Nan Yang
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Ha ha ha. Good one.
China-UK (Britain) Geopolitics and Economics: News & Discussions
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cnleio
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China is rising as the US declines. Britain can’t ignore this reality
Martin Jacques
China’s human rights are improving, and this relationship offers the UK opportunities that would otherwise be impossible
‘Since 2005 the financial crisis has rendered western growth rates close to zero and made the global economy ever more dependent on China. This is the new reality. To their great credit, Osborne and his party have seized the nettle.’ Photograph: Lauren Hurley/PA
Who would have guessed just three years ago that the David Camerongovernment would be the author of the boldest change in British foreign policy since the second world war? That is exactly what is now unfolding.
The process began this year when the British government announced it would join a Chinese initiative to help fund Asia’s enormous infrastructural needs. The UK became the first non-Asian country to join the Asian Infrastructure Investment Bank (AIIB), after which more than 30 other countries joined, including Germany and France.
The United States opposed the decision because it saw the AIIB as a threat to the International Monetary Fund and the World Bank. Britain has long been the US’s foreign policy shadow, so the decision to join the AIIB was the most significant act of independence since 1944, when John Maynard Keynes argued with America’s Dexter White at Bretton Woods over the new international financial order.
The underlying thinking behind the British decision has since become clear. This was no flash in the pan. The key mover is the chancellor, George Osborne. His approach is based on a recognition of the profound changes in the global economy caused by China’s rise. At the time of the last state visit to Britain by a Chinese president, that of Hu Jintao in 2005, the UK economy was still slightly larger than that of China: today China’s GDP, by the most conservative measure, is over three times greater. We are fast becoming a minnow by comparison.
Since 2005, the financial crisis has rendered western growth rates close to zero, left their economies debt-ridden, and made the global economy ever more dependent on China for growth and capital. This is the new reality that imbues the thinking of any government, right or left. To their great credit, Osborne and his party have seized the nettle.
The courageous decision to join the AIIB bestowed an advantage on the UK. From being a western laggard in its relationship with China, Britain moved to the front of the queue. Cameron’s claim that the UK could be “China’s best partner in the west” was not empty rhetoric, nor was the idea of a “golden decade” in Sino-British relations.
President Xi Jinping’s visit this week is likely to see many new commercial agreements between the two countries. Britain’s much-neglected infrastructure requires huge capital investment, money it does not have. The willingness of the Chinese to invest in HS2, a new programme of nuclear reactors and the so-called “northern powerhouse” offers opportunities that otherwise would be impossible. At the same time, the City of London is the largest offshore market for the renminbi, which could be crucial to its long-term future. Xi’s visit will greatly enhance the growing cooperation between China and the UK and give further shape to what might be described as Britain’s pivot to China.
President Xi Jinping and his wife Peng Liyuan arrive at London’s Heathrow airport. Photograph: Toby Melville/Reuters
Of course, there will be those who object on the grounds that the UK, in its embrace of China, is moving away from the US. However, the situation is rather more complex. China is rising; the US is declining. By 2030 it is projected that the Chinese economy will be twice the size of the US’s. Can Britain, or any country, ignore this? Most countries in the world in varying degrees are pivoting to China just as once, in America’s heyday, they pivoted to the US. This is about the force of gravity, not the ivory tower.
Take Australia, a very close and long-term American ally. China now accounts for over a quarter of its exports – far greater than America’s share. That, by default, means Australia has come to enjoy a much closer relationship with China: the Australians now talk of America as “our ally” and China as “our very good friend”
Those who want to ignore or deny these realities are living in a world that is growing smaller and less important by the day. Countries either change with the world or are rendered insignificant and marginal by those changes. The British government has recognised this and deserves support for doing so.
Of course there is understandable unease. China is a very different proposition from the US. Whereas historically we share much with the latter, that is not true of China, which comes from entirely different historical and cultural roots. As a result there is much room for disagreement and misperception. There is a powerful presumption in the west that China should be like us: it never has been and never will be. We must learn to accept this and try to understand China on its own terms rather than ours.
