George Osborne: We should embrace China, not fear its rise

[Shotgunner51]

George Osborne: We should embrace China, not fear its rise

Ahead of China visit, chancellor says UK must be ‘best partner in the west’, and develop financial and cultural links

George Osborne speaking at a global investment conference in London. ‘We want a golden relationship with China,’ he wrote.

Toby Helm and Heather Stewart
Saturday 19 September 2015 22.00 BST Last modified on Sunday 20 September 2015 10.32 BST


The United Kingdom must strive to become China’s “best partner in the west” by forging ever closer economic ties that will bring benefits to all parts of the country, George Osborne has said.

Writing in the Observer ahead of a five-day visit to China, the chancellor argued that the recent volatility in the Chinese economy must not deter the UK from developing far deeper financial and cultural links with the world’s second biggest economy.

“There are those that say we should fear China’s rise – that we should somehow guard ourselves against it. But we both reject such thinking, which would leave the UK slipping behind,” the chancellor wrote in a joint article with Lord (Jim) O’Neill, the former Goldman Sachs economist, who was made commercial secretary to the Treasury after the election. “Instead we should embrace it. We want a golden relationship with China that will help foster a golden decade for this country. It is an opportunity that the UK can’t afford to miss. Simply put, we want to make the UK China’s best partner in the west.”

Osborne and O’Neill, who are travelling with a group of business and civic leaders (including Richard Leese, the leader of Manchester city council) and heads of museums and theatres, also argue that China’s summer turbulence highlights a need for closer integration as a way to promote economic stability.

“Recent volatility should not and will not put us off. It should drive us forward, so that we integrate China’s new financial markets with our own so they are deeper and better able to absorb shocks. Then it should serve as a reminder to get our house in order so that we can deal with global difficulties.”

They will also use their visit to showcase plans for a “northern powerhouse”, and make the case that all parts of the UK need to look to China.

“We are at a critical moment in our relationship with China. We need to double our efforts to strengthen our economic links, help British firms enter the market there, and attract more investment into the UK and the northern powerhouse. Rather than standing back we must make the most of the opportunities that a growing China presents to us here in Britain.”
China’s growth has slowed sharply in recent months, as the authorities in Beijing try to shift from export-led growth to a more sustainable domestic expansion.

Crashing Chinese share prices, and a botched devaluation of the yuan in August, sent shockwaves through financial markets, stoking fears that the country may be heading for a “hard landing”.

Rapid declines in the price of oil and other commodities have been blamed on weak Chinese demand; and have sent some countries heavily dependent on exporting commodities, including Canada and Brazil, into recession.

The Federal Reserve last week delayed a long-planned rise in US interest rates, with the central bank’s chair, Janet Yellen, blaming global turmoil, including in China, for the decision to hold fire.

Next month the Queen and David Cameron will welcome President Xi Jinping to the UK on a state visit.


http://www.ft.com/intl/cms/s/0/6d107dc4-5fae-11e5-a28b-50226830d644.html#axzz3mNeRmheS

 

[Shotgunner51]

It’s in Britain’s interest to bond with China now

George Osborne and Jim O'Neill
Saturday 19 September 2015 22.34 BST

Take yourself forward, for a moment, and imagine it is the year 2030. Children born today are preparing for exams and starting to think about their future careers. China is now the world’s largest economy. Mandarin is taught in schools right across the world. And a new Silk Road for international trade, made up of roads, high-speed railway lines, bridges and airport hubs, stretches from Shanghai and Beijing through Xinjiang to Kazakhstan, Pakistan and Afghanistan before making its way to western Europe and to Britain.

This isn’t a fantasy. It is the 2030 that most economic forecasters now predict. Over the last 15 years, China has surpassed the UK, France, Germany and Japan to become the world’s second largest market. Its growth has been phenomenal. Even now, it is creating an economy the size of Australia every two years. There are those who say we should fear China’s rise – that we should somehow guard ourselves against it. But we reject such thinking, which would simply leave the UK slipping behind.

Instead, we should embrace it. We want a golden relationship with China that will help foster a golden decade for this country. It is an opportunity that the UK can’t afford to miss. Simply put, we want to make the UK China’s best partner in the west.

