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UK-China: a Global Partnership for the 21st Century

Speaking on 12 August 2015 at Peking University, Beijing, the Foreign Secretary said:

Thank you Professor Wang for that introduction. And thank you to Beida for kindly hosting us this afternoon. I know that many of you will have given up your summer holidays to attend summer school here and it’s a pleasure to be addressing such a studious audience in such beautiful and prestigious surroundings.

And I am happy to be giving this speech in the exact same venue David Cameron chose for his speech on his first visit to Beijing as Prime Minister in 2010. He gave that speech just six months into office, when the economic conditions in the UK, and indeed in many parts of the world, were rather different. We had just inherited an economy on the brink, with public debt and borrowing out of control, the economy shrinking, and great uncertainty in the markets about Britain’s future.

Today, I’m pleased to report, the situation is very different. We’ve taken the tough decisions to deal with our deficit, to rebalance our economy and to kick start growth – with the result that we had the fastest rate of growth of the major advanced economies in the world last year. We’ve also experienced the largest fall in unemployment in our history as Britain has created more jobs than the rest of the European Union put together. Quite a turnaround!

Now, re-elected for a second term of government, Prime Minister Cameron is focused more than ever on making the UK one of the best places in the world to do business. We have the joint lowest corporation tax rate in the G20, with further tax reductions due in 2017 and 2020. We’re cutting red tape and regulation. We’re reforming the education system and creating millions of apprenticeships to boost skills and productivity, moving our economy up the value curve. And we’re investing in our national infrastructure (much of which, to put it politely, is “mature”) including a new high speed rail network linking London with the great northern cities which were once, and can be again, the powerhouse of our industrial economy – and we very much welcome the strong interest China has expressed in that project.

We are an open economy, which thrives on trade. So we will prosper when we build strong relationships with other economies that are prospering. When David Cameron spoke here almost five years ago, he set out a clear ambition for Britain to build a strong partnership with China. Strong on trade, strong on investment, and strong on cooperation. A partnership based on our shared commitment to free trade and economic openness and to the maintenance of the rules-based international system which protects our shared interests. Five years later, we are seeing the fruits of that ambition and of our commitment to realising it, with relations between China and the UK entering what the leaders of both countries have described as a “golden era”.

We are proud to be the country in Europe most open to China: to Chinese business and investment; to the Chinese people; and to Chinese innovation and ideas.

In the last five years, Chinese investment in the UK has grown by an astonishing massive 85 per cent a year, meaning the UK is now the number one destination for Chinese direct investment in Europe – with almost 30 per cent of the total. Even by the standards of China’s astonishing economic record, that is an impressive annual rate of growth. Last year alone, Chinese businesses started 112 projects in the UK which resulted in almost 6,000 new or safeguarded jobs.

Last year, the UK became the first Western country to issue RMB-denominated sovereign debt; and we are now the second largest European exporter to China after Germany.

When it comes to people-to-people contact, the ties between Britain and China are stronger than ever before. We now have 135,000 Chinese students studying at institutions in Britain; and last year, more than half a million Chinese visitors came to the UK. Between our Governments, the number of high level exchanges, as Professor Wang pointed out, is at unprecedented levels as we build and broaden our partnership for the future. And in the last five years, we have expanded the UK’s diplomatic network in China, opening our new Consulate General in Wuhan and ramping up the number of British diplomats, to ensure we are well placed to respond to China’s historic re-emergence as a global power, and to underpin the “indispensable partnership” that Premier Li has described between our two countries. And we are delighted that China in turn has added a new Consulate General in Belfast to its established ones in Edinburgh and Manchester.

And when it comes to working in partnership with China on the world stage, there is no country in Europe more open than Britain. We were the first major European country to join the Asia Infrastructure Investment Bank, signing the Articles of Association here in Beijing at the end of June, allowing us to support Asia’s economic development and to share our experience of International Financial Institution regulation in developing the governance model for the AIIB. We welcome and support the internationalisation of the Renminbi, with London hosting the first RMB clearing bank outside Asia. And we are enthusiastic about collaborating on President Xi’s strategic “One Belt One Road” initiative; as well as many other emerging projects.

So even before I have my Strategic Dialogue with State Councillor Yang tomorrow, I can confidently report that the bilateral relationship between our two countries is in excellent health; as strong as it ever has been and growing stronger as we look forward to the historic state visit to the UK by President Xi later this year.

But of course, in this increasingly interconnected and globalised world – where shocks on one side of the world are transmitted rapidly to the other – the bilateral relationship between our two countries is only half the story.

