United Kingdom and China

Lord Kirkham Excerpts

Thursday 7th November 2013 Lords Chamber

[Lord Kirkham (Con)]

My Lords, most of us as consumers or indeed as retailers—a job which I have been doing for over 45 years—have benefited massively from the awesome Chinese economic miracle. The world economy is underpinned by low-cost, high-quality, great-value goods made in China, from kids’ toys to sex toys, from machine tools to motor cars, including 90% of the world’s personal computers, 50% of the world’s ships and 70% of the cell phones. We in the West comfort ourselves with the thought that it is all due to the Far East’s “low-cost” economy, but I venture to suggest that this is not entirely true. I say that not from knowledge derived from reading books, academic research, trawling the internet or taking a brief for this debate but rather from direct, on-the-ground personal experience of transacting business with Chinese companies since 2000. From that I can tell you without caveat or reservation that China is a massively innovative society with a truly phenomenal work ethic, an absolutely determined “can do and will do” attitude and culture and a real commitment to self-improvement.

China’s ascendancy in the global economy is no fluke. When upwardly mobile Chinese acquire surplus renminbi, their first thought is not to study brochures for foreign holidays or flash cars—although China is the biggest and fastest-growing new car market in the world, with almost 20 million vehicles sold last year—no, their priority is to invest in their children's education. That is a bit of good news for us here in the UK because we host around 120,000 or 130,000 fee-paying Chinese students in our colleges. If we did not play so hard to get or make it so hard to get here, there might be even more Chinese participating in that part of our knowledge economy.

The China to which I was introduced a short time ago at the turn of the millennium has entirely vanished. It did so in just 10 years—although we are talking 10 Chinese years, which seems equivalent to about 100 years of development anywhere else on the planet. New China is on track to be the world’s largest economy very soon. The country has evolved at an incredible pace, segueing seamlessly into “brand China”. In 2008, “brand China” gave us the world's biggest and best Olympic Games, arguably until 2012, with its iconic and undeniably brilliant Bird’s Nest stadium and a phenomenal, never-to-be-forgotten opening ceremony. This was a “set the bar” launch advertisement for the brand.

With construction everywhere, China has developed. Just look at the city of Shanghai with its 24 million inhabitants. It has been developed into the Paris of the East: fashionable, stylish, exotic and exciting with its fine stores, restaurants, hotels, houses and apartments. That tremendous civilised backdrop is conducive to networking and transacting business, which is the lifeblood of China. It seems odd and sad that it takes a visit to a nominally communist country to see old-fashioned enterprise in action, enterprise that, through its unstinting investment in infrastructure, has provided tens of thousands of kilometres of highways and expressways and its own high-speed rail network, to support, facilitate and power China's stellar growth. The Beijing to Guangzhou high-speed rail line is the world's longest high-speed line at 2,300 kilometres. It was built in only seven years.

On the topic of railways, when I visited China recently, I was taking the incredible maglev train—that is the magnetic levitation train, no clickety-click metal rails there—from Pudong airport to Shanghai, an eight-minute journey reaching an incredible 431 kilometres per hour. That is around 260 miles per hour. Be assured it was not just low-cost labour that built that space-age mode of transport. It was a real commitment to innovation and the guts to give it a go. It is worth comparing and contrasting that with the umpteen years it has taken us to upgrade our west coast line to achieve half that speed.

China is an unstoppable good news phenomenon: a sophisticated, global-scale investor, exporter, importer and manufacturer of nano-tech, high-tech, low-tech, no-tech, cutting edge mega-demand products. From eyewear to iPhones, China is the class act powering the world's consumerism. In the UK we need to try better to understand the re-emerging—or re-emerged—power that is China, whatever it takes us to do so. We have got to become closer to the world's fastest growing major economy. We must actively and unashamedly encourage Chinese investment, investors, consumers and tourists, welcoming them with open arms. We must make the UK a ravishingly attractive destination, dismantling without delay every conceivable, perceived or real barrier and hurdle to transacting business. We must strengthen established ties and forge the strongest possible trade links. We must act like a friend. Indeed, we must be a friend. Let us not—even remotely—be tentative and ambiguous about it.

We are a trading nation open for business, and the modern-ancient civilisation that is China can make or break us. China's future mega-growth and success will of course create frustrations, stresses and strains, hiccups and bubbles, upsets and challenges. It is already happening. However, be assured that China's global business and influence is only going one way in the long term, and that is up. That is going to present boundless trade and business opportunities impossible to overstate. We in the UK need to ensure that we are at the party and on the top table, sharing in the fun of success with this ambitious, determined and booming country that dominates global manufacturing, is on the lookout for safe investment, and has an enormous and growing domestic market for goods and services.

A spokesman on China Central Television recently suggested that the UK needs China more than China needs the UK. The colloquial term “no-brainer” comes to mind. Almost every country in the world is courting the Chinese in the hope that it will become China's new best friend, the first choice as a business partner and a place to invest. It is imperative for the future prosperity of the UK that we treat this challenge with the same seriousness that we take participation in the Olympics, and ensure that we come first to mind as the natural business, trading and investment partner for our good friends in the East. We have some catching up to do.