Somewhere in darkest Cheltenham, confusion must surely reign. You might have thought the people in the GCHQ “Doughnut” would be used to handling mixed signals, but this is a tricky week for the electronic spies.

What do they tell the American friends about what the new Chinese friends are saying? Do you share titbits about the Americans with the honoured guests from Beijing? At what point do you remember that everyone is spying on everyone, so what the hell?

A tricky business, international diplomacy. It is never trickier than for a subordinate power trying to serve two masters. David Cameron and George Osborne are not quite calling the welcome accorded to China’s President Xi Jinping the mark of a special relationship, but that’s only because the phrase is taken.

The poor man will have to settle for “golden era”. That and a 103-gun salute, a ride in a state coach, the homage – sorry, “respectful attention” - of Parliament, and the touring company of the House of Windsor. President Xi understands the British-American compact perfectly well. A state visit with all the trimmings tells him that, in these matters, Mr Cameron’s government is not monogamous.

Washington will fume, but there is not a lot Washington can do. Such is the basis for the new British pragmatism. In a world dominated by a pair of superpowers, the Tory administration is trying something it considers clever: friendship, of the fawning sort, with both, even while they are (metaphorically) at each other’s throats.

Among the foreign policy mob in the London think tanks, this is being presented as a kind of enlightened self-interest. The United States is in decline, to hear it told, while China’s ascent is inexorable. China has cash while America, like Britain, is strapped. Holding the Chinese at arm’s length is pointless and counter-productive. An embrace is better for business.

You can, in language Mr Osborne might understand, put a price on these things. What do you get for world-class grovelling? On the one hand, you win the favour of a state that still executes more of its people than all the other countries on earth combined. The most recent semi-official figure, for 2013, was 2,400. Since this was down from an annual average of around 5,000, it qualifies as “an improving human rights record”.

On the other hand, if you please Beijing you get the goodwill of a country so friendly it will dump steel on your market and cost your indigenous industry 1,170 jobs in Scunthorpe and Lanarkshire. You will win “£30 billion of trade and business deals” of the kind that could see the Chinese build “British” nuclear plants for a guaranteed profit at an astounding cost to the consumer.

Free speech exists in China as a kind of parody, but there have been plenty of speeches here, freely given by Mr Osborne and others, on what the Chinese can do for Britain’s infrastructure. It is, in essence, for sale, from docks to rail projects to energy, at what are sometimes called unbeatable prices. Meanwhile, the City of London is to become a branch office of the People’s Bank of China, handling as many renminbi transactions as dealers can manage.

Mr Cameron and Mr Osborne are not even slightly reticent about all of this. The decision to join the Chinese-backed Asian Infrastructure Investment Bank earlier this year, in the teeth of American opposition, was a sign of a burgeoning Tory faith in a one-party state (not Scotland) with a fondness for monopolistic nationalised industries. That the Chinese have no truck with Mr Cameron’s “British values” is a mere cultural difference, it seems, not a threat to our security.

After all, if those disciples of the free market at Ineos UK could sell off a 50 per cent stake to China’s petro-chemical arm, with it a piece of Grangemouth and plans to frack Scotland, where’s the harm in Mr Osborne following suit? He could canvass 1,170 workers in Scunthorpe and Lanarkshire for an opinion, but such people are unlikely to grasp the big picture. It says that what the Chinese want, the Chinese get.

House of Fraser; Thames Water; Pizza Express; a bit of BP, a $3bn piece of Barclays Bank; and property all over London and beyond: these deals have already been done. Mr Osborne aims to offer UK plc on the same attractive terms. There is nothing, it seems, for which a deal cannot be done. Like the boss who comes to dinner in some ancient sit-com, President Xi is to be given slap-up meals and shown a good time at any cost.

Those last words are more than a figure of speech. The Chancellor would like China to supply the funding that Britain, for now, cannot provide. In consequence, Mr Osborne takes a narrow view of what might constitute the national interest or a strategic industry. For one thing, Chinese cyber-spying will sit at the heart of the British economy. Robin Cook’s old hope for an ethical foreign policy will pass finally into the realms of satire.

There is irony in the fact that in this, of all things, the UK has decided finally to exercise a bit of independence from the US. Presumably the calculation is that Washington is not so flush with allies that it can afford to rebuke its Brits. No doubt Whitehall is already claiming that “influence” with Beijing will be in everyone’s interest. The fact that the US does not regard rivalry with the Chinese in those terms has probably been ignored.

But let’s accept that China truly is the looming economic giant of the 21st century. Its GDP growth, even granting dodgy official figures, will probably see it outstrip the US within a generation. How should the UK respond? By choking down that fine Tory rhetoric on democracy, values, and individual liberty? How would the Saudis, or any other rich but distasteful regime, respond to such behaviour?

Much as the Chinese are responding, no doubt. The state visit contains a good deal of symbolism. Its most significant meaning is this: show them firmness and money and the British will fall into line. The old hypocrisy will always prevail. Teach them how to grovel, call it “a new understanding”, and rich pickings will follow. If you happen to be Chinese, after all, you will remember that this is exactly how the British carried on for centuries.

It would be amusing to hear the GCHQ spooks explain all of this to the American sponsors. Given that, according to the US Department of the Treasury, China holds around $1.25 trillion of American debt (roughly eight per cent of the total), Mr Cameron and Mr Osborne probably think they can weather US complaints. They should remember a detail: Washington regards the $1.25trn as China’s problem.

There’s something else our government could consider as it weighs the costs and benefits of becoming China’s client. How many Chinese will suffer because Her Majesty’s Government has decided to make a brutal regime respectable?