So over the next five days we will be travelling around China promoting the best of British culture, showcasing the “northern powerhouse” and offering its firms and authorities support from our world-leading financial services industry. We will be travelling not just with leading British business leaders but the leaders of our great museums and theatres. We want to promote understanding between our two great cultures, which have arguably done more to shape the world than any other. We won’t just be travelling to China’s great cities, but also to inner China, to areas where no UK ministers have been before. It’s these regions of “new China” that will help power its growth in the decades ahead.

As China’s global influence grows, so too must our relationship. But as we integrate further, of course we do so aware of the inevitable risks: risks that have come to a head in the last few months with turmoil in Asian financial markets that spread around the world. In the UK, we saw the FTSE fall by 4.7%, and in the US the S&P fell by 3.6%.

But recent volatility will not put us off. It should drive us forward so that we integrate China’s new financial markets with our own so they are deeper and better able to absorb shocks. Then it should serve as a reminder to get our house in order so that we can deal with global difficulties. We need to continue working through our long-term economic plan, which will mean that we run the biggest economic surplus for decades and begin bringing down our national debt.

Our economy is already growing faster than any other major advanced economy, our deficit has more than halved, and employment is near record highs. But if we are to sustain this in the longer term we must continue integrating with the world’s fastest growing regions. That has been a plan we have followed over the last five years, attracting more Chinese investment to the UK than Germany, France and Italy combined, with our exports up 73%.

Even as China’s growth slows, it will continue to be a powerhouse for the global economy. As China pushes ahead with its own reform programme, with increased consumption and a demand for services, there will be many new opportunities for the UK. Opportunities for UK manufacturing, infrastructure, retail and financial services. There will also be opportunities to attract new firms to the UK, such as Huawei, which opened its global R&D centre here last year.

This government will ensure that the benefits of our stronger relationship with China are not just felt by those in London. That is why the business delegation is not only composed of leaders from London, but businesses from the north of England, from Wales, and from the south-west will also be represented. It is also why we will be taking civic leaders such as Sir Richard Leese, head of Manchester city council, to meet their Chinese counterparts.

We hope our dialogue with China’s leaders will pave the way for a successful Chinese state visit next month – the first for a decade – when the Queen and prime minister will welcome President Xi to the UK. We are at a critical moment in our relationship with China. We need to double our efforts to strengthen our economic links, help British firms enter the market there, and attract more investment into the UK and the northern powerhouse. Rather than standing back and being left behind, we must make the most of the opportunities that a growing China presents to us.

 

[Pangu]

Either you see opportunities or you see threat. The Brits are level-headed pple, they know wats good for them.

 

[Shotgunner51]

Either you see opportunities or you see threat. The Brits are level-headed pple, they know wats good for them.

The main purpose of Mr Osborne’s mission is to persuade China that “no economy in the west is as open to Chinese investment as the UK”, as witnessed by his offer to China to take a big stake in Britain’s nuclear power revival.

The chancellor of the Exchequer hopes to drum up business for the City of London on his visit to Shanghai on Tuesday but a bigger focus is winning Chinese investment for his northern powerhouse project ahead of a state visit to the UK by President Xi Jinping in October.

To illustrate his point about the need for investment outside traditionally powerful cities of China, Mr Osborne will also take his delegation to Chengdu and Urumqi in the west of the country.

George Osborne’s willingness to open up a sector as sensitive as nuclear power to Chinese investment is a sign that political considerations are taking a secondary role to commercial interests.

Britain has become the biggest reciepient of FDI from China, $11.8 billion, was the highest in Europe — more than France and Germany combined — but UK exports to China remain weak at just 3.6% of the total.

 

[UKBengali]

The UK wants to be best buddies with China.

 

[opruh]

Yes, China is the future while usa is something that belongs to the past.

 

[pigtaker]

UK is the most cunning country in Europe for sure. what a pity for germans still under the manipulation of anglo-saxon. if it had a visional leader, germany should join the axis of china and russia, to easily take down anglo-saxon and get its revenge.

 

[Shotgunner51]

The UK wants to be best buddies with China.

Well they are pragmatic businessmen aren't they!