I’m grateful to the China-Britain Business Council (CBBC) for organising this conference - and to you all for coming. The level of attendance here this morning clearly demonstrates the breadth and importance of the relationship between our two countries.
As the Prime Minister has said, China’s transformation is one of the defining features of our generation. We see this as an opportunity - not just for the UK, but for the world – and we want China to succeed in it. And I am pleased to say that China has made clear that it values its engagement with the UK as it makes this journey. Premier Li has described our relationship as indispensible for both countries.
I was privileged to join the Prime Minister on the hugely successful visit in December with our largest ever business delegation, including many of you in the audience here today. During the visit, I feel we entered a new, and mutually beneficial, phase in the UK-China relationship.
We have of course reflected internally on the Prime Minister’s visit. Personally, I was struck by the determination and creativity of our companies, large and small, who are working hard to succeed in the Chinese market. From the £4.5 billion Jaguar Land Rover announcement, which will help bring high quality jobs here at home; to the bold and innovative SMEs breaking down frontiers - such as Sweet Mandarin, which sells Chinese sauces, made in Birmingham, to the Chinese.
So I’m pleased to be here with you this morning, looking forward to what is sure to be an exciting new year, and to working closely with our partners at CBBC in 2014. Why? To help you, the businesses, on the front line, in making those deals happen.
I’d like to begin by underlining two key points.
First, that the UK and China are well matched as partners for growth.
And, secondly, that the Government – through the FCO and UKTI – is doing everything it can to make the most of that partnership.
Above all, this means that the Government is committed to connecting British expertise and advantage with China’s growing demands. There can be no one who is unaware of China’s astounding economic development over the past 30 years and the sheer scale of the opportunities this development presents.
One area where we can capitalise on these opportunities is in China’s transition to a consumer-driven economy.
The top 2% of China’s population accounts for a third of the world’s consumption of luxury goods and the number of Chinese households with disposable income is rising.
Here in Britain we have the right products and retail facilities to match that demand. London has been called the shopping capital of the world. British e-retailers export more than their European rivals put together. And the UK is home to some of the finest luxury brands. I was delighted that we put some of these companies in touch with Ali Baba out in China, which could transform their retail opportunities there.
Another area where Britain can offer expertise is in China’s growing need for housing and urban planning. The Chinese are urbanising at an extraordinary rate – building a city the size of Luton every week!
By 2025, China will have more than 200 cities with more than a million residents in each. China is also piloting low carbon cities and building 36 million affordable homes by 2015.
Being the second largest exporter of construction equipment in the world, and with world renowned architects, the UK is brilliantly placed to support and benefit from China’s rapid urbanisation.
But cities need more than construction equipment. Britain is leading the way in sustainable construction, Smart Cities and technology to help urban areas deal with the knock-on effects of pollution and a strain on food production.
Finally, there is no more powerful example of the fact that China is becoming a truly global economy than her plans to internationalise the renminbi.
When the Chancellor, George Osborne visited last year, our countries agreed to allow direct RMB-Sterling trading in Shanghai and offshore.
The London Stock Exchange welcomed its first Chinese member in 2011. Less than three years later, 51 Chinese companies are listed in London, with a combined value of £30 billion.
The United Kingdom is the easiest major European economy in which to set up and run a business. It is a gateway to the European market and has first class professional and financial services to help businesses looking to expand to the Continent. That’s why so many Chinese companies are choosing to set up their headquarters here.
As Counsellor Zhou from the Chinese Embassy described it, the UK is “the most open economy in the world”.
I’m not going to disagree with him. It’s something we are proud of.
And we are working hard to ensure this remains the case, by making Britain even more competitive: cutting corporation tax; reforming education; and tackling our budget deficit.
And it explains why the UK has become China’s first choice for investment in Europe. Chinese investment into our shores rose by a massive 80% from 2011-2012 – something I am sure Sir Andrew will elaborate on further.
As our economic links grow, so to do our political and cultural engagement. The two cannot be delinked. As the Prime Minister emphasised in China, the rule of law and political openness underpin a stable business environment and long term economic success.
And, as you all know, to do business together you need to understand each other. I’m therefore delighted that our cultural exchanges are developing, from the fantastic recent exhibition of Chinese masterpieces at the Victoria and Albert Museum, to the major upcoming show this Autumn at the British Museum, to Joey the Warhorse, who will soon be gracing China’s best theatres – an auspicious way to mark the Year of the Horse.
So the opportunities are there – on both sides. I hope that today’s conference will be a chance to explore and seize them.
But this is just the tip of the iceberg in terms of the invaluable services that CBBC has to offer British and Chinese businesses.
With their support, UK Trade and Investment reaches more than 13 cities across China – promoting Britain, providing advice and assistance and securing high value investment into the United Kingdom from abroad.
In fact, the whole outlook of our foreign policy has taken on an economic focus. UKTI is working with our diplomats in China – and in key markets across the world - to match Britain’s strengths with China’s needs in key sectors.
UK Trade and Investment is helping British companies access high value opportunities in the health, energy, airports and built environment sectors in China, the value of which goes into the £100’s of billions.
In the FCO, we’re seeking to expand wider links between our two countries, creating 60 new jobs in China; opening a new consulate in Wuhan; and training more diplomats in Mandarin.
And, as the United Kingdom becomes a top destination for Chinese tourists and Chinese students attracted by our unrivalled universities and colleges, we are committed to improving the visa process for Chinese visitors to the UK. A mobile service and joint Schengen application process will come online this year.
I hope you will agree that the Government’s commitment to building the UK-China relationship is stronger than ever. And this is, I believe, a sentiment shared by everyone in this room.
So we want to hear from you. UK and Chinese businesses are the ones out there making these partnerships a reality. You know what you need. Only you can tell us what works for you and what doesn’t. You know where the obstacles and challenges are on the ground. But, we stand ready to do whatever we can, to ensure that Britain’s trade and diplomatic relations with China continue to go from strength to strength.
Thank you very much.
Find out more about the China-Britain Business Council
Visit the UK and China website pages
Follow Foreign Office Minister Hugo Swire on twitter @HugoSwire
Follow the Foreign Office on twitter @foreignoffice
Follow the Foreign Office on facebook and Google+