We are uncomfortable about China’s human rights record which, by our values, certainly leaves a great deal to be desired. But even here there is a bigger picture. China has taken 600 million people out of poverty, arguably the single biggest global contribution to human rights over the last three decades. Over the same period China has become a much freer society. The nation is a work in progress. Its human rights record is not a reason to reject a much closer relationship with it.
The new turn to China offers Britain the prospect of modernising our infrastructure in a way that otherwise would be inconceivable. It will create many new jobs. Above all it shows how Britain can prosper in the Asian-oriented and China-centric world rapidly unfolding before us.
Martin Jacques
China’s human rights are improving, and this relationship offers the UK opportunities that would otherwise be impossible
‘Since 2005 the financial crisis has rendered western growth rates close to zero and made the global economy ever more dependent on China. This is the new reality. To their great credit, Osborne and his party have seized the nettle.’ Photograph: Lauren Hurley/PA
Who would have guessed just three years ago that the David Camerongovernment would be the author of the boldest change in British foreign policy since the second world war? That is exactly what is now unfolding.
The process began this year when the British government announced it would join a Chinese initiative to help fund Asia’s enormous infrastructural needs. The UK became the first non-Asian country to join the Asian Infrastructure Investment Bank (AIIB), after which more than 30 other countries joined, including Germany and France.
The United States opposed the decision because it saw the AIIB as a threat to the International Monetary Fund and the World Bank. Britain has long been the US’s foreign policy shadow, so the decision to join the AIIB was the most significant act of independence since 1944, when John Maynard Keynes argued with America’s Dexter White at Bretton Woods over the new international financial order.
The underlying thinking behind the British decision has since become clear. This was no flash in the pan. The key mover is the chancellor, George Osborne. His approach is based on a recognition of the profound changes in the global economy caused by China’s rise. At the time of the last state visit to Britain by a Chinese president, that of Hu Jintao in 2005, the UK economy was still slightly larger than that of China: today China’s GDP, by the most conservative measure, is over three times greater. We are fast becoming a minnow by comparison.
Since 2005, the financial crisis has rendered western growth rates close to zero, left their economies debt-ridden, and made the global economy ever more dependent on China for growth and capital. This is the new reality that imbues the thinking of any government, right or left. To their great credit, Osborne and his party have seized the nettle.
The courageous decision to join the AIIB bestowed an advantage on the UK. From being a western laggard in its relationship with China, Britain moved to the front of the queue. Cameron’s claim that the UK could be “China’s best partner in the west” was not empty rhetoric, nor was the idea of a “golden decade” in Sino-British relations.
President Xi Jinping’s visit this week is likely to see many new commercial agreements between the two countries. Britain’s much-neglected infrastructure requires huge capital investment, money it does not have. The willingness of the Chinese to invest in HS2, a new programme of nuclear reactors and the so-called “northern powerhouse” offers opportunities that otherwise would be impossible. At the same time, the City of London is the largest offshore market for the renminbi, which could be crucial to its long-term future. Xi’s visit will greatly enhance the growing cooperation between China and the UK and give further shape to what might be described as Britain’s pivot to China.
President Xi Jinping and his wife Peng Liyuan arrive at London’s Heathrow airport. Photograph: Toby Melville/Reuters
Of course, there will be those who object on the grounds that the UK, in its embrace of China, is moving away from the US. However, the situation is rather more complex. China is rising; the US is declining. By 2030 it is projected that the Chinese economy will be twice the size of the US’s. Can Britain, or any country, ignore this? Most countries in the world in varying degrees are pivoting to China just as once, in America’s heyday, they pivoted to the US. This is about the force of gravity, not the ivory tower.
Take Australia, a very close and long-term American ally. China now accounts for over a quarter of its exports – far greater than America’s share. That, by default, means Australia has come to enjoy a much closer relationship with China: the Australians now talk of America as “our ally” and China as “our very good friend”
Those who want to ignore or deny these realities are living in a world that is growing smaller and less important by the day. Countries either change with the world or are rendered insignificant and marginal by those changes. The British government has recognised this and deserves support for doing so.
Of course there is understandable unease. China is a very different proposition from the US. Whereas historically we share much with the latter, that is not true of China, which comes from entirely different historical and cultural roots. As a result there is much room for disagreement and misperception. There is a powerful presumption in the west that China should be like us: it never has been and never will be. We must learn to accept this and try to understand China on its own terms rather than ours.