President Xi has spoken of an Asian “community of destiny” – of how the interests of Asian nations have become increasingly intertwined.

I would like to extend President Xi’s image further, and argue that in the 21st Century, the destinies of all nations are inextricably linked.

As the global financial crisis, or the recent outbreak of Ebola in West Africa, or the rise of Islamist extremism have demonstrated, national borders no longer act as barriers to the transmission of global threats.

No country that is part of the global economy can isolate itself from, or be immune to, the global challenges or threats that we face together.

But just as no country can be immune from the global challenges we face, nor does any single country have either the resources or the ability to tackle them alone.

Whether it’s limiting the effects of climate change, tackling global terrorism or preventing the proliferation of nuclear weapons, in every case we need to work in partnership with like-minded nations, who share the same self-interest in a stable and sustainable world as a platform for growing prosperity.

We’ve had some major successes. Take Iran.

China and the UK have both worked patiently and methodically over many years, to ensure that Iran’s nuclear programme is purely for peaceful purposes. We worked as partners, alongside the US, France, Germany and Russia. And the deal we reached in Vienna last month represents a major success for multilateral diplomacy.

For no member of the P5+1 could have delivered that outcome alone. Iran could not have reached a bilateral deal with the United States. Yet through our collective determination to work together, to present a united position to the Iranians, and through our willingness to stay the course over many years, we proved the power of patient multilateral diplomacy to unlock the most complex of problems.

The deal has the potential to be a hugely positive step for the Middle East, with benefits well beyond the nuclear file if Iran now engages as a responsible state actor in relation to the challenges facing the region.

And there may be lessons to be drawn around the world – including on tackling nuclear proliferation in the DPRK.

While the UK is not a member of the Six Party Talks, we and the wider international community share an interest in ensuring this particular multilateral initiative succeeds in bringing to an end North Korea’s nuclear weapons programme. China, of course, has a particularly influential role to play.

Some said a good nuclear deal with Iran was impossible; that the P5+1’s interests would never align to present a united front to Iran.

In Vienna, we proved them wrong. I hope that in the future we will see that even North Korea, although very different, is not beyond the reach of multilateral diplomacy.

Or take the outbreak of Ebola virus in Sierra Leone, Guinea and Liberia, which had the potential to become a global pandemic.

An international coalition mobilised to respond, with Britain leading that response in Sierra Leone. China’s level of support to help tackle the crisis was unprecedented, showing a great willingness and capability to work with us and other members of the international community to contain and suppress a disease that was potentially a threat to all mankind.

The UK and China worked closely together during the crisis. And now we are discussing together what could be done better in the future, including the need for a more effective global health security system, led by the World Health Organisation.

Of course, there is always scope for us to do more together.

One of the greatest challenges we face to global security is from Islamist extremism. The rapid rise of ISIL; their brutal seizure of territory to establish a so-called caliphate in Syria and Iraq; the humanitarian crisis they have precipitated as millions of people across the region have fled their barbaric regime of beheadings, torture and violence…

…and the spread of this cancer through “franchise” operations in vulnerable countries…

…all of this represents a major threat not only to security in the Middle East, but also to our homeland security through the threat from returning foreign fighters.

Again, this is a problem that no one nation, however powerful, can tackle alone. We have to work together against the common threat. The UK and China have cooperated on UN Security Council resolutions introducing sanctions on ISIL’s leaders and to restrict the flow of foreign fighters and finance to ISIL. And the UK and China are among the leading contributors of humanitarian assistance to Iraq.

But as Prime Minister Cameron has said, we are in the midst of a generational struggle against the perverted ideology that drives Islamist extremism. The UK, China and our P5 partners will need to work together even more closely in the future to expose ISIL’s true nature, to take action against those who finance it, and to prevent foreign fighters from joining it.

The lesson we draw in our response to these global challenges is that, by acting together, in groupings of like-minded partners and allies, working through the multilateral mechanisms of the UN and the International Financial Institutions, we can tackle effectively even the most seemingly intractable threats to our stability, our security and our prosperity…

…and we can do so with the moral authority of a rules-based international system mandating our vital work.

I share the view that Premier Li articulated so cogently at Davos in January this year, that the global stability we seek as the fundamental underpinning to our continued prosperity is best realised through the framework of laws, norms and institutions that together constitute the Rules-Based International System developed after the Second World War. Like China, the UK takes very seriously its responsibility as a P5 member of the Security Council for stewardship of that system and is deeply committed to maintaining and strengthening it through careful evolution, while protecting its essential effectiveness.

