Despite the turbulence of recent months marked by Brexit and Covid-19, John Edwards, newly appointed HM Trade Commissioner for China, paints a positive picture of the future of trade relations between China and the UK
Overseeing the Department for International Trade’s China arm, John Edwards has been busy in recent weeks managing the logistics of purchasing and transporting large volumes of medical supplies from China to the UK. But as the need for such emergency interventions levels off, Edwards says that DIT China will be focusing on three primary areas. First, updating its digital offering to facilitate future bilateral trade and related events. Second, engaging in more government-to-government work and cementing its transformation from trade promotion body to market access body. Third, becoming more active and visible in demonstrating that the China market is open and ready for business.
Edwards acknowledges the increasingly complex political environment that has developed in the wake of the pandemic, but notes that the UK government remains ambitious in its plans to develop the UK’s trade and investment relationship with China. “If you are talking geopolitically and strategically, then there are transformational benefits for ongoing and deepening ties of commerce and economy between China and the rest of the world and between China and the UK,” he says.
Whilst trade has been negatively affected by the pandemic, the UK’s exports to China as a proportion of its total global exports have increased over the last four months, and recent years have seen Chinese investors looking outside of London to areas that do not traditionally attract investment such as Hull, Mansfield, and Bolton.
On the topic of recent geopolitical tensions and the increase of negative rhetoric towards China, Edwards acknowledges that disagreements between the UK and China – both at the government level and between businesses – are natural. However, he emphasises that both China and the UK are aware of the benefits of their ongoing cooperation, even if differences in opinion may arise, and highlights that the UK government does not oppose the rise of China.
“There’s a recognition on the UK side that we have to be driven by our national interest and have a distinctive UK policy, and I think there’s recognition on the Chinese side that they should not see the UK as a proxy for other governments,” says Edwards, urging businesses and stakeholders to look past the most extreme voices and focus on the government’s top-level stance on China.
There are transformational benefits for ongoing and deepening ties of commerce and economy between China and the rest of the world and between China and the UK
Edwards emphasises that although China has not been named as a priority target for a Free Trade Agreement (FTA) following Brexit, the UK government has an ambitious agenda for the relationship.
“There can be no global economic recovery without China, and indeed there can be no UK global ambition post-Brexit without China,” he says. He emphasises that although an FTA is not immediately forthcoming, the government’s ongoing work to improve UK businesses’ access to the China market through regulatory reform and market access initiatives has the potential to open up billions of pounds worth of trade.
Although market access and China’s regulatory environment remain a challenge for UK businesses, Edwards highlights some positive developments such as the introduction of equity caps for joint ventures and real improvements in the implementation and enforcement of intellectual property. That being said, Edwards is aware that there is much still to be done to further open up the China market. “What we hear all the time from British businesses here is that while central government policies are moving in the right direction, there’s still a time lag or a gap or an unwillingness for that to be implemented at the provincial and sub-provincial level,” he notes.
Edwards expresses cautious optimism for China’s economic recovery following Covid-19, and highlights several key areas of opportunity for UK-China trade. He predicts particular demand for the UK’s creative technology, edtech and fintech, and ongoing cooperation in the trade of pharmaceuticals and medical equipment. In particular, Edwards highlights food and drink as the fastest growing sector for UK exports to China, thanks to the aggregate impact of many SMEs operating in this field. Beer exports, he notes, have been growing at over 100 % a year.
Finally, referencing his own background working on environmental issues, Edwards highlights his commitment to engaging China on climate change, noting that China has already contributed to this endeavour. He predicts close cooperation between the UK and China on this issue moving forward in areas such as offshore wind consultancy, and notes that DIT has dedicated teams working to develop the UK’s capacity in areas such as green finance.