We are uncomfortable about China’s human rights record which, by our values, certainly leaves a great deal to be desired. But even here there is a bigger picture. China has taken 600 million people out of poverty, arguably the single biggest global contribution to human rights over the last three decades. Over the same period China has become a much freer society. The nation is a work in progress. Its human rights record is not a reason to reject a much closer relationship with it.
The new turn to China offers Britain the prospect of modernising our infrastructure in a way that otherwise would be inconceivable. It will create many new jobs. Above all it shows how Britain can prosper in the Asian-oriented and China-centric world rapidly unfolding before us.
Ain't that the truth?
cnleio
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The Guardian view on the Chinese president’s visit: a big gamble
Britain wants a close long-haul economic relationship with China, but there are huge risks ahead
British and Chinese flags line the Mall in London in preparation for the state visit of the Chinese president, Xi Jinping. Photograph: Amer Ghazzal/Barcroft Media
President Xi Jinping’s three nights under the Queen’s roof, his address to both houses of parliament, his ride in a royal carriage, and his trip to Manchester with David Cameron this week are indications of much more than the usual ceremonial buttering up of foreign leaders at which Britain so excels when it is looking for favours from abroad. They suggest, instead, a fundamental shift in British foreign policy, and one with profound implications. It is a shift that has not been preceded by the full public discussion it deserves, and one that could constrain us and commit us for decades to come. Put simply, it is proposed to hitch Britain’s economy to the Chinese wagon, with all that may mean in the future in terms of Chinese ownership of key British industries, a growing Chinese presence in our financial sector, and growing Chinese influence over our economic decisions and over our approach to critical human rights issues in China.
The Chinese president has called this “a visionary and strategic choice that fully meets Britain’s own long-term interest”. The question for Britain is whether he is right. It would of course be foolish not to engage with China. Every country in the world does so. Indeed, France and Germany have been ahead of Britain in recent years in seeking “special” relations with China. But the pursuit, particularly by the chancellor, George Osborne, of best friend for ever status with China has gone beyond the usual jockeying for advantage between European states in Beijing. The Cameron government appears to have something much more comprehensive and long-term in mind.
The shift toward China, gradually taking shape under this government and its coalition predecessor, reflects a growing sense that the British economy, although the headline figures at the moment may look respectable, is vulnerable in a competitive age, and could become more exposed in the future. Our manufacturing will never again be what it was, our productivity is no more than middling, and the City, along with the sale of London property as a safe haven for the world’s rich, and, in some cases, for the world’s crooks, does not generate enough to fill the gap, even if British prowess in arts, culture and entertainment, which earns us a lot, is taken into account. We need long-term investment, the British government has apparently reasoned, and the Chinese have the biggest pot of ready-to-invest money in the world. The model for the long-haul relationship they have in mind is the nuclear power station deal expected to be signed and sealed during President Xi’s visit. In return for renewing and sustaining British infrastructure for years to come, the Chinese get a platform within the City for their own equity offerings, and their global investment and currency dealings, as well as increased influence over Britain and, assuming Britain stays in the EU, over Europe.\
Such a deal will undoubtedly strain our relations with the United States. From Washington it may well look like they get the hard job of dealing with a militarily pushy China in the Pacific, coping with Chinese cyber attacks, and sticking up, as much as they do, for human rights, while Britain and, to a lesser extent, other European countries seek economic advantage and downplay everything else. It will not endear us to our European partners either.
Apart from those considerations, this China policy represents a bet on the Chinese economy’s future that is by no means a sure one. That country’s grave internal debt, its difficult labour relations, its huge overbuilding, as well as the very evident slowing in its growth, combined with overly tight political control, suggest big troubles could lie ahead.
Finally, liberals in China look to western countries, not least Britain, for the pressures and publicity that help them survive and ultimately to have a chance to shape their country’s future. How much would we forfeit in this area in an ever closer economic embrace of China?
