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Joint Economic Trade Committee (JETC) presentation

The Rt. Hon. Alistair Darling MP,  Former Secretary of State for Trade and Industry
Beijing,  27 November 2006

Pleased to be in Beijing today to co-chair the Sixth Meeting of the China-UK Joint Economic Trade Commission.

This is my first trip to China as Secretary of State for Trade and Industry.

During my visit I look forward to many productive discussions and the opportunity to drive forward UK/China collaboration in fields such as Intellectual Property Rights protection and innovation.

Our economic and trade relations have continued to deepen since the last JETC took place in November 2005 during the State Visit of President Hu Jintao.

In 2005, UK exports to China grew by 24% over the 2004 figure, with total UK-China bilateral trade – goods and services, exports and imports – reaching 32 billion US dollars by the end of last year.

Figures just released for January – September 2006 show that the UK has already exported £2.373 billion of goods to China – more than the figure for 2004 [£2.372 billion].

Indeed it looks certain that we will reach Premier Wen’s target of $40 billion well before 2010.I suggest that we should consider setting a new more stretching goal in time for the next UK/China summit.

In addition, the UK remains the largest cumulative EU investor in China with more than 5,235 projects to date, and I’m also delighted to see that there are now over 400 Chinese and HK companies investing in the UK.

We look forward to welcoming more investment from – and R&D collaboration with – China in the future.

We strongly encourage Chinese companies to consider the UK as their European base when setting up R&D centres and research type enterprises.

In addition to increasing trade, we are also developing ever-stronger government-to-government links.

For example, last month, Chairman Jia [pronounced Jar] visited the UK, where he set out his vision for the future of UK-China trade.

He highlighted five steps that our two countries could take in order to take full advantage of the opportunity that China’s growth presents:

developing our co-operation in science and technology based sectors such as energy, biotechnology and ICT;

increasing mutual investment; promoting co-operation between Small/Medium Enterpises;

working to promote trade liberalisation

and finally enhancing co-operation in hosting the Olympic Games.

These themes deserve further exploration, and I hope to explore many of these during my visit.

I would like to focus on one of these themes in greater detail here – that of investment.

Minister Bo, you took part in the Central China Business Summit in Changsha in September, where foreign investors were encouraged to look at opportunities now emerging in Central China.

These are exactly the kinds of exciting new opportunities that UK investors should be exploring.

I hope we will see increasing numbers of UK companies investing in Central and Western China in the near future.

However, in order to encourage UK companies to take full advantage of these opportunities they need to be presented with a fair and transparent playing field.

In this regard, I was pleased to hear Chairman Jia’s assurance that China would take more effective steps to protect the Intellectual Property Rights of UK companies, and further open its services market in order to promote bilateral co-operation in the sector.

These are exactly the steps that China needs to take in order to encourage more high quality UK investment.

China has now reached a point in its development where it can and should fulfils its WTO obligations, trades fairly, opens its markets and does not discriminate against foreign companies.

China is playing an ever more important role on the world economic stage and has made significant steps towards building a market economy. And moves such as improving IPR protection, creating a fair and competitive market environment and increased opening of the services sector all serve to take China further down this road.

This is why we have been – and will continue to be – the leading EU proponent for granting China Market Economy Status as quickly as possible.

However, protectionist pressures within the EU – and indeed the UK – are growing. Against this background, the UK is clear that ensuring a successful resumption and completion of the Doha Development round negotiations is critical.

We cannot let this historic opportunity to make global trade rules more free and fair, and enable trade to stimulate growth slip away. Globalisation needs champions, statesmen and women, and business leaders speaking together, to challenge the descent into protectionism.

That’s why while we welcome China’s call for a resumption of the talks, we encourage you to take leadership as well.

Moving on to probably the greatest threat the world faces this century – climate change. The review undertaken by Sir Nicholas Stern and , published by UK Treasury last month, leads to a simple conclusion – the benefits of strong and early action far outweigh the economic costs of not acting.

The steps we take to reduce emissions in the next ten to twenty years will have a profound effect on the future of the planet. Meeting this challenge will require innovative new approaches and the development of low-carbon energy technologies.

The challenges of energy and the environment are challenges both our countries are serious about tackling and we need to work together to achieve our goals.

Projects such as Dongtan Eco-City are examples of how UK and Chinese businesses are setting the scene for low-carbon city living in the twenty-first century. And I’m sure meeting the challenges of climate change will present us with many future opportunities for collaboration.

Another area where there is great scope for collaboration is on financial services – a key theme of my visit. Tomorrow, I will be launching a UK-China initiative on managing trading risk.

This initiative will provide an opportunity to consider ways of developing China’s market regulation and to look at ways of using UK standards, methods and institutions to mitigate risk.

China has identified the need for the successful development of its financial services sector as essential in order to achieve its broader political, social and economic goals, and we are impressed by the way China is implementing its WTO commitments.

China is keen to draw on international best practice to draft sound financial policies, establish a rigorous regulatory environment and bring Chinese legislation up to the norms expected by the international business community.

As the risk management initiative demonstrates, the UK is well placed to help China achieve this goal. The City of London is the world’s leading financial and business services centre and provides an excellent model for China’s reforms in this sector – a model which I understand the City of Shanghai is following in its plans to become one of Asia’s top financial centres.

Since its establishment in 1996, the Joint Economic Trade Commission has provided an excellent platform for extending China-UK economic and trade co-operation. During this past year, we have also re-invigorated the Trade Policy Dialogue, providing an opportunity to discuss in depth trade policy matters of mutual concern.

The working groups that report to the JETC – chemicals, construction, water, aviation and automotive, have been invaluable in bringing together business from our two countries and enabling them to identify issues of mutual concern through seminars, inward and outward visits and exchanges.

Let us take this opportunity to deepen and extend our economic and trade co-operation still further.