Britain is the largest European investor in the
People's Republic. A summit today will build on this vital relationship
Alistair Darling
The Times
May 11, 2009

Economic summits used to be the preserve of the
big Western economies and Japan. Not any more.
Today’s UK-China economic summit is important not
just to build on the good relations between our
two countries, but also because of China’s vital role on the world stage.

China is the world’s third largest economy. Some
estimate it could be the biggest before 2050. So
it is right that it should have a keen interest
in resolving today’s economic problems, as we
build towards global recovery. Today the second
UK-China Economic and Financial Dialogue will
take place, the first in London. Our talks will
strengthen the cultural and commercial
partnership between our economies: a partnership
everyone can see — on the shelves of our shops,
the screens of our cinemas or in the lecture
halls and laboratories of our universities.

We already have strong economic links. But we
must do more to seize the shared opportunities to
learn, trade and invest. Thousands of jobs, now
and in the future, depend on it.

Every country has benefited from China’s
integration into the world economy in the past
decade. Since 2000, China has accounted for a
third of global economic growth. Chinese goods
are now exported all over the globe — making it
the world’s second largest exporter. And this is
not a zero-sum game. We all benefit; 60 per cent
of Chinese exports are produced by enterprises financed by other countries.

But I believe Britain is uniquely placed to
benefit. The UK is the largest European investor
in China. Some 6,000 British-invested projects
there span the country in a number of sectors:
Vodafone in telecommunications, BP in energy,
AstraZeneca for pharmaceuticals, HSBC and
Standard Chartered in financial services, to name a few.

And the UK is the second top European destination
for Chinese inward investment. Nearly 400
companies have set up in our country, and more
than 60 are listed on our stock exchanges. They
offer high-skilled jobs in engineering, telecoms and financial services.

So it is not surprising that we also want to
better understand China. Nearly a million people
visited the British Museum’s Terracotta Army
exhibition last year. One in seven of our
secondary schools is providing Mandarin lessons.
London has taken on the Olympic torch from Beijing.

We have also built up a robust partnership in
further and higher education. The UK was the
first country to set up university campuses in
China. More than 80 British universities and
colleges have partnerships with Chinese
institutions. We are proud to have more than
60,000 students from mainland China at UK
institutions, more than from any other country.

There is a world of further opportunities for
both countries. As a place to do business,
China’s potential is enormous. It is the world's
largest market for internet and mobile telephony
— with almost one billion users. As a place to
learn, Britain offers expertise, advanced
technology and a world-class science base.

The meeting between our countries today is about
seizing these opportunities. But we meet against
the background of the greatest global financial
crisis for generations. Every country has been
affected. And every country is working to get
through this. So our first goal must be to agree
the action needed to support growth. Both our
governments have put more money into the economy
now, when it is needed. China’s huge fiscal stimulus will benefit us all.

It is also imperative that we take forward the
agreement reached at last month’s London summit.
Both our countries will make substantial
contributions to the trade finance initiatives
and commit resources to the IMF and the World
Bank, to lessen the impact of the crisis on
developing and emerging economies. We both
recognise that it is a moral imperative, as well
as in our economic interest, to act.

Our joint determination to respond to the
downturn must go hand in hand with efforts to
expand the many links between our economies. So
we must make progress in financial markets. We
have been working with China for some years to
help to develop its capital markets, in
particular for corporate bonds. Now we must
expand our programme of technical collaboration
and exchange — so that those in the financial
services industry, as well as regulators and
central bankers — can learn from each other.

Just as importantly, I want both our countries to
support more British businesses listing in
China’s stock markets, and Chinese businesses listing in the London Exchange.

Third, future prosperity must be environmentally
sustainable. China’s size and population presents
an obvious challenge of energy supply -- every
year it needs to add the equivalent of 130 per
cent of the UK’s total energy production. When it
comes to green technology and renewable energy,
we can offer a wealth of expertise.

So we will take forward our ideas to set up
collaborative green research projects. These will
promote learning and innovation at the business
and university level by working across borders and developing new technologies.

Finally, we must do more to enhance trade links.
We have a strong record of exporting services to
China, selling more than £1 billion a year in
their markets. But we must do more. That is why
we are working towards a bilateral trade target
of £60 billion by 2010. We want to move the focus
towards aerospace, environmental infrastructure,
biological technology, pharmaceuticals and
advanced manufacturing. And we must trade across
the whole of China — there are more than 250
cities there the size of Birmingham. The
potential for both nations is enormous. We must
seize the opportunities. Only by working together
will we be able to build a stronger future.

Alistair Darling is Chancellor of the Exchequer