Research and analysis

China:11th UK-China Joint Economic and Trade Commission

Published 5 June 2014

0.1 Detail

The 11th UK-China Joint Economic and Trade Commission concluded in Beijing on 28 May.

Secretary of State for Business Innovation and Skills Dr Vince Cable held a bilateral meeting with China’s Minister of Commerce Gao Hucheng, followed by a plenary session and dinner with invited representatives of major British companies including BP, Shell and HSBC.

Both sides welcomed the recent explosion in Chinese investment into the UK and record UK exports to China. The Chinese side recognised once more the growing complementarity between our two economies and the historic opportunity for the UK as China seeks to change its growth model and become a knowledge economy.

At dinner, Gao identified two areas where the UK could particularly help China in the next phase of its development:

• Liberating financial resources (further financial sector reform)
• Liberalising services

This was consistent with discussions at a cordial and business like bilateral meeting and plenary session, which saw agreement to expand co-operation in a number of specific areas:

Trade in Services

Dr Cable and Minister Gao agreed to establish a new working group on trade in services under the JETC. Gao noted that Dr Cable’s prominent role at China’s big annual international fair on trade in services (CIFTIS) – he was the only foreign Minister invited to speak at the opening ceremony – showed China acknowledged the UK’s world leading position in the services sector, notably financial and legal services, healthcare, innovation and design.

Due Diligence

Gao agreed that access to transparent corporate information was important for investor confidence. MOFCOM will meet representatives of the British business community to discuss their concerns, which they raised with the Prime Minister ahead of his December visit.

Intellectual Property Protection

Gao invited the UK to input into a review of China’s measures covering IP protection at Trade Fairs to prevent trade fairs being used to sell large numbers of infringing products and to work with us to improve copyright enforcement mechanisms in China.

Free Trade Zones

China agreed that an academic seminar it had proposed for the Summit on an EU-China Free Trade Agreement (FTA) should give equal prominence to UK-China collaboration on the Shanghai (Pilot) Free Trade Zone and involve the working group of 40 multinational companies based in the UK led by Gerry Grimstone, Chairman of TheCityUK and Standard Life plc. This group is developing practical suggestions to meet China’s objectives for the Free Trade Zone.

Standards

The two sides agreed to establish a Standardisation Co-operation Commission led by our respective Standards bodies, BSI and the Standards Administration of China. Acceptance of UK business practices and services will make our companies more competitive bidders in the 202 cities in China seeking to deliver ‘smart city’ projects. And working with China will help British businesses in emerging markets, notably Africa, where investment is increasingly being made to Chinese specifications.

Collaboration on Infrastructure Projects in 3rd Markets

MOFCOM acknowledged the important contribution of the UK-China Infrastructure Forum and CEO Forum chaired by Sir Michael Bear, and undertook to work with us to develop new pathways to support collaboration in 3rd markets.

Gao reiterated China’s strong interest in developing its collaboration with the UK on civil nuclear energy and rail, in particular HS2. Gao also highlighted the UK’s leadership role in promoting cooperation between China and the EU, his appreciation for the UK’s opposition to trade protection and our positive attitude to promoting an EU/China FTA. Dr Cable agreed on the need to promote trade liberalisation and said the UK would always be found arguing the case for free trade.

On WTO issues, Gao (a former WTO negotiator) said China would conscientiously implement the Bali agreement, that most trade facilitation measures should be implemented by 2015, and that developed countries should provide capacity building assistance to developing countries to make this possible.

Gao welcomed UK/EU support for China’s application to join the Trade in Services Agreement (TiSA) and felt there was scope to strengthen UK/China cooperation to push along the Information Technology Agreement and make progress on green goods.

Comment

As a result of the JETC we can now consolidate important working level cooperation with MOFCOM in key areas such as IP, due diligence and Free Trade Zones. The outcomes paper is a useful innovation for the JETC and means that what has been agreed can be broadcast more widely

This JETC should have real impact on issues that matter to UK companies doing business in China.

0.2 Disclaimer

The purpose of the FCO Country Update(s) for Business (”the Report”) prepared by UK Trade & Investment (UKTI) is to provide information and related comment to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. The Report’s contents were believed (at the time that the Report was prepared) to be reliable, but no representations or warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its suitability for any purpose. In particular, none of the Report’s contents should be construed as advice or solicitation to purchase or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report.