When the UK lowered the flag on its former colony of Hong Kong in 1997, China was still playing catch-up with other Asian economies. Today, China is second only to the US in economic might and the UK, along with every other country in the world, is keen to build closer ties.
Nevertheless, the strength of pro-China sentiment in yesterday’s speech by George Osborne, the UK Chancellor, might surprise those expecting a more measured tone, particularly given the numerous issues that divide China and its European trading partners.
The Telegraph for example, neatly summarized the overriding message behind the week-long visit of Osborne to China in an article titled “China buys up Britain as politics takes a back seat.”
And, indeed, Osborne’s speech was unashamedly an invitation for China to invest in the UK. He said:
Not every country in the world is happy to see foreign investment – including Chinese investment. Britain isn’t one of those countries. Indeed, I would go as far as to say that there is no country in the west that is more open to investment – especially from China. For your investment means jobs at home for us.”
Osborne said some nations wouldn’t want Chinese investment in critical infrastructure like water and airports. But the UK positively welcomes it. He mentioned China Investment Corporation, which owns a large share of the London water supply – and a share of Heathrow airport, and Beijing Construction and Engineering Group, which is to participate in a mega-contract for Manchester’s Airport City — see this post — which was unveiled on the eve of his China trip.
More controversially, Osborne talked up the merits of China’s hi-tech giant Huawei. He said:
There are some Western governments that have blocked Huawei from making investments. Not Britain. Quite the opposite. That is why I was pleased to welcome Huawei’s opening of a flagship office in our country in June, and of £1.3bn of investment that came with it.”
Huawei wasted no time in tweeting this unabashed piece of PR.
— Huawei Technologies (@Huawei) October 15, 2013
Osborne sees the hi-tech sector as one of the most exciting opportunities for collaboration between the UK and China, not least because it will help overcome the widely held perception in the UK that China’s principal attraction to western businesses is as a low-cost, low-quality manufacturing base.
We want to collaborate with China and Chinese businesses in areas like technology, bioscience, green energy and third generation nuclear power that are at the cutting edge of the world economy.
After having laid out the Welcome mat for firms leading the development of China’s new economy, Osborne then turned his attention to financial services with a bold initiative to make London a global trading hub for the Chinese currency and relax requirements for Chinese banks doing business in the City.