Skip to main content

After a year in which there were precious few high level political visits, China got two in the same week: the UK Chancellor George Osborne and the Mayor of London Boris Johnson. The irritation at David Cameron and Nick Clegg’s very public meeting with the Dalai Lama last year has now been replaced by an era of warmth and mutual understanding. That, at least, is what the press releases for these visits will have us believe.

In fact, while the ministerial freeze has been on, the UK has been doing fine – having more than double the Chinese investment of any other EU member, and increasing its exports to China. Chinese visitors to the UK brought in £300 million last year – a formidable achievement in view of the highly unwelcoming visa regime the UK currently has towards people from China (something George Osborne promised to reform while in Beijing).

The UK and China are always keen to assert differences, but at heart they are pragmatic nations. They are both utterly at one in seeking growth, and they see in each other compatibilities that can be benignly exploited. For the Chinese, there are decent assets in the UK in the energy and manufacturing sector that are very reasonably priced, and which exist in one of the most liberal investment regimes in the world. For the UK, China is a vast market that its companies, small and large, need to conquer. Any tactical advantage in this battle for access is good in view of the competition that is going to come from other international companies, but also players inside China that want to find their way to the hearts of Chinese consumers. The next decades look set to belong to these consumers. The long term theme of Johnson and Osborne’s separate visits is getting as close as possible to these new actors in global growth.

Overcoming hurdles
Boris Johnson and George Osborne are unlikely to be publicly explicit about the challenges that British trade interests face in China, but in private meetings they have to be raised. The first is that China is becoming a master of indirect protectionism, and the treatment being given to companies ranging from GlaxoSmithKline down to small consultancies is getting harsh. The UK has a strong interest in the success of the EU in negotiating better trade access, from the right for companies to bid for government procurement in China to the perennial problems of state subsidies for Chinese companies and intellectual property rights protection. It is important to find smart ways to leverage the newfound interest China has in deploying its capital abroad, to give UK companies better deals in China. This has to be subtle work, but the primary interests in the UK are the same as our EU partners – having a liberal, rule-based, global order where China is far more integrated.

There are also some domestic issues. Large trade missions to China have been happening since the reign of George III. Lord Heseltine led a vast army of companies in the 1990s to Beijing. Trade missions have become an unquestionable part of the whole performance of UK politicians going to China. But just how much these achieve is debatable. A decade ago, in The China Dream, Joe Studwell poured cold water on some of the noisier delegations and what real business they did. Perhaps it is time for the UK government to give more support for small and medium businesses. Many of them will have to think about a China strategy if they are not already there, and will face a tough and time consuming task in making inroads in China. Some solidarity amongst them and with the government would be a big advantage.

This impacts on the delicate business of how the UK undertakes its business and political relations with China in the first place. China is now the world’s second largest economy on some measures, and George Osborne said his visit was to change UK perceptions of the country so that British people can see it as more than just an enormous factory producing cheap goods. For that to happen there needs to be a more dynamic, inclusive operation in the UK which cultivates links with Chinese business, rather than the ancient groupings of associations and dining clubs that prevail at the moment. These are good for the egos of those already doing well in China, but are not reaching out enough to the many in the UK who might find they can work in or with China.

Academic understanding
There is a deeper values debate that China and the UK might have. Our history means that we have shared a lot of good and bad things. The UK needs to support as many young people in learning Chinese, visiting China, and knowing about China as possible. And the good news is that relations will be helped by the quarter of a million Chinese students who have studied in the UK and had experience of life here in the last 15 years. As much outreach to this group, many of whom are back in China and developing exciting careers, is important: each one is an invaluable ambassador for life here. Decades after the visit of Osborne and Johnson has faded from memory, it will be these people that truly shape the future.

Professor Kerry Brown is Director of the China Studies Centre at the University of Sydney and an Associate Fellow at Chatham House.

Follow Kerry on Twitter.

Listen to Bright Blue blog editor Jonathan Algar in conversation with Guy de JonquièresBernice Lee Prof. Kerry Brown [Clip: Dr. Robin Niblett] at Chatham House: Understanding China’s strategic thinking on TTIP,


This is the forth in a series of Chatham House expert comment blog posts. Previous: Chris Vandome (Africa), Benoît Gomis (International Security) & Dr. Robin Niblett (Director).

If you are interested in contributing please e-mail or tweet @jonathanalgar.