In an increasingly dangerous and unpredictable world, ‘securonomics’ was the buzzword permeating from the Labour Party’s Conference 2023 in Liverpool. Entrusted with the responsibility to protect Britain, what does ‘securonomics’ really mean?

Through ‘securonomics’ the Labour Party is proposing a foreign policy that begins…at home. The fact that the most notable foreign policy announcement of the recent Labour Conference came during the Shadow Chancellor’s speech, and not the Shadow Foreign Secretary’s speech is telling in and of itself. In a world of interconnected economies and globalized trade, national security is economic security.

Shadow Chancellor Rachel Reeves announced during her speech at Labour Conference that “globalization is dead” and a Labour government would instead pursue a policy of ‘securonomics’. Below, we dissect what this really means and if globalization truly is dead.

What does ‘securonomics’ mean?

Labour’s ‘securonomics’ can be understood as the fundamental belief that economic security must precede overtures abroad. This means securing supply chains and building production capacity in areas where the UK is currently over-reliant on other nations, particularly unfriendly ones. “We are living in an age of insecurity”, argued Reeves, in reference to the geopolitical events of Brexit, the COVID-19 pandemic, and war in Europe.

A Britain seeking to play a leading international role must first strengthen its capacity to be self-reliant, “in a world where our adversaries may turn off the taps to energy supply, or remove access to critical technology (…), Britain needs to be more resilient.”

‘Securonomics’ is about Britain ‘standing tall’ and ‘reaching out’

Economic resilience, as outlined above, embodies a figurative reference made repeatedly to Britain ‘standing up’. While Shadow Foreign Secretary David Lammy’s speech at Labour Conference 2023 was symbolic of a Britain, having stood tall, that would reach out to allies and renew its partnerships, “a strong Britain is not a lonely Britain but a United Kingdom whose alliances give us strength.”

Lammy referenced the Labour governments of the past and their role in the formation of key international security alliances, such as the North Atlantic Treaty Organization (NATO) and the United Nations (UN), suggesting a Labour government would not deviate much from Britain’s longstanding and leading role in the international community.

Together, ‘standing tall’ and ‘reaching out’, not only underpin Labour’s ‘securonomics’ approach to governance but also embody the broader Labour campaign to re-establish public trust by presenting itself as a party of fiscal competence and sensible politics. Protecting the economy demonstrates fiscal competence whilst pledging to strengthen Britain’s existing commitments to its alliances such as NATO is intended to forge a clear distinction between the current Labour Party and its predecessor led by Jeremy Corbyn, who was a vocal critic of NATO.

How would Labour implement ‘securonomics’?

‘Securonomics’ would entail investment in UK industry to increase self-reliance when it comes to critical infrastructure. It would require onshoring jobs in parts of industrial supply chains formerly sent abroad returning to the UK. This in turn demands the upskilling of the UK populace to complete such roles. Labour calls this a bottom-up approach to achieving economic growth and national security simultaneously, whilst advancing the general population’s interests.

‘Why ‘securonomics’?

‘Securonomics’ is symbolic of the wider dissolution of boundaries between domestic and foreign policy, and industrial policy and national security, which we are seeing across Western governments in response to the increasingly unpredictable and dangerous world taking hold all around us.

The United States government’s £350bn Inflation Reduction Act (IRA) leverages private sector investment into domestic manufacturing and critical infrastructure capacity through government subsidies. In doing so, it hoped to accelerate industry shifts toward emerging technologies and securitize its economy.

Australia, Germany, and the EU have all followed suit with similar initiatives. The UK Labour Party’s ‘securonomics’ approach is merely a variation on a common theme emerging in the West – secure at home to stand tall whilst reaching out and engaging abroad with like-minded nations.

Globalisation isn’t dead, only now it has a protectionist streak.

As paranoia grips the West, Chinese and Russian spies are said to threaten us all and bloc politics are emerging again. Let us draw on Arthur Miller’s The Crucible for lessons on how to tread the line between naivety and hysteria in society.

Arthur Miller’s The Crucible is a fictional recasting of the very real tale of the Salem witch trials in the United States between 1692 and 1693. During this time, hundreds were accused of witchcraft leading to hangings and executions.

