Lord James Sassoon is the Chairman of the China Britain Business Council and executive director of Jardine Matheson & Co. He explains that the UK-China relationship will only strengthen
At CBBC, throughout our 65 years supporting UK-China trade and investment, we have described our work as ‘helping UK companies enter the China market’. Of course, this is still at the core of what we do. But the reality of the UK-China relationship today is so much more sophisticated than just this. These days at CBBC, we talk about ‘helping UK and Chinese organisations cooperate in the UK, China and third markets around the world’. This shift in our thinking sums up both China’s development over the last 40 years and the relationship between the UK and China.
After 40 years of prudent opening up, China is now ‘opening out’. The domestic economy is increasingly intertwined with the global economy. Overseas investors, sovereign and private, while a little more reserved since the tighter regulations of 2016, are increasing their footprint around the world – with the UK as the leading destination in Europe for a number of projects. Ripples in Chinese financial markets, good and bad, are increasingly felt internationally. And the Belt and Road Initiative, combined with the establishment of the Asian Infrastructure Investment Bank, is perhaps the clearest embodiment of China’s new place in the economic world order.
And the UK can be at the centre of this ‘opening out’, as our expertise in global financial and professional services, advanced manufacturing and healthcare, to name just a few sectors, complement China’s requirements. While other countries may have had a more relevant skillset to meet China’s needs in the first 40 years of opening up, the future plays to the UK’s strengths in education, professional services, high technology, healthcare and the creative industries.
At the heart of the UK-China relationship has been a mutual respect, strengthened by regular strategic dialogues
What is even more meaningful is that China’s development has also shifted the focus of global trade. In 1980, the EU economy accounted for 34 percent of the world economy and the US 26 percent, with East Asia at 16 percent. However, in 2017, East Asia accounted for 27 percent of the world economy, the US 24 percent and the EU 21 percent. Much of this shift has been driven by China.
At the heart of the UK-China relationship has been a mutual respect, strengthened by regular strategic dialogues on a wide range of bilateral and global issues covering culture, business, finance and security. I have participated in a number of these dialogues over the last fifteen years. In her foreword to a publication celebrating 45 years of diplomatic relations after they were established in 1972, UK Ambassador, Dame Barbara Woodward, talks about the three pillars of ‘government to government’, ‘business to business’ and ‘people to people’ as the three legs of a ‘Ding’ Chinese pot. “The three legs provide stability… the UK and China have those now,” the Ambassador said.
Visits and dialogues at the very highest levels have continued at pace this year. The Prime Minister visited China in January, followed by the Chancellor in May and the new Foreign Secretary in July. The Secretary of State for International Trade has made five visits this year, most recently in November at the China International Import Expo. These visits have been instrumental in maintaining the momentum of commercial exchanges, further opening the Chinese market for UK goods and services and setting the scene for a possible trade deal after Brexit.
In 1980, Germany’s GDP was almost three times that of China. However, in 2017, China’s GDP was 3.3 times Germany’s. It is a truly remarkable economic story. The UK has been an active participant in this story over the last 40 years, and what is most exciting is that the most mutually beneficial parts of the UK-China story will be written over the coming years.
