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UK & China: Partners in Business - New Challenges and Opportunities

Rt. Hon. Lord Mandelson,  First Secretary of State, Secretary of State for Business, Innovation & Skills, Lord President of the Council
UK and China Business Summit, London,  27 February 2009

Your Excellency, Ladies and Gentlemen.

Premier Wen said that he wanted to send a buy mission to the UK to help promote British exports to China.

I’m very glad he has been true to his word and he has speedily sent you Minister Chen. This mission has been met by the biggest-ever business event to involve a Chinese delegation.

Generating Growth Now:

Over 150 Chinese companies and 500 British companies are today meeting, engaging and networking - a sort of “blind date exercise” - and I hope taking forward new contracts.

We have also produced a list of over 1,000 British companies ready to sell quality goods and services to China now.

We have met the Chinese aspirations. Over lunch, I handed over a memory stick containing this list of companies - an aide memoire - so that you, Minister can continue this important work with your staff.

I expect real business to flow.

Support from Government on both sides is essential to this. And I have spoken with Minister Chen about steps the Chinese can take to help make it happen.

In particular, I asked Minister Chen to assist in pushing for a change, for example, in Chinese law to allow UK Professional Institutions to register in China and do business there.

These organisations provide world-class practitioner-led qualifications and expertise that can help strengthen the skills of China’s workforce for global markets.

And alongside UK business expertise in hi-tech, high-value sectors - like, for example at companies such as Weir, a leading specialist in nuclear and advanced engineering that we were talking about over lunch - it can provide valuable knowledge and innovation to help China realise its economic ambitions for the future.

Growing trade and investment benefits both our countries. It is not simply for one side. Trade and investment are not zero-sum gains.

And this event is just the start of this process to generate longer-term growth. One that I want to see deliver substantial new business by the visit I will be undertaking in April to China - and beyond that into the future.

The Importance of Our Partnership:

The debate in Europe about China’s spectacular re-emergence over the past two decades has often been dominated by anxiety, especially about its growing industrial competitiveness.

But the global downturn brings a new reality into focus. China is a vital engine in the world economy and could account for over $2 trillion worth of global imports and exports in 2010.

Along with that of the other emerging economies, it is only China’s growth that will keep aggregate global growth from turning negative in 2009. Those who view growth with trepidation and anxiety should bear this in mind. As growth in the developed world goes into reverse, China is still projected to grow at 7 or 8%.

So for all the talk of decoupling between the developed and emerging economies over the last few years, the previous year has driven home just how coupled together we are and how indivisible our economic interests. The collapse in demand in western economies has had a serious impact in China’s own economy - no decoupling there.

Now and in the decades ahead, we are bound together.

UK and China working together:

The UK saw and argued for China’s inescapable importance very early-on. I had no hesitation in my previous role as the European Trade Commissioner to take on and strengthen this argument on Europe’s behalf.

You are our fastest growing major trading partner. UK-China trade has grown at double figure rates for most of a decade. In terms of value, British businesses are now the biggest European investors in China, with projects worth over $15 billion.

In January 2008, the British and Chinese Governments set a target of increasing bilateral trade by 50% in two years to a level of US$60 billion. The Prime Minister has also said we want 100 new Chinese companies investing in the UK by 2010 - next year. And to double UK exports to £10 billion.

These targets, despite all that is happening around us, still look realistic in my view. Even through 2008, as global growth began to slow UK exports of goods to China increased to £5 billion.

Chinese companies are choosing to invest and create jobs in the UK as part of the strategies for global expansion. Huawei, China Telecom and ZTE all have their European headquarters in the UK.

The UK is a springboard for these companies in this country, in Europe and internationally.

With 85 new Chinese companies locating in the UK since April 2007, we are on track to meet the inward investment target of 100 by 2010. We need a further last spurt.

And it is important action is taken today to grow this trade between us even further.

The Future:

Central to our work together in the decades ahead, will be the world’s shift to low carbon. Of the almost 1400 clean development mechanism projects approved in China, around a third already involve UK companies.

We believe this is a strong platform on which to build and help boost the flow of low-carbon investment to China.

And I welcome China’s application to join the World Trade Organisation’s Government Procurement Agreement. The UK is actively working with the European Commission to help progress China’s application, stressing the benefits this could bring to purchasing authorities and suppliers on both sides.

We stand or fall together. And today’s event is about securing the new business partnerships that will help forge the ideas, research and technologies, which are so essential to generate jobs, skills and long-term prosperity across our economies.

We need each other. We need each other more than we have ever done before.

The way we know each other, our companies know each other, is a strong platform for future collaboration.

I look forward to celebrating and building on this collaboration not only in April, but in the months and years to follow. Thank you.