The basic premise of the story is a group of girls are caught attempting to conjure up a spell. They deny the claims and lie to protect themselves. Their lies take on a life of their own and culminate in the hysteria surrounding the spread of witchcraft in Salem.

One of the more opportunistic girls seizes the subsequent hysteria to accuse the wife of a man she is in love of with and rejected by, witchcraft in order to rid of her. Sensing the shifting public opinion and a dawning realization his wife may be executed, the husband falsely ‘confesses’ to the crime of witchcraft to save his wife but to no avail. Both are hanged, whilst the girls originally accused flee.

The story is a lesson in the danger of hysteria and how information can take on a life of its own once in the public domain. Criminality is weaponized and rather than ridding society of its ills, is manipulated by different actors with differing intentions seeking to further their own agenda. This blurs the lines between fact and fiction, and what is just and unjust. Unintended consequences emerge and innocent people are punished.

We can draw parallels between the hysteria present in The Crucible and in society today, as we explore below.

Drawing parallels between The Crucible and society today

The ongoing war between Russia and Ukraine, and the trade war between the United States and China have seen hysteria grip Western societies. Anything and everything Russian or Chinese is to be feared. The US say we must ‘de-couple’. The UK and EU say we must ‘de-risk’. What either of these things mean has been left, by design, ambiguous. This means politicians can be flexible in both interpretation and application in response to the latest international developments.

However, a consequence of such ambiguity is a tendency to conflate hysteria and national security. Spies are a useful recent example of this. In the UK, the case of the parliamentary researcher accused of being a Chinese government informant and more recently the 5 Bulgarian nationals appearing in court on charges of spying for Russia has led some to argue that Chinese and Russian spies are now a threat to us all.

The latest manifestation of such hysteria recently unfolded in Europe where Alibaba, the Chinese technological giant, stands accused of espionage in Belgium via its spin-off logistics firm Cainiao.

As I have argued previously, governments spying on one another, like it or not,  is nothing new. The decision to publicize the cases and to prosecute the accused is.

Whilst intelligence and security agencies justify such an approach for its success in disrupting foreign operations to gather sensitive information, an unintended effect is to create hysteria amongst wider society.

Innocent people suffer at the hands of hysteria

Whilst such thinking begins in the upper echelons of society, government, and institutions, it gradually trickles down into the cracks of society sowing seeds of division. We have been here before.

Western citizens are allegedly being apprehended at random in China and Russia on dubious espionage cases in retaliation to the prosecution of Chinese and Russian spies in the likes of the UK, Belgium, and Germany.

In the UK, Russian people are conflated with their government and face calls to be removed from the country by officials as high ranking as the Minister for Security.

Words matter, we should use them carefully. Countries spy. It can’t be the case that some spying is okay and rational because of some sense of moral superiority. While other spying is wrong because it is a result of innate evil.

Security agencies and media institutions tread a careful line when it comes to national security – balancing naivety and hysteria is no small order – but is a task society demands.

“Britain is not a rival, it is not a competitor, it is not an enemy, it is not an adversary.” You would be forgiven for concluding from Chinese government spokesperson Vitor Gao’s remarks that China views the UK as irrelevant. But just how comparable are the two countries?

The Sino-UK relationship is currently under the media spotlight thanks to allegations of a Chinese government spy in UK parliament. This led political commentator Andrew Marr to invite Chinese government spokesperson Vitor Gao onto LBC to discuss the Chinese view of the Sino-UK relationship. When pressed on China’s opinion of the UK viewing it as a competitor, Gao’s response was a damning assessment of UK competition.

“What do China and Britain compete with? China is the largest manufacturer of automobiles, competing with Britain? No. China is the largest exporter of EV [electrical vehicle] cars…. Is Britain a competitor? No. China will be the biggest and most important producer and R&D in terms of semi-conductor in no time. Does that mean China competes with Britain? No. China will be the leading nation in AI revolution. Is Britain a competitor? No.”

Chinese media spokesperson, Vitor Gao speaks to LBC’s Andrew Marr, 2023

Gao concluded by suggesting the UK government avoid overestimating its global impact. Below, we will explore just how comparable the UK and China truly are, and whether Gao’s remarks downplayed the importance of a global Britain or were a reality check for a declining, once great power in the world.

The sheer scale of China dwarfs the UK

First, to get a sense of the vast difference in scale of China and the UK, let us take a look at the geography.

