Treasury forges links with China

Paul Boateng, the Chief Secretary to the Treasury this week jointly chaired the UK-China Finance Dialogue, designed to extend and deepen the “comprehensive and strategic partnership” between the UK and China.

The dialogue covered UK and Chinese macroeconomic developments, industrial restructuring in a globalised economy; G7 and G8 co-operation, and financial reform. It also covered the need to promote enterprise and increase investment in science and innovation, to ensure that both nations and their citizens are equipped to cope with the challenges of greater global competition and the pace of technological change.

Paul Boateng and senior representatives from the UK financial services sector participated in a roundtable with counterparts from the Chinese banking sector. They discussed a broad range of issues, covering in particular financial market liberalisation and the mutual benefit to the UK and China of closer co-operation. Paul Boateng offered UK expertise in aiding the ongoing financial reform programme in China, an offer which was warmly received.

The meeting comes after the Pre-Budget Report produced a detailed analysis of the long term economic challenges and opportunities facing the UK, including the growth of China as a major economic power, with the Chancellor saying:

“By 2015 Asia will be responsible for as much as 25 per cent of world trade. Yet only 1 per cent of British exports go to China and just 1 per cent to India. So having set an objective to build trade links with Asia that match those in Europe and America, we propose that the China-UK Financial Dialogue now expand its role with enhanced private sector participation.”

Mr Boateng held a number of bilateral meetings including with the Finance Minister, the Governor of the People’s Bank of China, the senior Vice Minister at the National Development and Reform Commission (NDRC), and the Chairman of the China Banking Regulatory Commission.

Mr Boateng said:

“The emergence of China as a modern economic powerhouse is having a major impact on world markets, and this is set to increase.

We know that a more open and prosperous China will be to the benefit of us all – and we welcome this opportunity to strengthen the economic ties between our countries, and to develop stronger links between our Governments, and also between our businesses and our citizens.”

Notes to editors

1. HM Treasury has a Financial Dialogue with the Chinese Ministry of Finance which provides for government-to-government talks every 18 months. Starting in London in 1998 it has proved an important vehicle to strengthen economic ties between China and the UK.

2. China is now the 6th largest economy in the world – or the 2nd largest in purchasing power parity terms. In 2001, 2002 and 2003, China contributed more to global GDP growth in real terms than the whole of the G7 put together.

3. The UK is the EU’s top investor in China and China’s third largest trading partner in the EU. Bilateral trade is growing and includes significant contracts for BP, Shell, Rolls Royce and in the areas of telecommunications. Co-operation on international issues such as climate change and proliferation is expanding.

4. The UK remains the first choice destination for Chinese students, of whom there re over 50,000 in the UK.

5. The Chinese government is particularly interested on engaging with the UK on economic and financial sector reform. These are central priorities for a new generation of leaders and a recognised area of UK expertise.

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