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The Relationship between  Britain and China

The Relationship between  Britain and China

 Speech by Ian Perason, MP, responsible for Trade and Trade Policy, Trade and Investment (UKTI), Economic Policy including Science and Technology, Global Issues (including sustainable development, energy, climate change), Human Rights, North America, South East Asia, East Asia and Oceania. Speech hold at the British Chamber of Commerce in Beijing, China, July 7, 2005. Source: FCO.

Thank you Mr Chairman for inviting me to speak here this evening and thank you to everybody who has come along. It is a real pleasure to meet with members of the British Chamber of Commerce in China.

This is my first ever visit to China, and I hope, the first of many. It has been fascinating over the last few days to see at first hand some of the rapid changes that are taking place here.

You will want to hear from me tonight how the government sees our relationship with China developing. And you'll want to hear how we see the role of business.

Quite simply, China is a major foreign policy priority for Britain. I know that everybody in this room realises both that China presents a huge challenge – politically and economically – for the UK, and at the same time a tremendous opportunity. The government is keen to make sure we are equipped to take advantage of the opportunities that China's growth presents and I know that I'm speaking tonight with people who are already ahead of the curve in this regard.

When I met with the Chinese Ambassador in London last week, he told me that our economic relations were going from strength to strength based upon the foundation of excellent political relations.

So let me say a few words about what we're doing to build political relations ever wider and deeper with China, before talking about the crucial role for trade, investment and wealth creators like the companies gathered here tonight.

  • Bilateral Political Relations

Our starting point is that we've got to engage with China on a broad agenda. The world's political and economic map is changing very quickly. So we have to work to ensure that China's emergence contributes to a more stable, a more effective and a more just international system.

This is why we are closely engaging with China in the UN, at the G8, and through the EU as well as bilaterally. There are some big issues to discuss. From counter proliferation to climate change to development in Africa. As part of our growing relationship we discuss North Korea, UN reform, Iran, and human rights. And we have to keep this going.

As you may know when Premier Wen visited the UK last May he and Tony Blair established a comprehensive strategic partnership between our two countries. The Deputy Prime Minister's Task Force on China has since made recommendations about how to take the relationship forward.

I have seen how these ideas are all bearing fruit: from the UK-China Partners in Science Campaign to the Approved Destination Status Tourism Agreement, and much in between.

We have to keep the momentum up - with good quality ideas, backed up by imaginative execution. This autumn we are looking forward to a bumper crop of exchanges and high-level visits in both directions. This includes the visit of the Prime Minister for the UK-China and the EU-China Summits in Beijing.

The Deputy Prime Minister's Task Force is continuing to contribute ideas on deepening the relationship, and is now expanding its activities to consider what more we can be doing in cultural, health and development co-operation.

And all of this is supported by an enormously wide set of exchanges and dialogues both at the government level, and more importantly in the every day lives of many people of our two countries.

  • Trade & Investment

So what role should business play in the UK-China relationship?

Well first let's not forget that most reliable commentators are forecasting that:

  • China's economy will quadruple in size between 2000 and 2020.

  • Its trade with the outside world is doubling every three years.

  • The Asian market is expected to be 50 percent larger than the European market in a decade.

So, the crucial role for business, I would suggest, is to do more: to trade and invest with China vigorously, imaginatively, and unhesitatingly.

For the benefit of the UK's long-term prosperity we need to be pushing ahead with more enthusiasm and ever more urgency. I know we can do this because the UK is a hugely successful trading nation. You know we can do this because you are doing it already. But we need more pathbreakers like yourselves who are passionate about seizing the opportunities there are to do business with China.

The trade statistics tell a good story - so far. In 2004, we exported over £2.3 billion of goods to China – an increase of 23% over that for the previous year. The UK is the top EU investor in China and Hong Kong combined, with over 4,000 British invested projects in China alone.

But we need to do more. And the government is at your service to help business build on this success.

We are tackling the tough issues too – issues like intellectual property rights and other areas of WTO compliance. We know that it's in all our interests, including Chinese interests, to tackle these difficulties.

We are also continuing to discuss and work with the Chinese on developing rule of law, because we understand that this work is crucial in creating a level playing field for business.

And on Corporate Social Responsibility can I just say that through your responsible business practices here in China, I know that you are setting high standards in labour rights, environmental protection, and combating corruption. Your trade and investment can have an important “halo effect” on Chinese companies you work with.

  • Task Force Business Issues

I have already mentioned the Deputy Prime Minister's China Task Force. Let me return briefly to the work it recommended on trade and investment.

The Task Force identified key sectors where UK expertise matched Chinese demand:

  • Financial services

  • Energy

  • Information and Communications Technology

  • Healthcare

  • Water

New sector working groups have been set up, and existing ones re-energised, to better identify opportunities for UK companies in China.

I don't have time to list all the recent developments, but they include:

  • The successful ICT Week that took place here in China last September, and this included 5 trade missions that brought out around 50 UK companies to China in that week.

  • A City of London project to develop a venture capital industry in China.

  • The China-Britain Natural Gas Working Group, which has won over £225 million of business for UK companies over the last three years.

We are developing a UK National Trade and Investment Strategy for China. This will inform how we develop our existing network of support in the UK for companies looking to do business in China.

There will be a greater push to encourage Chinese business to invest in the UK. There are now approximately 370 Hong Kong and Chinese companies investing in the UK. But there needs to be more.

Finally, the UK-China joint statement agreed between the Chinese and British Prime Ministers recommended greater support for small and medium sized enterprises in both countries. I'm therefore delighted to hear that over half the members of the British Chamber are SMEs.

On an important practical level, we are reinforcing our trade and investment presence around China, through the Embassy and Consulates, and through our partners in the China Britain Business Council. And I know the UKTI team here are working closely with the British Chamber and China British Business Council to better define and differentiate our combined service to UK companies and better explain these respective roles to companies at home.

The Government recognises that there is enormous potential for the UK as a result of China's economic development. We want to help you to realise this potential. And in turn I hope that you will lend a hand to British companies looking for advice on the pitfalls and opportunities of doing business in China.

  • Conclusion

Two-way trade doesn't just benefit the UK. It also benefits China. We want to see a successful, prosperous and stable China. And, we want to see a successful, prosperous Britain too - with both benefiting from trade with each other. So to end, I'd like to propose a toast....To greater trade, and to greater understanding.

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Directeur de la publication : Joël-François Dumont
Comité de rédaction : Jacques de Lestapis, Hugues Dumont, François de Vries (Bruxelles), Hans-Ulrich Helfer (Suisse), Michael Hellerforth (Allemagne).
Comité militaire : VAE Guy Labouérie (†), GAA François Mermet (2S), CF Patrice Théry (Asie).