron started his time in office with the wrongheaded idea that he would, when abroad, act as a particularly powerful trade ambassador. This demeans his position and his country. A Prime Minister is paid to represent Britain’s diplomatic interests. Our companies are big enough to look after themselves.
When Richard Nixon went to China in 1972, Americans were delighted: their president had opened up a massive economy for their exporters. Few guessed how quickly China’s own exports would grow; and hardly anyone could then have imagined the sort of espionage that now helps keep them growing. If David Cameron is to properly manage our relationship with this emerging superpower, he must not think only in terms of how much cash he can wheedle from it. A cooler assessment might start with the question of just how deep a threat China’s cyber-espionage is to our national interest. Has, for example, the decision to have China’s Huawei Technologies upgrade a mobile phone network in Britain multiplied its potential for hacking? This is a strange new world, and so far it is the Chinese who appear to understand it best. The Prime Minister’s duty is to catch up.
A welcome examination Students have had ample cause for grief under this government, but this week they may feel a smidgen of gratitude. The measures contained in David Willetts’s new White Paper go some way towards fixing the perverse marketplace for university places. With universities of every quality — good, bad and in between — rushing to charge the maximum £9,000 a year in fees, the move to force them to publish more information about the quality of their courses will reveal which are offering value in return.
Mr Willetts’s plans should unravel one of the major iniquities of the New Labour years: the mis-selling of university degrees. The last government vigorously defended its tuitionfee policy by claiming that the average graduate earned £400,000 more over their lifetime than a non-graduate; a figure later revised downwards to just over £100,000. But even this failed to capture the experience of those graduates operating outside the median. A report by PriceWaterhouseCoopers discovered that an arts student could expect a ‘graduate premium’ of only £35,000.
There are many reasons to study, but economic gain is an ever less significant one. As the government shines a light on the higher education system, students might give thanks — but they might also shudder at the sight.
the spectator | 2 July 2011 | www.spectator.co.uk