According to the latest ONS data, the UK population stands at just over 67 million people. When compared to China’s 1.4 billion population, the UK population is less than 5% that of China. China’s population alone accounts for 18% of the world’s population. The UK accounts for just 0.9%.

China is the fourth largest country in the world with a land mass of 9.6 million km². China’s smallest province, Hainan, is three times larger than the largest county in the UK, Yorkshire.

In terms of infrastructure, particularly poignant following the government’s latest update that its attempt at high-speed rail will no longer connect its second and third largest cities, China has built a complete high-speed rail network, longer than the rest of the world’s combined, from scratch, in just 20 years.

The absolute scale of China dwarfs a tiny island nation like the UK. This is important to keep in mind when considering economic comparisons.

The Chinese economy is exceedingly big compared to the UK economy, but the UK remains richer

China is the largest economy in the world. The UK is the eleventh largest economy in the world. The World Bank estimates UK GDP at purchasing power parity (PPP) hovers around $3 trillion. This figure is only a tenth that of China’s whopping $30 trillion GDP. This is unsurprising, given the vast differences in both population and size of the two countries outlined above.

Only when understood in terms of GDP per head of the population (per capita) can the two countries be compared. Using this figure, the UK’s GDP per capita (PPP) figure of $54,603 more than doubles that of China’s GDP per capita figure of $21,487. The UK is therefore richer than China on a person-to-person basis.

Having sought to understand the big picture of a UK-China comparison, let us now delve deeper into Gao’s comments about UK-China competition.

UK-China trade has little overlap

Gao was right to conclude the UK and China are not competitors when it comes to the technologies of tomorrow.

The two countries have little trade overlap thanks to differing economic specializations. The UK is the second largest exporter of services in the world whereas China is a manufacturing-driven economy.

UK service specialization means market leadership in sectors such as life sciences, education, finance, and insurance. China specializes more in electrical goods, textiles and machinery.

But what for the industries outlined by Gao in his critique of UK competition: electric vehicles (EV), semi-conductors, and artificial intelligence (AI)?

These industries represent the key technologies of the future. Which of the UK and China is innovating more in these industries? China.

China leads the UK in future technologies

To understand EV, we can look at EV sales as a proportion of total vehicle sales and the accompanying EV charging infrastructure which will enable the transition.

China’s EV sales penetration rate (the percentage of total vehicle sales) currently stands at 33% for the year 2022. Whereas the UK EV sales penetration rate hovers around 23%. Taken alone, these figures suggest the two countries aren’t too far apart on EV progress.

However, when understood together with EV infrastructure, the UK lags far behind China. The UK has an EV to charging point ratio of 17:1. That is 17 vehicles to every 1 charging point. That compares to China’s much lower rate of 2.5:1.

China powers the electronics of the modern world, the UK doesn’t

Now, let us look at semi-conductors. Semi-conductors come in many forms but at the most basic level are best understood as the devices that allow electrical currents to be manipulated and thereby power many of the electronic devices we use today.

You will have likely read the recent media storm surrounding Huawei’s new Mate 60 Pro. The reason for the intense media coverage is the device’s inclusion of advanced semi-conductors industry leaders thought China was not yet capable of developing.

The UK is not a competitor in this regard, with industry experts admitting the UK isn’t going to be developing ‘the chips powering the latest smartphones’ instead fulfilling less advanced, more specialized market demands.

AI leadership is a global endeavour

Finally, on AI, China’s recent draft AI regulations demonstrate its leadership in the sector and in future technologies more broadly.

Whilst the UK has its own upcoming global AI summit demonstrating some degree of regulatory leadership, China is invited. This suggests the government agrees China is not a competitor in AI but a vital partner. Indeed, a McKinsey report back in 2019 concluded that while the UK is an industry leader within Europe, it doesn’t come close to China.

The UK isn’t a competitor to China, nor is it a rival. The UK must rethink its approach to China going forward if it wishes to be taken seriously on the international stage. An active foreign policy focused on co-operation not conflict is key if the UK is to inject its stagnating economy with some much needed vitality.

BRICS expansion comes as a counterweight to Western-dominated political and economic institutions, and reliance on the U.S. dollar. This constitutes a form of grievance-based politics.

BRICS – the name for the grouping of emerging economies: Brazil, Russia, India, China, and South Africa – will soon expand.