True, it is a difficult call, but Mr Osborne’s misjudged trip to Xinjiang in September suggests we are already getting the balance between profit and principle wrong. We have been frightened before about overdependence on foreign economic power – about the US, oil sheikhs, Japan – and in retrospect the risks were less than they seemed at the time. But China could be different. The former business secretary Vince Cable wrote recently that the visit is “something of a gamble”. Many will be less sure than he that the risk is worthwhile.
Xi Jinping state visit: China's relationship with Britain in numbers
Chinese president is in the UK this week, the first visit by a Chinese head of state in 10 years. Here we look at the two countries’ ties in charts and figures
US president Barack Obama, British prime minister David Cameron and Chinese president Xi Jinping cross paths during the leaders’ summit on peacekeeping at the UN in September. Photograph: UPI/Landov/Barcroft Media
Xi Jinping is in the UK for the first state visit to Britain by a Chinese head of statein 10 years. Hu Jintao, Xi’s predecessor, visited the country in 2005, when Tony Blair was prime minister.
This visit reciprocates several made by Conservative politicians to China. David Cameron led a trade mission to Asia’s biggest economy in 2013 and George Osborne was there just last month.
The Chinese government is targeting economic growth of 7% this year, the lowest in over two decades. This follows a crisis over the devaluation of China’s currency and was followed by a stock-market crash. But that did not seem to dent the UK chancellor’s enthusiasm for a deepening of Sino-British ties and Osborne hascalled the impact on other economies “relatively limited”.
Several infrastructure projects the government is pushing for rely on Chinese investment. The most notable is the new Hinckley Point nuclear power station, which Osborne talked about during his visit to China.
Chinese companies invested $5.1bn (£3.29bn) in the UK during 2014, according to Baker McKenzie and the Rhodium Group. This is more than they spent in any other major European economy. One of the more notable deals was the purchase of Pizza Express by private equity firm Hony Capital.
Between 2000 and 2014, Chinese investment in Britain totalled $16bn compared with $8.4bn in Germany, $8bn in France, $6.7bn in Portugal and $5.6bn in Italy.
The UK government also has ambitious targets when it comes to trade.Osborne envisions China as the UK’s second largest trading partner after the US by 2025.
More UK products are making their way to China than ever before, with 4.8% of British goods exported there in 2014, up from 1.3% in 2004.
However, this is still considerably behind the US (12.8%), Germany (10.6%) and the Netherlands (7.9%).
But while exports elsewhere have flatlined, those to China continue to grow.
UK imports from China have increased a lot faster than exports. Britain’s trade deficit with the Asian country in 2014 was £19.5m. When only looking at goods, that figure increases to £22.5m, which is second only in the world to Germany.
Part of the way to change that is to make Britain a place that it is easier for Chinese companies to trade with.
On his trade mission to China in 2013, David Cameron said that French and German language classes should be snubbed in favour of Mandarin. The number of pupils taking Chinese GCSE has begun to increase again after a drop off in 2012, which was largely due to many switching to the alternative ICGSE qualification.
Britain and China have also announced a plan that would lead to stocks on the Shanghai market being traded in London and vice versa.
Although the UK isn’t the most exposed of the G7’s main economies to a slowdown in China, a significant decline in Chinese imports could lead to a substantial loss for the British economy.
Britain wants a close long-haul economic relationship with China, but there are huge risks ahead
British and Chinese flags line the Mall in London in preparation for the state visit of the Chinese president, Xi Jinping. Photograph: Amer Ghazzal/Barcroft Media
President Xi Jinping’s three nights under the Queen’s roof, his address to both houses of parliament, his ride in a royal carriage, and his trip to Manchester with David Cameron this week are indications of much more than the usual ceremonial buttering up of foreign leaders at which Britain so excels when it is looking for favours from abroad. They suggest, instead, a fundamental shift in British foreign policy, and one with profound implications. It is a shift that has not been preceded by the full public discussion it deserves, and one that could constrain us and commit us for decades to come. Put simply, it is proposed to hitch Britain’s economy to the Chinese wagon, with all that may mean in the future in terms of Chinese ownership of key British industries, a growing Chinese presence in our financial sector, and growing Chinese influence over our economic decisions and over our approach to critical human rights issues in China.
