Belfast Telegraph

UK Website Of The Year

Home News UK

George Osborne seeks to make the UK China's 'best partner in the West'

Published 20/09/2015

George Osborne is embarking on a week-long visit to China
George Osborne is embarking on a week-long visit to China

Britain must become China's "best partner in the West", Chancellor of the Exchequer George Osborne said as he arrived in Beijing at the head of a top-level business delegation.

The Chancellor is embarking on a week-long visit, covering thousands of miles as he criss-crosses the country to promote UK trade not only in the Chinese capital and in financial centre Shanghai, but also in some of the emerging cities of the interior which are expected to drive future growth.

Mr Osborne - whose trip comes ahead of next month's state visit to the UK by President Xi Jinping - said that China's summer of financial turbulence and the recent slowdown in its GDP growth should not divert the UK from its strategy of integrating with the world's fastest-expanding regions.

With the east Asian giant expected to be the world's largest economy by 2030, Mr Osborne said: "There are those that say we should fear China's rise - that we should somehow guard ourselves against it. But we both reject such thinking, which would simply leave the UK slipping behind. Instead, we should embrace it."

In an article for The Observer jointly penned with Treasury minister and former Goldman Sachs chief economist Lord (Jim) O'Neill, the Chancellor continued: "We want a golden relationship with China that will help foster a golden decade for this country. It is an opportunity that the UK can't afford to miss.

"Simply put, we want to make the UK China's best partner in the West."

Accompanying Mr Osborne are not only six Government ministers and a group of executives from leading UK companies, but also civic leaders from "Northern Powerhouse" councils Liverpool, Manchester, Sheffield and Trafford and the heads of major cultural institutions including the British Museum, National Theatre and Cornwall's Eden Project. A number of cultural exchanges are expected to be announced during the visit.

"We want to promote understanding between our two great cultures, which have arguably done more to shape the world than any other," said Mr Osborne.

He acknowledged the "inevitable risks" of forging economic links with China, which was forced to devalue its renminbi currency over the summer to rein in market volatility which saw the value of shares on the Shanghai stock exchange tumble 30% over three weeks - and by 8.5% in a single day in August.

But he insisted: "Recent volatility should not and will not put us off. It should drive us forward so that we integrate China's new financial markets with our own so they are deeper and better able to absorb shocks.

"Then it should serve as a reminder to get our house in order so that we can deal with global difficulties."

Britain's drive to build links with emerging economic powers has seen the UK attract more Chinese investment since 2010 than Germany, France and Italy combined, with exports up 73%, said the Chancellor.

"Even as China's growth slows, it will continue to be a powerhouse for the global economy," he added.

Continued growth will create further opportunities for Chinese investment in the UK and for Chinese firms to locate facilities in Britain, as electronics company Huawei did last year, said Mr Osborne. And he said that expected increases in Chinese domestic consumption of goods and services will create opportunities for UK manufacturing, infrastructure, retail and financial services.

He pledged the Government will ensure that the benefits of the stronger relationship will be felt not only in London, but across the UK, with businesses from the north of England, Wales and the south-west represented on the trip.

"We are at a critical moment in our relationship with China," said the Chancellor. "We need to double our efforts to strengthen our economic links, help British firms enter the market there, and attract more investment into the UK and the Northern Powerhouse.

"Rather than standing back and being left behind, we must make the most of the opportunities that a growing China presents to us here in Britain."

The trip marks a continuing upswing in UK-China relations, which were briefly thrust into the deep-freeze by Beijing's displeasure at Prime Minister David Cameron's 2012 meeting with the Dalai Lama.

In a concerted effort to restore good relations, both Mr Cameron and Mr Osborne visited in 2013, when the PM urged China to invest in British infrastructure including nuclear power stations and high-speed rail.

Despite growth slowing to 7% in the first half of this year, China continues to represent around a quarter of the world's GDP growth. It is the sixth biggest market for exported British goods.

Mr Xi's trip to the UK will be the first state visit by a Chinese leader for 10 years, and will include a stay at Buckingham Palace as the guest of the Queen.

Mr Osborne was interviewed at a Beijing tech start-up incubator by prominent TV host Tian Wei.

He said he had insisted that as well as trips to regional centres like Chengdu in Sichaun and Urumqi in Xinjiang, his visit should include a trip to the Shanghai Stock Exchange, in order for him to deliver a message of confidence in the Chinese economy following this summer's turmoil.

Mr Osborne said: "I am going very deliberately to the Shanghai Stock Exchange ... and I'm going to talk there specifically about the financial markets and the events of the summer.

"Of course there have been ups and downs. But in our estimation, the spillover effects - the impact of that on other financial markets - has been relatively limited.

"If you look at the broader picture in China, even if it is not growing by double digits in the way it once did, it is still creating an economy the size of the UK over the next five years, so it is a massive source of global growth going forward."

The Chancellor added: "The message I would say to China is 'Carry on with the reform, carry on with the change you are making'.

"It will be of course challenging. It couldn't be anything other than challenging when you are the world's second largest economy with 1.3 billion people and you are undergoing this big change.

"You will get big movements in the stock markets but it is important to keep your eye on the bigger picture and the bigger prize, that this period of economic reform can lay the foundations for Chinese prosperity for decades to come. We are very supportive of the economic reforms that the Chinese Government have talked about."

Your Comments

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting?

Read More

From Belfast Telegraph