UK's newly-elected government is also likely to support greater role for Beijing in global institutions

The British election failed to produce a decisive result. With no party able to win an overall majority in the House of Commons, Britain has its first "hung parliament" since 1974.

At the time of writing, the three main political parties are jockeying and negotiating between themselves about the formation of a new government. At a moment when the UK faces a number of economic challenges, the financial markets have reacted negatively to the uncertainty surrounding Britain's immediate political future, with the value of the UK stock market falling 2.6 percent last Friday and the British pound falling to a year low against the dollar.

The most likely scenario is that the Conservative Party will form the next government with the support - in formal coalition or otherwise - of Britain's third biggest party, the Liberal Democrats. Having won the most parliamentary seats but failing to secure a majority for his party, Conservative leader David Cameron publicly reached out to the Liberals on Friday with what he described as "big, open and comprehensive offer".

Outlining areas of difference on immigration, Europe and defense, Cameron nevertheless claimed that there was enough "common ground" on tax, education and environmental policy for the parties to work together in the national interest.

It is unclear how the Liberal Democrats will react to his offer. Many "progressives" in the party will balk at the idea of an alliance with a Conservative government, particularly if it includes no promise on electoral reform. Should Cameron and Liberal leader Nick Clegg not be able to strike a deal, the Labor Party's Gordon Brown - who will remain as Prime Minister until a solution is found - has made clear he is willing to offer generous concessions to the Liberals if they will join with Labor to form the next government.

Whatever the result of these negotiations, the next government will have no choice but to work quickly to secure Britain's economic recovery and address a huge budget deficit. All parties agree that deep cuts in public spending will be required to reduce a deficit that currently stands at 12 percent of GDP, and projected to become the highest in the European Union (EU) over the coming year. The election campaign reflected this by focusing on economic issues almost to the exclusion of anything else.

It will have significant implications for British foreign policy. All parties have committed to holding a Strategic Defense Review that will reassess foreign policy priorities and likely outline spending cuts in the diplomatic service and military. There will probably be a fierce debate over whether Britain should renew its costly nuclear deterrent.

This election is therefore likely to bring to an end an era when, under the "liberal interventionist" foreign policy of ex-Prime Minister Tony Blair, Britain engaged in a number of overseas military interventions, often in support of the United States. Any future government is likely to be less willing, or capable, of supporting similar expeditions.

Although it can be anticipated that the UK would maintain its commitment in Afghanistan, Britain can otherwise be expected to assume a reduced role in the world.

Does the election have more specific foreign policy implications for UK-China relations? There may be some concern in Beijing about the prospect of a Conservative-Liberal Democrat government. Cameron controversially commented in the first leaders' television debate that the UK needed to maintain an independent nuclear deterrent because "we don't know what is going to happen with Iran, [and] we can't be certain of the future in China".

The Liberal Democrats are also the most likely to be reflexively sympathetic to Tibetan or human rights issues in Parliament.

Such concerns, however, would be exaggerated. I understand that in the debate Cameron meant to say the Democratic People's Republic of Korea, not China, and that apologies have been sent through appropriate channels. The Conservative Party's manifesto commits them to the consensus position of deepening engagement with Beijing and supporting an expansion of China's role in global institutions.

It is highly unlikely that the Liberals will be granted any control over foreign policy in any coalition deal.

Cameron visited China in 2007, a rare choice for an opposition leader and presumably designed to demonstrate that he grasps China's global importance. His likely choice as foreign minister, William Hague, is well-known in Beijing and there are a number of senior "China hands" within the Conservative ranks from the days of the Hong Kong handover negotiations.

Beijing may even welcome a change in government as an opportunity to move beyond the tensions that emerged following the contentious execution in China of British citizen Akmal Shaikh on accusations of drug smuggling.

The truth is that broader strategic questions that relate to UK-China relations can now only be effectively handled at the European-level. The hostility of the Conservative Party towards greater European integration is therefore not very helpful. It will likely undermine moves to bolster the EU's foreign policy capabilities so it can better represent itself to the rest of the world. It could also detract from much-needed efforts to develop a more unified and coherent China policy amongst member states.

Beijing may view this differently. China has traditionally supported greater European integration as a means of facilitating market access and offering a potential counter-balance to the US. But, at a time when the debate about China is turning increasingly negative in Europe, Beijing may view a Euro-skeptic Conservative administration as a useful ally.

The author is a visiting research fellow at Peking University's Center for International and Strategic Studies. He used to work for a MP in the UK Parliament.

(China Daily 05/10/2010 page8)