Strengthening economic and cultural ties with China
The Business Secretary speaks about doing business and strengthening economic and cultural ties with China.
Business has always been a part of my life.
Not just the 20 years I spent in international banking, but the heart and soul of my childhood, growing up in a small flat above the family shop.
Throughout that time I’ve seen how business can do a great many things.
It doesn’t just provide jobs and local growth.
It lifts individuals, communities and even countries up to be the best they can be.
China’s recent history provides a very real example of this.
In recent months we have been talking about a golden year for UK-China relations:
- a year in which we have strengthened the economic, political and cultural ties between our 2 countries
- a year in which I have had the privilege to make not one but 2 formal visits to China
- a year in which the UK welcomed President Xi on a state visit – the first visit of its kind for a decade, and only the third in history
The challenge now is to turn this golden year into a golden era.
To build a common future that benefits both our nations.
And business has a huge role to play in making that happen.
Because it is business that produces sustainable growth.
Business that creates long-term jobs.
And business that makes our economies as productive as they can be.
There is an increasingly natural fit between our 2 economies.
Here in Britain our economy is growing faster than that of any other G7 nation.
As we continue to implement our long term economic plan for the UK, China offers us a huge new source of investment and export opportunities.
Meanwhile, even if China’s economy were to grow by only 5% this year, it would still represent a quarter of all global GDP growth in 2015.
And as China rebalances and reforms its economy, UK companies, technology and services can complement its development and help it achieve its ambitions.
Doing more business together has already been of great benefit to both our countries.
China is now Jaguar Land Rover’s largest market. To keep up with demand it recently invested £520 million in the most modern engine plant in the UK, creating 1,000 new British jobs.
And it has also opened its first ever overseas manufacturing facility, in Changshu – creating jobs for Chinese workers, too.
Meanwhile the Chinese car maker Geely is investing £250 million in a new factory, research and development centre and assembly plant for the London Taxi Company.
Ninety per cent of the almost 400 million smart phones sold in China last year are powered by chips supplied by Britain’s ARM.
The UK is now firmly established as the most popular destination in Europe for investment from China.
Investment has come from sovereign wealth funds, state-owned enterprises and the private sector, and flowed into sectors as diverse as energy, retail and the digital economy.
And we’re also making connections on a more human scale.
Last year, when I was Culture Secretary, a Chinese exchange student came to stay with my family.
On her first day in London I asked her what she wanted to experience:
- the incredible museums?
- the beautiful world heritage sites?
- the cutting-edge cultural scene?
She didn’t hesitate before answering.
How far is it to the Bicester Village shopping mall?
So we’re already co-operating on so many levels.
But what excites me most isn’t what we’ve already achieved, so much as the sense that this is just the beginning.
President Xi’s State Visit presented unique opportunity to take things to next level.
The tens of billions of pounds of new trade and investment deals announced during the visit offered glimpse of what is possible.
The prospect of over £25 billion into UK nuclear projects, starting with Hinkley Point C, represents one of China’s biggest-ever overseas investments.
Hinkley Point C alone will generate a stable source of clean power to nearly 6 million homes and provide up to 25,000 jobs.
And the benefits are not limited to manufacturing and industry.
BBC Earth Films and SMG Pictures are to co-produce a new documentary feature film for cinematic release in 2017.
It’s the first deal completed under the landmark Sino-UK Film Co-Production Treaty ratified earlier this year when I was Secretary of State for Culture.
And York University and the China Capital Investment Group have developed a £200 million TV training programme that will benefit up to 300 Chinese students each year.
We welcome this kind of investment because open markets and fair competition are good for our economy and good for the global economy.
But it’s not just the UK that has benefited from free trade and open markers.
After China joined the WTO it enjoyed one of the best decades in economic history.
Its GDP quadrupled and its exports grew 5 times over.
That’s why I welcome the new wave of economic reforms started by President Xi in 2013.
Opening up to more foreign competition, especially in the services sector, will benefit China’s economy and help its companies become more competitive at home and abroad.
And as we build closer economic ties with China, we will also do more trade with its neighbours in South East Asia.
Because although bilateral trade between the UK and ASEAN markets was worth almost £23 billion last year, there’s a lot more we can do together.
It’s a stunningly bad statistic that Britain still does more trade with Belgium than with the whole of Indonesia, Malaysia, Singapore and Vietnam combined.
But it doesn’t have to be this way.
In the last 30 years the UK has successfully attracted a wide range of world-leading overseas-owned companies that are now fully embedded in the UK business community.
These companies come for the market:
- for the open, business-friendly regulatory framework
- for access to talent, skills and technology
We want to do as much as we can to open up business opportunities in Britain to overseas investors.
We want to continue to welcome Chinese and South East Asian companies to the UK to compete on a level playing field with no barriers and no special favours.
We want you to be part of the renaissance of our rail industry.
We want the UK supply chain that provides up to half the content in an Airbus to help China develop its own aircraft build programmes.
We want to increase the number of banks clearing RMB payments in London.
We want more British brands to tap into the dramatic growth in Asian consumption online and offline.
We want more Asian tech companies to do their research and development in the UK.
We want our creative industries to take on the world together.
We want to work with you to deliver better healthcare and help create the medicines of tomorrow.
We want to encourage Asian investment in the Northern Powerhouse, the Midlands Engine and National Infrastructure Plan projects.
In short, we want the UK to be China’s number one business partner in the West, and we want ASEAN to see the UK as its gateway to Europe.
If we do all that, if we take bold steps forward and make the UK-China relationship the best it can be, we will truly turn this golden year into a golden era – for the UK, for China, and for the ASEAN family.
It’s a goal that is well within our reach, and today’s summit will help us all reach it.