In Europe, in May, we commemorated the 70th anniversary of the end of the Second World War on our continent. The strategic rivalry that twice devastated Europe in the first half of the 20th Century is now inconceivable. We have learned that the route to confidence and trust between nations runs through multilateral institutions, from the UN down.

In Asia, as we approach the 70th anniversary of the end of the World War in this continent and remember the terrible destruction and human suffering that conflict inflicted on the region…

…we need to reflect on the fact that, unlike in Western Europe, the process of reconciliation is not yet complete here; that territorial disputes remain unresolved and that mutual confidence and trust still needs to be built – despite the explosion of economic cooperation in the region.

That Rules-Based International System, of which Premier Li spoke so warmly in Davos and which has delivered for the world in so many areas, has to apply universally, if it is to be credible. So it has to be the default solution, wherever we see tension and the risk of escalation… as we do now in the South China Sea.

As a maritime trading nation, dependent upon the world’s sea lanes for the delivery of 95 per cent of our trade, and conscious that $5 trillion worth of trade passes through the South China Sea each year…

…as a P5 member; in all of these roles as a member of the Five Powers Defence Arrangements…

…the UK has a strong interest in the stability of the South China Sea region.

To be clear: we do not take any position on the underlying sovereignty disputes in the South and East China Seas. But we do have a position on how those claims should be pursued and, in time, resolved.

As Premier Li said, geopolitical conflicts must be resolved peacefully through political means.

We agree. We want to see claims dealt with by rules-based, not power-based solutions in Asia, as elsewhere…

…in a way which is consistent with the long-term peace and stability of the region, with freedom of navigation and overflight, and in accordance with international law, including the law of the sea.

With increasing power comes increasing responsibility, and we look forward to working in partnership with China to pursue peaceful resolution of disputes in the region and beyond, and to respond to the many global challenges we face…

…from climate change to global pandemics…

…from international terrorism to nuclear proliferation…

…and to securing cyberspace against the piracy and lawlessness which undermines investment confidence and economic growth.

Let me finish where I started: the strength of the “indispensible partnership” between the UK and China.

You can judge the strength of any bilateral relationship not simply by the number of areas in which two countries agree, but by the maturity of the way in which areas of disagreement are handled: we have some of our most frank discussions with our closest allies.

Our relationship with China is no different – and I am looking forward to a wide-ranging and open discussion with State Councillor Yang tomorrow.

As I’ve set out already, there is a large and growing range of issues; climate change, counter-proliferation, the development challenges in Africa are among them, on which we are already working together highly effectively.

But our relationship has become sufficiently mature that we can be candid with each other in our private discussions about those areas on which we do not see eye to eye – including human rights.

The whole world welcomes the dramatic economic progress that has been made in China over the last three decades, and the remarkable achievement in lifting 600 hundred million people out of poverty – by far the largest contribution of any nation to global poverty reduction.

And as the Chinese economy moves into its next phase of development, including the unleashing of entrepreneurship and innovation on a huge scale, of which Premier Li has spoken, economic progress will increasingly depend on the development of the central role of the rule of law, which President Xi has prioritised, to provide the certainty and the security that investors and entrepreneurs require.

We will, of course, continue to discuss all of these issues, through our strategic dialogues, in the many ministerial-level meetings between Britain and China, and in our annual human rights dialogue. With each side being able to raise its concerns in an atmosphere of friendly but frank exchange of views.

And I firmly believe that by addressing these issues, rather than sweeping them under the carpet, we are making our relationship even stronger.

Because if we are to increase the prosperity of our peoples, we are going to have to work together more closely than ever before.

As President Xi said in Bo’ao earlier this year, “we have only one planet, and countries share one world.” That wise observation places obligations on all of us – to make that one world a stable, sustainable, secure and prosperous place. Britain and China working together can help deliver that ambition.

A strong Britain as China’s gateway to Europe, and China as the powerhouse of Asia…

…working together, collaborating to uphold and develop the Rules Based International System on which we both depend: together, we can play a major role in ensuring the future prosperity and security of our “one world”.

I am confident that, as our leaders have both said, we do indeed have a “golden era” of relations between our two countries ahead of us. And we in the UK are determined that the State Visit of President Xi this Autumn should herald the dawning of that era.

The road ahead, of course, will not always be easy. The challenges we face will not always melt away on our first engagement with them. But working together, with quiet determination, Britain and China can, over the years ahead, play a major role in delivering the peace and the prosperity that is the ardent desire, not only of our two peoples, but of all people of the world.

Thank you.

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