Speaking to the China-Britain Business Council in Plymouth today, he said:
Ships like the Mayflower and the Clove sailed from Plymouth to begin links with countries from America to Japan. The mighty Exeter City was the first football team to play against Brazil in Rio, one hundred years ago. And one of the most famous foreigners in Chinese history, Sir Robert Hart, went to school in Taunton.
But today’s event is about “the changing face of China”. And to give some idea of the speed and scale of that change, a population the size of Plymouth will move from rural China into its cities every week for the next 30 years: the greatest mass migration in human history.
So, this afternoon I will speak about the growing importance of China; the opportunities this presents for the UK; and what the Government is doing to ensure the United Kingdom capitalises on them.
First, China’s rise is well known:
- economic growth averaging almost 10% a year for the last three decades.
- an economy that has effectively doubled in size every eight years.
With this growing economic power has come a desire to play a greater role in world affairs.
But, should we view China’s rise as a threat or an opportunity? Should we try and shut it out – or welcome it as a partner?
Britain’s answer is clear. We want to see China succeed.
China offers many of the things that we need and vice versa.
So, there are enormous opportunities for us to build our mutual prosperity.
Let me explain why:
The UK is an ideal partner for Chinese companies as they look to internationalise their brands. We offer transparency; a genuinely level playing field; doorstep access to the world’s premier centre for financial and business services; and a gateway into China’s largest overseas market – the EU.
Chinese companies bring the UK growth and jobs. The fact that Huawei - a company of global importance – is set to open a new £125 million Research and Development centre in Bristol next year, reflects the UK’s reputation as global hub for technology, innovation and design.
China also needs to diversify its foreign investments - currently dominated by US Treasury Bonds and investments in resources in developing countries.
We need and welcome investment in our national infrastructure, including the new nuclear power station at Hinckley Point in Somerset.
We are more open to Chinese investment than any other Western country. The Chinese Government say there has been more Chinese investment into Britain in the past 18 months than in the previous 30 years.
And to enable us to attract even greater levels of Chinese investment, at the UK-China Economic and Financial Dialogue in September, the Chancellor agreed that the UK would issue a sovereign bond worth approximately £300 million in China’s currency, the renminbi - becoming the first western country to do so.
So, we are in a moment of historic opportunity. As China rebalances its economy and unleashes the spending power of its new urban population, British companies are well-placed to enter new long-term markets.
For example, China needs to develop its services. And UK service companies are a great strength of our economy, and globally competitive. Merlin Entertainments, with its headquarters in Poole, Dorset, is one of the companies rapidly growing its footprint in China. It has just opened a Madame Tussauds visitor attraction overlooking Tian’anmen Square.
The growing Chinese middle class wants to spend newfound wealth on British luxury goods: from Dartington crystal, to Moulton bicycles and Mulberry handbags.
And Chinese consumers are increasingly concerned with the safety of their food and drink. Avon Dairy Solutions from Wiltshire successfully set up a manufacturing facility in Shanghai and are going from strength to strength with their UK-designed equipment for the dairy industry.
Put simply, we need to export more and China is the world’s fastest growing major market.
But with China’s rise, it is also clear that China needs to manage its rapid urbanisation sustainably. Again – an area where the UK is a world-leader.
Secretary of State for Communities and Local Government Eric Pickles is visiting Beijing and Guangzhou this week, accompanied by Sir Michael Bear, the UK’s Special Envoy to China on Urbanisation.
Their visit will: strengthen cooperation on urbanisation and investment; promote the UK’s model of compact, green and sustainable cities - and the commercial opportunities that go with it; and boost efforts to attract Chinese investment into regeneration opportunities in the UK.
At the same time, China needs more innovation. Which plays to UK strengths in education, research and innovation.
So, in June, the Prime Minister launched a new UK-China Research and Innovation Partnership Fund. Over the next five years we will both invest £100 million to drive cutting edge research and innovation collaboration between our two countries.
And finally, our people to people links with China continue to flourish – presenting vast opportunities for us. As home to three of the world’s top ten universities, Chinese students consistently choose the UK, with over 100,000 of them currently undertaking Higher Education courses here.
And we welcome large numbers of Chinese tourists, after we simplified our visa processes. Last year we issued a record number of visitor visas, up nearly 40% on two years ago.
Of course, it is not all plain sailing – nothing in either business or diplomacy ever is. There are still issues around doing business in China. That is why it is important we remain open and continue to encourage China to improve the environment for foreign businesses operating there - by strengthening the rule of law, for example.
And China does value what we say. We see increased co-operation on global issues, including a groundbreaking joint statement on climate change at the Prime Minister’s Summit with Premier Li in June. Intellectual property is another area, with Baroness Neville-Rolfe leading a weighty delegation to China for UK-China Intellectual Property Symposium Week in September.
So, my message today is simple: China’s rise is a fact. Britain’s choice is clear - we see an historic opportunity for our mutual benefit. And the UK is well placed to seize it.
The Prime Minister has called our relationship with China a partnership for growth, reform and innovation.
And the success of this partnership is something for which we have all of your here to thank - for your vital efforts in helping to make that vision a reality.
So, I am confident that, with your support, we will go from strength to strength. And ensure that in - what many are calling the Asian Century - we will not only see the rise of China - but of Britain as well.