David Cameron’s backing of Beijing-funded development raises questions over business dealings

Beijing: When Chinese president Xi Jinping cut the ribbon on Sri Lanka’s Port City Colombo construction site in September 2014, it was promoted as a future major hub in China’s global infrastructure project, the belt and road initiative.

With a financial centre, beach-front villas and an international yacht marina, the city is aiming to be a rival to Dubai and Singapore. China has already invested $1.4bn in the development, which is due to be completed by 2041.

Some Sri Lankans are worried that the ambitious project may deliver few benefits, have a negative impact on the environment and leave the island nation lumbered with a sprawling white elephant. In the UK, MPs have raised concerns it could one day serve as a Chinese military outpost on the Indo-Pacific.

A concerted PR campaign has done its best to win over investors and critics. The Facebook page of Port City Colombo Limited, whose ultimate owner is the state-owned China Communications Construction Company, carries several photographs featuring one of its most enthusiastic advocates: Britain’s new foreign secretary, Lord Cameron of Chipping Norton.

Cameron is quoted on the website as saying the new metropolis will be a “sea of opportunity” that will help in “building bridges and bringing greater prosperity for all”.

The former premier’s promotion of the Beijing-funded scheme has prompted calls for a full disclosure of his interests to ensure there is no conflict with his new role as Britain’s premier diplomat.

Anneliese Dodds, chair of the Labour party, has called for Cameron to disclose all of his financial interests. “This must include interests he has held and divested himself from prior to re-entering the cabinet,” she wrote to Rishi Sunak on Friday.

Luke de Pulford, executive director of the Inter-Parliamentary Alliance on China, which aims to promote an international response to the challenges posed by China, said: “I think there are very serious questions about how he was vetted for his new position.” He said the new foreign secretary had been pushing for a development “that could effectively become a Chinese military outpost in the Indo-Pacific”.

Cameron toured the Port City Colombo development during a private visit to Sri Lanka in January, meeting Ranil Wickremesinghe, the Sri Lanka president, and Yang Lu, managing director of Port City Colombo. The city is being developed on 665 acres of reclaimed land.

Politico, the politics and policy news organisation, reported last month that Cameron spoke at two events organised to promote Colombo Port City in the United Arab Emirates in September.

The Sri Lanka media has reported that he was to be paid $210,000 to promote the Chinese-backed development at the events. Cameron’s office will not comment on the arrangements, but a source said the former prime minister’s office did not recognise the figures cited in the Sri Lanka press.

Dilum Amunugama, Sri Lanka’s minister of investment promotion, has told the Observer it was the Chinese-backed Port City Colombo project and the government’s Colombo Port City Economic Commission that engaged Lord Cameron.

He said: “It was those two parties. They engaged with him and it was handled by the Port City project itself.” He said the government was keen that Cameron emphasise the role of Sri Lanka in the project so that it wasn’t merely seen as a Chinese venture.

Cameron’s office has not commented on fees, but said the speaking events were arranged via the Washington Speakers Bureau, and the contracting party was KPMG Sri Lanka. KPMG is listed as a consultant for the Port City Colombo project.

There is perhaps a cautionary tale in the Chinese-backed venture Cameron has promoted so keenly. A previous joint China–Sri Lanka venture, the Hambantota Port Development Project, resulted in a Chinese company securing a 99-year lease on the port because of Sri Lanka’s crippling levels of debt. A research report in July claimed that China may establish a naval base at Hambantota in the next two to five years.

During his six years as prime minister, Cameron was an enthusiast for UK-China relations. In September 2012, he welcomed Ren Zhengfei, the boss of Chinese telecommunications firm Huawei, into Downing Street for a fireside chat, lauding the firm’s decision to invest a further £1.3bn in the UK. Three years later, President Xi’s state visit to the UK sealed the “golden era in relations between Britain and China”.

But since Cameron resigned in 2016 following his EU referendum defeat, successive Tory prime ministers have taken a more sceptical approach to China.

In July 2020, Boris Johnson’s government announced that it would ban Huawei from the country’s high-speed 5G mobile communications network. Operators have been ordered to remove the technology by 2027, with BT saying the decision had cost it £500m. MPs have also raised concern about China’s influence in the UK’s nuclear power sector.

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John Strand, chief executive of Strand Consult, a telecommunications research firm, said Cameron’s push for Chinese investment came at a time when there was broader support for more cordial relations.

“Views regarding China have changed a lot in the UK,” he said. “I understand why a lot of people fear that he will have a soft approach in relation to China. [There will be some] strong reactions if he advocates a soft policy.”

Cameron quit as an MP in September 2016, three months after he left Downing Street, and hoped to cash in on UK-China relations. He flew to Beijing in September 2017 to discuss a plan for a new UK-China investment fund with China’s vice premier, Ma Kai.

The following month, Cameron met Philip Hammond, the then chancellor, to seek government support for the fund. By December 2017, the UK government was backing the project after a meeting between Hammond and Ma Kai in Beijing.

“Both sides welcomed the proposal for a bilateral UK-China investment fund with an initial round of $1bn,” said an HM Treasury note. “The fund will be led by a number of institutions in the UK and China, with the involvement of the Rt Hon David Cameron.”

Despite the support of both countries, it appears the fund failed to secure the required backing. A report by the parliamentary intelligence and security committee in July 2023 said Cameron’s role as vice-president of the UK-China investment fund may have been “engineered by the Chinese state to lend credibility to Chinese investment, as well as to the broader China brand”.

Despite the failure to launch the new fund, Cameron successfully forged other links with the Chinese business community. He appeared at UBS’s flagship Greater China Conference in January 2017.

“China is the rising emerging power,” Cameron said at the event. “The best thing to do is invest in each other’s countries.” At another event, in Shanghai in 2018, business leaders were offered the opportunity of dinner with Cameron and a photograph for £12,000.

Since he has left politics, there has been no requirement on Cameron to disclose his business interests. He will now have to register all relevant interests that could influence his parliamentary actions with the House of Lords. He will face particular scrutiny over any financial links to China. But, crucially, he will not have to reveal any payments he received before becoming foreign secretary.

He is also likely to be challenged over the scandal involving financial services company Greensill Capital, which collapsed in March 2021. Cameron’s well-remunerated involvement included lobbying the chancellor and a trip to the Saudi desert with the firm’s boss, Lex Greensill, and Mohammed bin Salman, the Saudi crown prince. Criminal investigations into the affair are ongoing. Cameron is not subject to these investigations.

A spokesperson for Cameron said: “David Cameron spoke at two events in the UAE, organised via Washington Speakers Bureau, in support of Port City Colombo, Sri Lanka. The contracting party for the events was KPMG Sri Lanka and Mr Cameron’s engagement followed a meeting he had with Sri Lanka’s president, Ranil Wickremesinghe, earlier in the year.

“Mr Cameron has not engaged in any way with China or any Chinese company about these speaking events. The Port City project is fully supported by the Sri Lankan government.”