Following its 15^th annual summit in Johannesburg, South Africa. A formal invitation was extended to 6 countries: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE).

BRICS provides a vehicle for countries out-of-favor with Washington, facing economic exclusion or sanction regimes, to co-operate thereby mitigating the effects of exclusionary measures.

BRICS countries now account for 75% of the world’s manganese, 50% of the globe’s graphite, 42% of the world’s oil production, 28% of the world’s nickel, and 10% of copper.

This poses a choice for Washington: re-engage or push nations further toward one-another, and further away from its sphere of influence.

Below, we delve-deeper the significance of BRICS and its expansion.

BRICS is not anti-US, it is anti-dependency

Many observers have labelled BRICS as a coalition of anti-U.S. countries, but this is an oversimplification.

BRICS expansion means the group now includes Russia, Iran, and China. The former are openly antagonistic to the U.S. in the face of economic sanctions. The latter, the U.S. perceives as a direct threat to its global leadership.

Whilst Russia and Iran may wish to steer the group in this direction, for most of BRICS, including China, leveraging a collective voice proceeds enhanced co-operation with the U.S. and its allies.

BRICS is not anti-US, it is anti-dependency. What unites members is contempt for western-led financial institutions, and reliance on the U.S. dollar.

Weaponization of the U.S. dollar has accelerated support for BRICS

Last year, the U.S. and its allies took the decision to use their economic might to punish Russia following its invasion of Ukraine, but the move has alarmed leaders around the world.

‘We call for reform of the International system,
and a greater role for emerging markets and developing countries, in leadership positions in its institutions’

XV BRICS Summit, Johannesburg II Declaration, 2023

Freezing nearly half ($300bn) of Russia’s foreign currency reserves and removing Russian banks from SWIFT, a financial service facilitating international payments, is a move akin to a nuclear bomb in the financial world, symbolic of the weaponization of currency.

Policy development of an alternative international payment system of localized currency to de-risk countries against U.S. weaponization of its dollar is underway. This process is often referred to as de-dollarization and occurs in tandem with other BRICS development initiatives such as the New Development Bank.

These initiatives aim to support the development of emerging economies and provide competition to established institutions such as the International Monetary Fund (IMF) and World Bank, which stand accused of cripplingly high interest rates which lock emerging economies into debt.

This narrative is convincing for many countries, but others view it as a convenient truth Chinese leadership uses to entice emerging economies to be pawns in its own grand strategy.

BRICS expansion aligns with Chinese foreign policy goals…and doesn’t align with the West’s

For cynics, the alignment of BRICS expansion with Chinese foreign policy is a convenient truth. But for the Chinese, and an increasing number of others, it is more symbolic of an inconvenient truth for the West – its eroding grip on natural resources and power.

With the exception of Argentina, the new BRICS members are MENA countries (Middle East and North Africa). Their admission is symbolic of the regions shift from the American sphere of influence to the Chinese – the strongest advocates for BRICS expansion.

U.S withdrawal from the Middle East left a power vacuum China has been keen to fill. China’s role in brokering the détente between Iran and Saudi Arabia, whose conflict had destabilized several countries in the Middle East – including Iraq, Syria, Lebanon, Yemen, and Bahrain already warranted international significance but institutionalizing the relationship represents a major next step toward a more secure long-term relationship, and enhanced leadership prospects for China in the region.

Similarly, Egypt and Ethiopia bridge Africa and the Middle East, conflict concerning rights to the Nile River similarly plagued the relationship. Their admissions and prospects for a more stable relationship compliments Chinese geopolitical ambitions by connecting its foreign policy initiatives on both continents. Yet alignment with Chinese foreign policy shouldn’t detract from the facts on the ground.

The Facts on the Ground

China’s increasing presence in Africa provides economic options and leverage for African nations concerning resource extraction. Localized currency offers a degree of financial flexibility when it comes to debt servicing emerging economies, and a growing presence in the Middle East and South America diversifies control over critical minerals.

This amounts to considerable negotiating power for a group of countries united by a shared history of unfavorable relationships with the West.

Yet for all its potential, BRICS has achieved little for an organization that is 13 years old. Tangible outcomes remain to be seen, but it is clear the voice of emerging economies is growing louder. What they wish to do with it, only time will tell.