United Kingdom and China

Baroness Neville-Rolfe Excerpts

Thursday 7th November 2013 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, it is a great honour to address this House for the first time. It is perhaps unwise to take the plunge so early, but I could not resist the temptation of talking about China. This is a momentous occasion for me, so I would like to begin by saying thank you. First, I thank my noble friend Lord Dobbs for securing this timely debate and for his fascinating contribution. I have been given the warmest of welcomes by all Members and by the excellent House staff. They are courteous, they are helpful and they are always right. I especially enjoyed the wisdom of the finance department, which warned me to beware of advice from other Members on the sensitive subject of allowances. I thank my sponsors—my noble friend Lord Inglewood and the noble Baroness, Lady Hogg—and my former colleagues from the Civil Service and from Tesco. I congratulate my fellow juvenile, my noble friend Lord Whitby.

I was brought up on a Wiltshire farm, a small business which gave me a love of the countryside and some understanding of the difficulties of the sector. I went to Somerville, Oxford, like one of my inspirations, Lady Thatcher, and I am now an honorary fellow. In Whitehall, I had relatively little engagement with China, as it was yet to become the economic behemoth that it is now. However, in my 15 years at Tesco, China was one of our key growth markets and I visited it frequently.

China is an extraordinary country, as other noble Lords have said, which of course has the largest number of consumers in the world. It will comfortably meet its 7.5% growth target for 2013 and is expected to be the world’s biggest economy in under five years, with an enormous impact across the globe, as my noble friend Lord Howell of Guildford has shown.

I would like to give some brief reflections on what I have learnt about China as an executive at Tesco and former vice-chairman of the China-Britain Business Council. This unique body, now led by my noble friend Lord Sassoon, and so well supported by the Minister, celebrates its 60th year in 2014. The visit of the Prime Minister in 2010, which I was lucky enough to join, and the recent follow-up by the Chancellor have greatly helped to push things along in a favourable direction.

My first point is that UK and Chinese interests can be complementary and that trade is a natural area of collaboration. Even in the 19th century, companies such as HSBC and Jardines built up trading conglomerates and, indeed, cultural links that are still important today. We know from the 2011-2015 five-year plan that China is gradually trying to move its economy from investment to consumption. Its economy has been very unbalanced and, given our recent reliance on the service sector, it is a great opportunity to build lasting export links for British manufacturers.

The area I know is consumer goods, which is a good example. Chinese consumers are hungry for brands such as our own British success story, Burberry. There is a huge opportunity for some of our great shopkeepers, with Boots, Mothercare, B&Q, Paul Smith and Tesco all flying the flag there. I was also involved in seminars with MOFCOM, the Commerce Ministry, on the transfer of climate change-related innovation. China of course has a history of flooding and famine; pollution is evident in the orange skies above Beijing and other eastern cities. So there is a huge opportunity for exporting UK expertise on green building, pollution control and carbon-friendly refrigeration. Conversely, there is a wonderful opportunity for the Chinese to invest in the UK and I was gratified to see the announcements last month about Manchester Airport and Hinkley Point.

I have done business in many countries and I believe that Britain is the country that is now most open for business. For the overseas investor, it is easier to set up and get through the necessary red tape here than in pretty well any other country in the world. Traditionally, there have been visa impediments to Chinese investors and I am so glad to see that the Government are now tackling those. However, we should expect China to reciprocate and the Chinese to be equally welcoming. So far, this has not always been the case with proposed UK investments in China.

My second theme is: “Think local”. Working in Asia is very different from working in Europe and especially from working in America. Having a local Chinese partner makes a positive difference and I would recommend it. Thinking local is also important in another respect, because northern and southern China are very different, not least climatically. The goods you sell and the services you offer have to take account of these continental-style differences. China cannot be looked at through the prism of a homogenous nation. By thinking local, UK firms can build networks with local operations catering to specific local needs.

My final thought is about ambition. As the Chancellor said during his recent visit, there is an ambition in China and a surprising sense of optimism—similar, in a way, to Victorian Britain or 1890s New York. The ambition of the Beijing Olympics inspired us to do even better last summer. Britain excelled in Olympic sport and also, of course, in creativity, with the sheer entertainment value of those four extraordinary weeks.

While they have demonstrated some less attractive features, the Chinese have always shown great wisdom, not least with their treasure trove of proverbs. My noble friend Lord Dobbs quoted one:

“A journey of a thousand miles begins with a single step”.

A maiden speech is a perfect example.