Alas, we remain far too ignorant about the country, too often resorting to cliché
The visit of the Chinese prime minister, Li Keqiang, to London last week is the latest illustration of a huge shift that is taking place in Sino-British relations. On taking office, the Coalition government talked about the importance of emerging markets such as China but did little. Then David Cameron met the Dalai Lama in 2012 and the Chinese put us in the deep freeze for 18 months. But, to its great credit, once normal relations were resumed, the Government lost no time in seeking to place the relationship on a different footing. In Beijing last December, Cameron spoke of Britain and China becoming “great partners”.
A month ago, China overtook the US to become the largest economy in the world by one measure. By 2030 it is projected that the Chinese economy will be twice as large as America’s and larger than the European Union and America combined, accounting for one third of global GDP. This is the world that is coming into being, that we must learn to adapt to and thrive in. It is a far cry from the comfort zone we are used to, a globe dominated by the West and Japan: in the Seventies, between them they were responsible for two thirds of global GDP; by 2030 it will be a mere one third.
A trade-dependent island such as Britain must embrace the future, and it is abundantly clear that China is the future. Other European countries, notably Germany, have been quicker to recognise this. Last year our exports to China were worth $10.1 billion, compared with Germany’s $73.4 billion and France’s $19 billion. We have a lot of ground to make up. One problem is that Germany’s manufacturing is bigger and more competitive than ours and produces a range of products, from capital goods to motor cars, that the Chinese crave. But we are beginning to turn the corner; at last we seem to have the right mindset.
The latest slew of agreements shows what China has to offer. BP agreed a deal worth more than £5 billion to supply liquefied natural gas to China. British exports of lamb and beef to China will be resumed after the lifting of a 30-year ban after our BSE outbreak.
It is the infrastructure deals, though, that catch the eye. There is an obvious synergy. Like other Western nations, we are cash-poor and the Chinese are cash-rich and looking to invest. The Chinese, moreover, are the global experts on infrastructure; we have long neglected ours. Chinese financial involvement in the new $16 billion Hinkley Point C nuclear power station, and others to follow, makes total sense. Chinese participation in the development of our high-speed rail system would be a logical step.