Sir David Brewer, Professor Fan Gang, Professor Li Shirong, Sun Ming, distinguished ladies and gentlemen.
It gives me great pleasure to visit Shanghai again, following my last visit in May 2008.
This global city embodies China’s profound economic transformation. The fruits of China’s efforts to open itself up to the world are visible everywhere in Shanghai - from the large number of multinational companies represented here, to the rich array of architectural styles evident on the streets.
Today, Shanghai is flourishing as a global centre of commerce and a hub for business and finance.
So it seems particularly appropriate that the World Expo is being held in this truly international City. And I am delighted that the United Kingdom is playing such a prominent role, with its imaginative pavilion.
A new UK-China relationship
It is a testament to the British Government’s desire to strengthen the friendship - economic, cultural and social - that exists between our two countries.
Indeed, our Prime Minister, David Cameron, has made it his personal mission to renew these bonds and he will be visiting China in November.
Our pavilion is also a central part of UK Trade & Investment’s work in China this year with the China-Britain Business Council, its partner for mainland markets. Their activities will include 150 Expo-related business events, helping to highlight the UK’s sectors of strength, creativity and innovation.
In today’s interconnected world, where technology allows companies in distant continents to do business in seconds, the challenges we face are global and we must solve them together.
But this new global age also heralds tremendous new opportunities. And if we collaborate and co-operate, we can secure these benefits for our countries.
Earlier today, I visited several joint projects being undertaken by British and Chinese companies that will generate new business opportunities, and help our economies grow. I hope many more partnerships will flourish in the future.
I hope, too, that many more Chinese businesses and investors will base themselves in the UK. We are, I believe, the obvious choice.
We have a skilled and multi-lingual workforce; a working day spanning office hours in Asia and North America; and we own the international language of business. The UK is the ideal gateway to Europe and a springboard to the rest of the world. This openness will be a crucial advantage to Chinese businesses looking to capitalise on the new opportunities created by globalisation.
It’s worth remembering that, as work by the OECD has recently shown, China was the world’s dominant economic power for centuries before the West’s industrial revolution. So it is not emerging, but re-emerging.
We understand the challenges China faces as it seeks continued and stable economic growth.
But as ‘Partners for Growth’ - looking to the future and not to the past - we ask China to persevere in its efforts to provide a conducive business environment for foreign companies, one that will attract the foreign trade, investment, high-tech and expertise that China seeks to further its economic transformation.
We also ask China to help us to champion its own efforts to combat the rise of protectionism elsewhere. Measures that demonstrate China’s own commitment to that agenda would boost foreign business confidence here in China and in global trade fora alike.
Of course British business is already here in force in China - we are, jointly with Germany, the biggest investor in China and cumulative UK investment in China is over US$16billion in over 4,500 projects. British firms are already forming a key link in the supply chain in Chinese industry - in automotive, aerospace, ICT and chemicals.
But If China can take further steps to attract foreign trade and investment the UK also has much more to offer. British businesses can supply competitive goods and services, and expertise in sustainably managing the built and natural environments.
The economic ties being forged across a wide range of sectors are already delivering substantial mutual benefits.
Bilateral trade relationship
Total trade between the UK and China grew substantially in the years before the global financial crisis struck - rising by $9 billion in 2008 to $59 billion. Bilateral trade was worth just over $14 billion in the first three months of 2010, suggesting a healthy resumption of trade as we leave the recession behind.
In Britain we value our historic partnership with China, which continues to thrive. UK exports grew by 40% in 2008 - even in 2009 they grew by 3% - and there are encouraging signs this strong growth is resuming as the world economy recovers - UK exports were up by 45.3% in the first six months of 2010.
Similarly, imports from China rose by almost 19% in the first six months of this year. And many Chinese companies are taking advantage of opportunities in the UK, which is now second only to Germany as the investment destination of choice in Europe.
Market leaders in the telecoms and electronics sectors are among the many that have spotted the potential of investing in the UK.
Hai’er, the second largest white goods manufacturer in the world, has set up a company in Surrey to market and sell its products; while China Mobile has headquartered its Europe, Middle East and Africa (EMEA) operation in Britain. Equally, British firms such as BT and Cable and Wireless are spotting market openings in China.
But many more need to follow suit. China is the leading export market for Britain outside the US and the EU27 - but it still only accounts for 2% of our total exports. We need to up our game but we also need China to redouble its efforts to provide a conducive business environment, especially in sectors where foreign businesses and media have indicated a decline in business confidence.
After all, China was one of the few economies that battled back from recession quickly during the downturn and has emerged strongly, growing by an impressive 8.7% last year. The International Monetary Fund estimates growth of 10% in 2010.
As this expansion happens, British companies have a huge amount of expertise to offer, in everything from financial and professional services to cutting-edge low carbon technologies. We urge China to help unleash the potential that such companies can offer by providing a more conducive business environment.
Household names in finance like Standard Chartered, HSBC and Barclays are already well represented in China; while more recent arrivals like insurance firm Hengan Standard Life are making their mark. British law firms are active here and the UK has more fund management companies operating in China than other European country.
The Lord Mayor of the City of London is visiting Beijing right now, accompanied by a delegation of senior business representatives, and he will be coming to Shanghai on Thursday to participate in the UK-China Financial and Professional Services Week. It is a sign of how important the Chinese market is for UK finance firms.
In the low carbon industries, too, the UK can support the necessary transition towards a greener economy. We have established ourselves as a leader in green technologies and products in recent years. British research and innovation is helping cut carbon emissions, increase efficiency and boost economic growth.
Our companies can provide everything from specialist consultancy in carbon measurement and capture, to sustainable construction and low-carbon manufacturing solutions.
That’s why UK Trade and Investment is running a campaign in China to showcase British low carbon know-how.
More generally, UKTI has collaborated extensively with the China-Britain Business Council to increase awareness among UK businesses of the opportunities in China. They have emphasised the openings that exist beyond well-known commercial centres, such as Shanghai, in the many burgeoning regional cities.
We recognise that the Chinese Government is embarking upon ambitious investment programmes, designed to expand and diversify the economy and meet the rising aspirations of the growing population. We stand ready to work in partnership with you.
Britain is particularly well placed to provide China with the knowledge, skills and new technologies crucial for economic growth. We offer a world-class services sector; innovative high-tech industries that lead the world in frontier technologies; and globally renowned universities undertaking ground-breaking research.
Now is the time for China and the UK to work together to ensure favourable global trade and domestic business environments. Now is the time for us to work together, as ‘partners for growth,’ to increase bilateral trade and investment.
That is a stable foundation on which to build an even stronger, more balanced and more open trading relationship. So I look forward to doing business together to create jobs and prosperity in both our countries.