Insight: The row over China’s embassy in London is straining relations with Britain

LONDON (Reuters) – The dispute was sparked by a domestic dispute over China’s plans to build a new embassy next to the Tower of London – pitting the world’s second-largest superpower against an inner-city neighborhood that blocked the project.

Just over seven months later, it is escalating into a diplomatic standoff, officials from both countries told Reuters, undermining efforts to repair badly damaged relations.

Two Chinese and three British officials told Reuters that the Chinese government has expressed frustration over the lack of planning permission for its embassy in official-level meetings.

This prompted officials in Britain, which is trying to forge deeper economic ties after Britain leaves the European Union, to fear that it would halt their own plans to rebuild its embassy in Beijing. Space is already running out at the current cramped site. One visitor said a squash court had to be converted into an office.

Officials say the row at the embassy has undermined attempts by British Prime Minister Rishi Sunak to forge a new approach to China, one that would balance London’s national security interests with better cooperation on trade and climate change.

It is a far cry from 2015 when former prime minister David Cameron and President Xi Jinping exchanged beer and fish and chips in an English village pub and declared a “golden era” for relations between London and Beijing.

China first announced plans in 2018 to build a 700,000-square-foot embassy on the former site of the British Royal Mint — the official factory for Britain’s coins — roughly its largest mission in Europe. twice Washington’s size.

It bought the land – about four miles from its current base in central London – for around £255m ($311m). But while unelected planning officers approved the proposal, elected members of local councils rejected it, rejecting it for security reasons and the impact on the population.

Chinese officials told Reuters they suspect the British government planned to block the embassy plans and orchestrated domestic opposition.

They have expressed displeasure at not being able to move to the new site in meetings with their British counterparts in recent months, according to four people involved or familiar with the talks. Reuters could not say how many meetings the issue was raised.

“It’s definitely political,” said a Chinese official.

British officials – caught between Beijing’s demands, politicians and some boisterous locals – have dismissed those accusations, saying councils make their own decisions.

The stakes are high – China has been the second largest source of foreign direct investment in London over the past decade, after the US.

“It’s so chaotic and a headache we could do without,” a British official said. The UK’s housing and foreign ministries declined to comment.

LOOMING DEADLINE

The British government was careful to distance itself from the whole planning process. But she will likely need to pick a side soon.

An August 11 deadline looms for Beijing to appeal the planning refusal.

The first step in any such appeal requires the submission of an application to an independent planning inspection department auditor.

If the Planning Inspectorate finds the application controversial or nationally important, it will go to UK Housing Secretary Michael Gove, who can also ‘call’ the project if he wants to make the final decision himself.

That’s when it gets more difficult.

Concerns about suppressing freedoms in Hong Kong, reports of human rights abuses against Uyghurs in Xinjiang, and suspicions about China trying to hack security systems have all intervened. Beijing denied all accusations.

There have been no face-to-face leaders-level meetings since 2018. The scheduled talks between Sunak and Xi on the sidelines of a global summit in November last year were abruptly cancelled. The last phone call between the leaders of the two countries came more than a year ago.

Like other European countries, the Sunak government has adopted a policy of seeking to neutralize security threats posed by China – notably by banning certain Chinese technologies – while seeking to engage in areas such as trade, investment and climate change.

Iain Duncan Smith, the former leader of Sunak’s ruling Conservative Party, wants to go further, saying the decision to withhold the embassy will show how Britain prioritizes national security in its relationship with China.

He told Reuters the government’s approach to China was “very soft. We need to be able to say we’re not ready to stick around.”

out of our hands

In a statement to Reuters last month, China’s foreign ministry urged the British government to fulfill its “international obligations” to help it build a new embassy and said China wanted to find a solution “on the basis of reciprocity and mutual benefit”.

British officials, speaking on condition of anonymity, said they feared that London’s plan to rebuild its embassy in Beijing could be affected.

One of the officials said a request had been made but permission had not yet been granted. It was not clear when the request was submitted.

Another official said they view planning applications as two separate processes.

The officials spoke on condition of anonymity, given the sensitivity of the issue.

Then there are the residents of Tower Hamlets to consider.

During the original planning process, some residents of the region, which has a large Muslim population, raised what they said was China’s persecution of the Uighurs.

At one point, council members wanted to hammer their point by renaming local streets or new buildings Uyghur Court and Tiananmen Square—plans that were never adopted.

Residents say they are also concerned about more local security issues.

About 300 of them live in apartments belonging to the site. China became the free owner of this property when it bought the land and is now, in effect, its owner.

Dave Lake, president of the Royal Court Mint Residents’ Association representing homeowners, said local opposition could decrease if China promises never to enter flats or takes measures such as banning flags.

But his biggest worry now is that Britain and China will force a deal, ignoring the local population.

“I’m desperate,” he said. “It’s completely out of our hands and it doesn’t look good at all.” “Our security issues are so important and on such a scale that I feel they can be overlooked.”

Additional reporting by Martin Quinn Pollard in Beijing. Editing by Kate Holton and Andrew Heavens

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