The Chinese president has called this “a visionary and strategic choice that fully meets Britain’s own long-term interest”. The question for Britain is whether he is right. It would of course be foolish not to engage with China. Every country in the world does so. Indeed, France and Germany have been ahead of Britain in recent years in seeking “special” relations with China. But the pursuit, particularly by the chancellor, George Osborne, of best friend for ever status with China has gone beyond the usual jockeying for advantage between European states in Beijing. The Cameron government appears to have something much more comprehensive and long-term in mind.
The shift toward China, gradually taking shape under this government and its coalition predecessor, reflects a growing sense that the British economy, although the headline figures at the moment may look respectable, is vulnerable in a competitive age, and could become more exposed in the future. Our manufacturing will never again be what it was, our productivity is no more than middling, and the City, along with the sale of London property as a safe haven for the world’s rich, and, in some cases, for the world’s crooks, does not generate enough to fill the gap, even if British prowess in arts, culture and entertainment, which earns us a lot, is taken into account. We need long-term investment, the British government has apparently reasoned, and the Chinese have the biggest pot of ready-to-invest money in the world. The model for the long-haul relationship they have in mind is the nuclear power station deal expected to be signed and sealed during President Xi’s visit. In return for renewing and sustaining British infrastructure for years to come, the Chinese get a platform within the City for their own equity offerings, and their global investment and currency dealings, as well as increased influence over Britain and, assuming Britain stays in the EU, over Europe.\
Such a deal will undoubtedly strain our relations with the United States. From Washington it may well look like they get the hard job of dealing with a militarily pushy China in the Pacific, coping with Chinese cyber attacks, and sticking up, as much as they do, for human rights, while Britain and, to a lesser extent, other European countries seek economic advantage and downplay everything else. It will not endear us to our European partners either.
Apart from those considerations, this China policy represents a bet on the Chinese economy’s future that is by no means a sure one. That country’s grave internal debt, its difficult labour relations, its huge overbuilding, as well as the very evident slowing in its growth, combined with overly tight political control, suggest big troubles could lie ahead.
Finally, liberals in China look to western countries, not least Britain, for the pressures and publicity that help them survive and ultimately to have a chance to shape their country’s future. How much would we forfeit in this area in an ever closer economic embrace of China?
True, it is a difficult call, but Mr Osborne’s misjudged trip to Xinjiang in September suggests we are already getting the balance between profit and principle wrong. We have been frightened before about overdependence on foreign economic power – about the US, oil sheikhs, Japan – and in retrospect the risks were less than they seemed at the time. But China could be different. The former business secretary Vince Cable wrote recently that the visit is “something of a gamble”. Many will be less sure than he that the risk is worthwhile.
Xi Jinping state visit: China's relationship with Britain in numbers
Chinese president is in the UK this week, the first visit by a Chinese head of state in 10 years. Here we look at the two countries’ ties in charts and figures
US president Barack Obama, British prime minister David Cameron and Chinese president Xi Jinping cross paths during the leaders’ summit on peacekeeping at the UN in September. Photograph: UPI/Landov/Barcroft Media
Xi Jinping is in the UK for the first state visit to Britain by a Chinese head of statein 10 years. Hu Jintao, Xi’s predecessor, visited the country in 2005, when Tony Blair was prime minister.
This visit reciprocates several made by Conservative politicians to China. David Cameron led a trade mission to Asia’s biggest economy in 2013 and George Osborne was there just last month.
The Chinese government is targeting economic growth of 7% this year, the lowest in over two decades. This follows a crisis over the devaluation of China’s currency and was followed by a stock-market crash. But that did not seem to dent the UK chancellor’s enthusiasm for a deepening of Sino-British ties and Osborne hascalled the impact on other economies “relatively limited”.
Several infrastructure projects the government is pushing for rely on Chinese investment. The most notable is the new Hinckley Point nuclear power station, which Osborne talked about during his visit to China.
Chinese companies invested $5.1bn (£3.29bn) in the UK during 2014, according to Baker McKenzie and the Rhodium Group. This is more than they spent in any other major European economy. One of the more notable deals was the purchase of Pizza Express by private equity firm Hony Capital.
Between 2000 and 2014, Chinese investment in Britain totalled $16bn compared with $8.4bn in Germany, $8bn in France, $6.7bn in Portugal and $5.6bn in Italy.
