United Kingdom and China

Lord Clement-Jones Excerpts

Thursday 7th November 2013 Lords Chamber

[Lord Clement-Jones (LD)]

My Lords, I first declare my interests as deputy chair of the All-Party China Group, a partner of DLA Piper and chair of its China desk, a former member of Huawei’s international advisory council and a council member of UCL. It is with great pleasure that I follow the noble Baroness, Lady Warwick, as I agree almost entirely with her comments, derived from her expert knowledge of the higher education sector.

I warmly congratulate the noble Lord, Lord Dobbs, on initiating this debate. He set out the issues extremely well. I look forward to hearing our two maiden speakers later in the debate. I also look forward to the winding-up speech of my noble friend Lord Green who has been such a great champion of trade with China during his time as Trade Minister. We will be sad to see him go.

This debate is extremely timely. We have the opening of the EU-China trade negotiations on 21 November; on Friday we have the very significant opening of the third plenum in China; it comes in the aftermath of a whole series of official visits last month, including the so-called “yin and yang” Boris and Osborne visits and we have the visit of the Prime Minister later on this year or at the beginning of the next. It is noticeable that, despite the hitherto frosty relations with the new Chinese leadership in the 18 months running up to those ministerial visits, major inward Chinese investment has been at record levels over the past year. We are now the top European destination for Chinese inward investment and the noble Lord, Lord Dobbs, mentioned a number of those very significant inward investment levels. In that period, record levels of trade have also been set between China and the UK: in April this year, Britain’s monthly exports to China hit the £1 billion level for the first time. As we heard from the noble Lord, Lord Dobbs, we also have an agreement on renminbi trading in London, which will be of considerable significance.

I have made 30 or so visits to mainland China over the years. Having accompanied my noble friend Lord Sassoon, the new chairman of the CBBC, in his recent handover visit in September and taken part, last month, in a visit to Shanghai by the China All-Party Group, I am absolutely convinced that the prospects for trade and investment both ways between China and the UK are now better than they have ever been. This partly derives from the Chinese Government’s 12th five-year plan which involves a comprehensive strategy towards a more consumer-led economy: a more environmental and energy-conscious economy where the services—insurance, pensions, health and education—and the private sector become much more important, especially with China’s rising middle class.

This is, of course, not to say that China does not have major challenges to overcome, which all impact on the overriding Chinese public policy: the need for stability. The noble Lord, Lord Dobbs, set all these out extremely well. However, both the plan and the challenges give us substantial opportunities here in the UK. The all-party group visit last month gave me considerable reason to believe that we can take advantage of some of the welcome new initiatives such as the Shanghai pilot free trade zone and the Qianhai special economic zone, particularly in the provision of professional, financial and consulting services.

We also have a great deal to contribute in our creative industries. As we know, Britain has a great reputation—particularly following last year’s Olympics—in architecture, design, fashion, film, animation, games, television, advertising, publishing and music. We have a great opportunity for creative and artistic partnership between China and the UK, typified by the success of Thomas Heatherwick’s UK pavilion at the Shanghai Expo in 2010. In the automotive field, brands such as Jaguar and Bentley are experiencing record success. In fact, JLR’s sales in China are now higher than they are in the UK. China is leapfrogging the West in many areas of environmental sustainability. Its need for green growth provides an important market for UK goods and services.

In all this, as the all-party group heard from a whole variety of successful and well established British companies in Shanghai, we need to stay ahead of the game if we wish to compete effectively in China. China is increasingly moving from licensing western intellectual property, know-how and technology to developing its own, so British companies need to keep innovating to stay successful. We also need to focus on those areas where we can demonstrate efficiencies and better use of resources. However, for our trade and investment to keep forging ahead, we need SMEs to have greater self-confidence in entering the Chinese market. We really do need to get this message home to UK SMEs and help them with expert advisory services through UKTI, chambers of commerce and trade bodies and, especially, through local authorities. There is no doubt, for instance, that setting up close twinning relationships between Chinese and UK towns and cities can be of great benefit to business, if done in the right way. I am currently reading an interesting study, recently published by Carl-Johan Carlstedt and Christopher Georgiou on twinning opportunities, which will work if we get the structures of our local government right. However, there is often an imbalance between the Chinese and UK twinning partners. Consider the different population sizes of Shanghai and Liverpool. Whether we have local enterprise partnerships or some of the new initiatives that are being taken, we need to make sure that our structures are suitably matched when we are twinning with Chinese cities.

Quite apart from the value in itself of building bridges, we need to build bridges in areas such as education and tourism. We need visitors to this country to experience what Britain is like, which will help them to create those links that are often of great benefit for business. I am thinking in particular of the alumni programmes that some of our universities are putting in place with Chinese students, whether as undergraduates or postgraduates.

That brings me finally to the question of visas, mentioned by the noble Baroness, Lady Warwick. We need to get our visa regime right. We need to give out the right signals to Chinese students by excluding them from the migration figures. I have no doubt that during the course of this debate we will hear further on that subject.