by Professor Paul Reynolds, economist, and Professor Hugo de Burgh, Director of the China Media Centre, both of the University of Westminster.
The purpose of these Hearings is to help businesses and the government better to understand the growing impact of Chinese economic expansion on the British industrial and commercial system. In addition, the Hearings are an attempt to help senior Chinese officials understand the impact changes in their country are having on others, as they see them, so as to anticipate and take advantage of changes in Chinese relationships with the BRITISH and Europe.
The aim is thus to help in the evolving relationships between British businesses and government on the one side, and Chinese businesses and government on the other.
By ‘impact’ is meant the opportunities and threats from Chinese expansion to which British businesses may respond, and the evolving scope for British businesses to help the commercial and governmental sectors in China to address growth-related problems as they see them.
Furthermore, it is taken to mean those commercial and social changes underway in Britain that are driven by Chinese expansion and which have a major influence on British government policy. These range from British export support in Britain & China, Britain-China foreign relations, British education and R&D policies (ie following increasing use of China as a manufacturing base), and facilitation of Chinese investment in Britain and Europe.
For British businesses and government departments, an understanding of the impact of Chinese expansion on commercial opportunities and threats, and on public policy, requires a solid appreciation of the nature of Chinese growth and economic success, and the risks attached.
For example, how much of China’s export growth is driven by foreign companies based in China, how much ‘foreign-driven’ sourcing, and how much by Chinese companies pursuing international market share on their own account ? What are the educational and industrial-structure implications of accelerated manufacturing outsourcing to China, in Britain, and how should public policy adapt ? Where is Britain finding competitive advantage in China, and what is the balance between large corporations and Small or Medium sized Enterprises (SME)?
Where are Chinese companies investing and to what extent is there a ‘Chinese industrial policy’ behind such investment trends ? Is it true that Chinese policy officials are struggling with the legal and financial frame for Chinese commercial expansion and how can British expertise help smooth the way forward ? How relevant to Chinese policy are lessons from the expansion of ‘The City’ relative to Wall St., or the growth of British venture equity markets, or university-business relations, or successes in addressing pockets of regional industrial decline, for example ?
Answers to these questions, and others, form the foundations of future Britain-China commercial and governmental relations, for mutual benefit and harmony. These hearing will explore some deeper issues and generate future points of policy discussion between the two nations, as well as help British civil servants and MPs to think through policy.
7th March :China Goes Global
In 2006 China hosted a meeting of 48 African nations, a symbol of the new relationships it is developing with many African states and of a development which some other governments believe both disturb their own relationships and are of mixed international benefit. China’s search for resources to fuel its boom have already influenced both existing understandings between Latin American, Middle Eastern and Central Asian countries and third parties, and affected commodity prices. It is widely believed that Chinese manufacturing success has effects both malign and benign on importing countries. What are the implications of China’s geopolitical initiatives upon our trading future? How do Chinese initiatives such as the Asia Free Trade Zone affect British business and international position? Do the attitudes and interests of the UK, USA and EU coincide or are there major differences between their appreciations of the implications of China’s initiatives? These are the questions likely to be touched on by the main speakers and addressed in Workshop 1.
China is going global in several senses: not only do its policies affect the world, as do its needs but China is changing itself to work within the global system and, now, China is investing abroad.
Workshop 2 deals with the why and how of China’s investing abroad. With substantial trade surplus and impressive domestic savings, as well as a perceived need both to own foreign originated brands and to sell its own brands abroad, Chinese investment is beginning to matter in Europe as it already does in many other parts of the world. What will be the effects of what is termed ‘the 3rd Asian wave of investment abroad’?
Several large Chinese companies have already decided where to locate overseas, decisions which may have great impact on the host economies. What are the factors under consideration? How is this business to be won? These are questions for policy makers.
Workshop 3 looks at Consumption. Since the reforms in the 1980s China's growth model has been investment led. But as Chinese incomes rise and the middle class develops, domestic consumption will become an ever more important part of the Chinese economy. Here the questions are: how will this shift towards consumption create opportunities for businesses and what will it mean for China's trade relationships with the EU and the world?
Finally we look at the implications of protectionism, which is already called for in the USA and may increasingly be the stuff of European debate, although Britain has yet to see this become a central issue. Can we in Europe innovate, adapt and work collaboratively to render protectionism unnecessary? Can we create enough opportunities to render fears about the future unjustified? This is the key question for policy makers in the years ahead, as important for China as for Europe, since the implications of protectionism may be equally disturbing for either party.
Hugo de Burgh, Paul Reynolds