15 April 2008
Comments by UK Chancellor of the Exchequer Alistair Darling MP at the joint press briefing after the China-UK Economic and Financial Dialogue meeting, 15 April 2008
1. We - Vice-Premier Wang Qishan and Chancellor Alistair Darling - met today for the inaugural China-UK Economic and Financial Dialogue, under the theme of “China-UK Economic and Financial Cooperation”. The formation of this dialogue was agreed by Premier Wen and Prime Minister Brown at their Summit in January, and demonstrates the importance both our countries place on our bilateral relationship. Our meeting was enriched by the participation of a range of stakeholders, including MOF, NDRC, MFA, MOFCOM, PBoC, CBRC, CIRC, CSRC for China, and DFID, BERR, FCO, Home Office, Bank of England and the Financial Services Authority for the UK.
2. Our discussions were founded in the shared belief that open markets and free trade lie at the heart of our economic prosperity, and are essential for sustainable economic development. But we noted that in some parts of the world, protectionist pressure is rising and this constitutes a threat we cannot afford to dismiss. In order to counter this pressure, we agreed the importance of our countries taking a constructive, positive role in this debate, and the need for us to demonstrate with actions our commitment to the multilateral, rules-based trading system and an open and transparent investment regime.
3. In this context, the two sides reaffirmed the importance of the new target for bilateral trade agreed by Premier Wen and Prime Minister Brown at the China-UK Summit in January 2008, under which the total value of trade in goods and services will reach USD 60 billion a year by 2010. Both sides will take steps to help businesses do more to achieve the target. I look forward to further discussions on these issues at the next meeting of the Joint Economic & Trade Committee. The UK is the second largest services exporter in the EU to China. UK exports of services to China are a particular strength – providing engineering and design consultancy to landmark projects such as the Olympic stadium and the new Beijing airport terminal.
4. Our belief in open markets and free trade is reflected in the UK’s openness to inward investment, including from sovereign wealth funds. The UK welcomes the creation of the Chinese sovereign wealth fund, and its potential for investing in our country. London attracts more Chinese inward investment than any other location in Europe. And there are now over 350 Chinese companies in the UK. Both countries recognise the importance of actively participating in the current discussions taking place in the international institutions on the issues between sovereign wealth funds and recipient countries to achieve better cooperation on a mutually open basis. We reaffirmed our commitment to achieving an ambitious, balanced, pro-development conclusion to the WTO Doha Development Round in 2008. The UK will organise an event on intellectual property rights in cooperation with the China Pharmaceutical Association.
5. Our exchange of analysis on prospects and risks for the global economy in the dialogue reinforced the importance of cooperation on a bilateral and multilateral basis to promote economic and financial stability. We both attach great importance to reform of the International Financial Institutions, and agreed that we would actively share our policy ideas in this area, for example on enhancing the Early Warning surveillance function of the IMF.
6. We believe that open, efficient, and transparent financial markets are essential for continued economic growth and development, and recognise the vast potential for China-UK cooperation in the financial sector. This was underlined by our discussions during the dialogue, where we had a fruitful exchange on financial stability and the policy reforms the UK is undertaking to enhance our regulatory framework. We discussed the UK’s policy experience in developing London and Edinburgh as world-class financial centres, highlighting aspects of the UK’s experience which could be relevant to China’s own significant efforts to develop its own financial sector and global centres. UK exports of insurance and other financial services alone to China grew by 69% during 2006. 72 companies from China have listed on the London Stock Exchange. We agreed a programme of practical China-UK financial services cooperation and exchange of expertise covering banking, capital markets, insurance and pensions, regulatory reform, and financial education and training. This cooperation will include fora and study visits, and involve public authorities and senior practitioners. The programme will start in June 2008, after coordination arrangements have been agreed on both sides.
7. Economic globalisation presents our countries with great opportunity, but also brings challenges which cooperation between our countries can help to address. The Joint Declaration on Climate Change signed in January 2008 signals the importance we attach to combating climate change and further strengthening bilateral cooperation in this field. We agreed that climate change is a pre-eminent economic challenge facing the world, and that economic policies, including carbon pricing and market-based instruments, have an important role to play in helping our countries mitigate our contribution to greenhouse gas emissions and adapt to climate change impacts. We agreed a programme of cooperative work to take forward the priority areas identified by the Working Group on Climate Change. This will include building capacity at provincial level, technology transfer, sharing of experience on carbon markets, and support to the work of the private sector.
8. Almost half the world’s Clean Development Mechanism projects are in China and the UK has, at 37%, a greater share of these than any other country. We confirmed our support for the multilateral development banks and other agencies, working within their comparative advantage, to support developing countries in combating climate change. In order to build on our shared understanding, we initiated a discussion on “Financing for Sustainable Development” as a potential new theme for the next three-year programme of the China-UK Sustainable Development Dialogue.
9. We believe that eradicating poverty and achieving the Millennium Development Goals is a pressing and urgent priority. On international development, we agreed further to strengthen our cooperation. We are committed to working together to achieve the Millennium Development Goals and make the UN high-level event on the MDGs in September a success.
10. Today’s dialogue reaffirmed the strength of the China-UK economic and financial ties, and the importance of these in our broader bilateral relationship. We agreed to meet again for the second round of the dialogue in the UK in 2009, and emphasised that our ongoing cooperation in the economic and financial spheres is, and will be, a truly collaborative relationship.