F rom terrorism to floods and back to terrorism again; even in the infancy of his premiership, Gordon Brown has demonstrated a sure touch in coping with crises. His statement to MPs in London last week on bolstering security, following the failed bombings in London and Glasgow, managed to please authoritarians while just about reassuring enough civil libertarians — for the time being.

Ever since the events of 9/11, the UK government has seen radical Islamism, of the home- or foreign-grown varieties, as the greatest threat facing the country. Tony Blair did it his way, joined at the hip with George Bush in their messianic clash of civilisations. Brown has adopted a more cautious approach, signalling a reluctance to take to arms to spread “liberal democracy”.

And yet, as Brown and his new foreign secretary, David Miliband, have found, a new threat is emerging which neither Britain nor other western states have prepared for — the spread of Chinese and Russian power and influence. The theatre of battle is the City of London.

Over the past decade, the UK has allowed its capital city to become the home for many of the world’s most cut-throat and dodgy global financiers. Just as we turned a blind eye to Muslim fundamentalists setting up shop here in the 1990s, in the vain hope that they would treat us gently as they sought to undermine governments elsewhere, so we are doing the same now,

all in the name of global capitalism.

The danger takes two forms, one quasi-respectable, the other not. The first is the takeover of some of the world’s most prestigious, and often London-based companies. China is raising capital for Barclays Bank in its attempted purchase of the Dutch giant, ABN Amro. The deal is entirely new, giving the Chinese and Singaporean governments a stake in Barclays even if the takeover fails. This is just the latest, but perhaps one of the most vivid, manifestations of the Chinese corporate global takeover, from a 10% stake in the US private equity company Blackstone, to the ownership of MG Rover by Nanjing Automotive, to the Chinese stranglehold on Wal-Mart and its enormous reserves of US dollars.

The second involves a somewhat different form of expansion. Unlike China’s more diversified economy, Russia’s wealth is dependent on oil and gas, whose market price has remained high for several years now. While Gazprom ponders a takeover of Centrica in the UK, it pressurised BP and Shell to sell it controlling stakes in two vast projects back in Russia. There are many further examples of sharp corporate practice. During a brief visit to Moscow last week, I was intrigued, but not surprised, to hear the view of a number of prominent Russian figures that the assassination of Litvinenko was justified and Akhmed Zakayev, a Chechen exiled in London, has it coming to him.

Countries that lecture about universal values do not deserve to be listened to if they indulge in rendition flights and torture. Brown and Miliband are right to distance themselves from past policies. They have correctly identified the immediate danger, but — apart from kicking out a few diplomats and trying to talk tough — they have not even begun to think about how to cope with states that have seized on the capitalist

free-for-all with alarming success. — The Guardian