The UK government also has ambitious targets when it comes to trade.Osborne envisions China as the UK’s second largest trading partner after the US by 2025.
More UK products are making their way to China than ever before, with 4.8% of British goods exported there in 2014, up from 1.3% in 2004.
However, this is still considerably behind the US (12.8%), Germany (10.6%) and the Netherlands (7.9%).
But while exports elsewhere have flatlined, those to China continue to grow.
UK imports from China have increased a lot faster than exports. Britain’s trade deficit with the Asian country in 2014 was £19.5m. When only looking at goods, that figure increases to £22.5m, which is second only in the world to Germany.
Part of the way to change that is to make Britain a place that it is easier for Chinese companies to trade with.
On his trade mission to China in 2013, David Cameron said that French and German language classes should be snubbed in favour of Mandarin. The number of pupils taking Chinese GCSE has begun to increase again after a drop off in 2012, which was largely due to many switching to the alternative ICGSE qualification.
Britain and China have also announced a plan that would lead to stocks on the Shanghai market being traded in London and vice versa.
Although the UK isn’t the most exposed of the G7’s main economies to a slowdown in China, a significant decline in Chinese imports could lead to a substantial loss for the British economy.
Shotgunner51
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I'm ok with this, its not like the UK will choose political ties with China over US.
Also UK goals are more in sync with US than other Western countries, so I'd rather UK be the 'inside man' on China than say, Germany.
Well said, completely agree with you.
Despite ever-deepening business tie with China, UK will continue to pledge full loyalty towards Washington as long as the special Anglo-Saxon (which will still be the majority of US in the coming decades) tie exists. Germany is a whole different story, being the truly dominant power on the continent, the country itself is a potential challenger to Pax Americanna in Europe, let alone your "inside man". You know it very well, so does China.
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Götterdämmerung
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Just saw the royal welcome ceremony. Lots of pomp and circumstance there. LOL
Martian2
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Don't be literal.
Military and economic power are relative.
US has 66 or so submarines. All nuclear.
China has about 70 submarines. Mix of nuclear and diesel-electric. Since China only intends to fight in the South China Sea, diesel-electric with AIP is sufficient.
US economy is $17 trillion.
China's economy is $11 trillion (or $12 trillion under SNA 2008).
Percentage-wise China's economy is gaining on the US economy.
cnleio
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When Britain start playing the balance between the best friend-U.S and China (like join AIIB), it only means China growing faster and they worry the future to make a new best friend !
NASA fund is cutting every year. And US military for the first time, talk about control spending.. The obama government neverly default in world history. lol
China ever increasing space fund. Ever double digit military growth.
You can continue the denial if you think US is not declining.
VCheng
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Good Luck to China in achieving that goal. Is there a source to this particular projection?
So China needs to add 22 trillion dollars to its economy to be twice the US economy in 15 years, assuming that the US economy does not grow at all during this period. Right.
Martian2
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The US is a moving target. The US economy grows at an average of 2% per year. Inflation is also approximately 2% per year. Annual nominal growth (which is measured in current US dollars) is 4%.
China's economy is slowing down. China will probably average 6-7% economic growth for the next five years. Inflation is approximately 3% per year (or 1% higher than the US). The outlook for currency appreciation is uncertain. However, due to the massive $550 billion merchandise trade surplus, I'll guess there will be moderate appreciation of the Chinese currency over a 5 to 10 year period. Annual Chinese nominal economic growth is about 10%.
In my view, China will overtake the US economy in nominal terms somewhere around 2022. However, the Chinese economy may keep slowing down. Doubling the size of the US economy will take a very long time.
Let's just ignore the nominal GDP for a second.
Last year, China consumed 29% more energy than the US (source: BP, page 40 on Primary Energy Consumption).
Since Chinese and US technological levels are approximately the same (e.g. both build nuclear reactors, billion-dollar offshore oil platforms, satellites with 54 transponders and 15-year lifespan, stealth fighters, supercomputers, 28nm and below semiconductors, etc.), the level of energy consumption should tell us which is the bigger economy.
In my opinion, I think China already has a larger economy than the US.
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