Emerging Economies

Debate between Tobias Ellwood and Jeremy Browne

Monday 14th June 2010 Commons Chamber

[Mr Browne]

My hon. Friend makes a very good point. Huge levels of growth, by European standards, are necessary to take the Chinese economy forward and to realise the aspirations of an enormous population, hundreds of millions of whom still live in absolute, as well as relative, poverty.

It is easy to characterise these debates as being about China, India, Brazil and other countries with large populations, but there are also regions, particularly in Asia, that are developing at a fast rate. The Association of Southeast Asian Nations countries—the south-east Asian bloc—have, between them, a larger population than that of the European Union. Over the past decade, they have had an annual growth rate of 5.7%— not as high that of as China, but still very high by European standards, albeit having started from a much lower base. If we think of groups of countries that are increasingly willing and enthusiastic about the prospect of working together as single blocs in that way, their relevance will be obviously apparent to everyone in this House.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

My hon. Friend mentions China and the huge steps forward that it has taken in its growing economy. Its gross domestic product now stands at about 9.5% or 9.6%—growth that compares quite favourably with ours. Is it therefore right that we continue to provide that country with Department for International Development funds to the tune of—I may stand corrected—about £30 million a year?

[Mr Browne]

An interesting evolution in the power balance in the world is taking place, with these huge emerging countries. Although China’s GDP is slightly greater than ours, it is worth reminding ourselves that their population is 25 times higher, so their GDP per capita is very much smaller than ours. Hundreds of millions of people in China have yet to benefit from the huge advances that that country has made over the past decade or two. At the moment, we have this slightly strange situation whereby many of the emerging economies are the new powerhouses and yet still have millions of people living in absolute poverty. I think that there will be an evolutionary period in which they are apparently two slightly contradictory things simultaneously: they will require aid and assistance while becoming increasingly significant economic and political players. Over time, that balance needs to be reflected in the contributions that we make in aid.

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[Mr Browne]

I strongly agree with my hon. Friend. It is notable that, in many international companies and other organisations in which the management and the work force are drawn from right around the world, talent has become a global phenomenon. Many talented Chinese, Indian, Brazilian and other people work in London and throughout the United Kingdom and contribute to companies with British leadership and to the prosperity of our country.

[Mr Ellwood]

My hon. Friend mentions the importance of the movement of people with regard to China. Does he know that France and Germany attract around 500,000 visitors every year? I am afraid that we compare badly, attracting only 100,000. That is because it is far simpler for the Chinese to apply for the Schengen visa, which gives them much greater access to Europe. They are deterred from coming here because of the complexities and the distance that they must travel to get a visa. Would my hon. Friend consider Schengen plus, which would allow a bolt-on to the Schengen visa system to allow Chinese visitors to come to the UK?

[Mr Browne]

That is a matter that I may wish to bring to the attention of Home Office colleagues. I am sure that they will take my hon. Friend’s wider point seriously, and I want to deal with it in the remainder of my speech. It relates to the importance of not just Government-to-Government or even business-to-business relations, but of engaging on a person-to-person basis with many countries.

The economic shifts that we are witnessing are no less significant politically. I have already said that after the second world war we had a political settlement, which was essentially the cold war settlement based on Europe and north America. That is emphatically no longer the case. Of course, we must be careful about getting ahead of ourselves. The United States is still the dominant power in the world and likely to remain so for a considerable time. Gross domestic product per capita in the EU is still vastly higher than in China or India. However, the direction of travel is obvious.

Britain can and should be confident in our ability to succeed in the new order. We remain a respected global player. We are at the core of international decision making: we are a major player in the EU, the Commonwealth, the United Nations and NATO. We have a network of diplomatic and other missions that reaches into every corner of the globe, while maintaining the ability to exercise hard power when necessary.

Along with Britain's economic and political assets, our so-called soft power can also play an important role in ensuring that we retain our influence and prosperity in future. We are globally influential in subjects ranging from architecture to science and popular culture. We have global sporting connections, including the world’s most followed football league. The UK will be at the centre of world sport when the Olympics come to London in 2012 and the Commonwealth games to Glasgow in 2014. We have a unique asset in the BBC World Service, while the British Council connects millions across the globe to Britain’s culture and education.

The changing world order should not be seen just in terms of a GDP league table. As important, if we are to win the debate on important matters such as climate change and human rights, is our ability to lead on ideas. Just as we must lead in that competition of ideas, we must likewise provide leadership in the debate on fundamental values.

I have spoken in meetings with Foreign Ministers from around the world about not only our economic interests but the balance between the role of the state and the individual, and argued that economic growth was not the only measure of human well-being, but that civil rights were central, too.