China and UK open up talks

imagesBefore I start the debate in regards to the Anglo China and UK debate I know that some people may have some concerns about the Human Rights Abuse that continues to dominate China which is one that I continue to  share unreservedly with my followers but I remind them that it’s not just China alone. I’m hoping that folks that we all can share and learn from each other as I strongly believe it will lead to a healthier debate.

ChinaUKAs some folks will recognize that in some parts of China there is still many issues that is still outstanding like the freedom to worship, freedom of speech and freedom of movement which the Chinese need to address by the Republic of China not forgetting the one child policy, Wei Wei imprisonment, other Human Rights activists who still in prison and the Tiananmen Square Massacre which was some of the turning point until now has not been addressed.

Boris Johnson has a lot to answer for as soon as he became mayor of London he was the one that dismantled the Anglo Chinese and UK agreement in the UK which Ken Livingstone had put in place.

_69137564_69137563Nobody was more surprised than myself to learn the Conservatives and China doing business together given their history on a number of issues not just about Tibet but the dialog that Boris Johnson previously used which caused an uproar in the UK Chinese communities.

China has invested in some manufacturing and banking in to the UK coupled by UK importing goods from China which Germany has taken the lead in investing in more goods from the Chinese.

I’m sure the two countries can learn from each other as both wants something from each other in the trade terms to open up trade from both sides of the Atlantic.

The_ReceptionMany Chinese will recall their families teaching their siblings about China and Great Britain dating as far back as 1793 under Lord George Macartney which was allegedly a sad tails of misunderstandings and mistrust from each other.

Around the 1950s under the leadership of Chairman Mao China once again shut its doors to UK over many disputes which lasted until the death of Mao. Then under the leadership of Xi Jinping saw the mao-719757reinvestment of China firstly by opening up some parts of China to the western world but maintaining very strict rules by introducing a part communism and capitalism to help the Chinese economy to build their economy which has worked until today.

xin_5806040410327972938510Then in 1997 we saw the handover of Hong Kong back to China under a Labour Government which still have caused some concerns in certain quarters of the Chinese communities worldwide.

It was the UK that in the 18th and 19th Centuries led Western attempts to make China open its economy to the world.

The objective then was to persuade the mighty Chinese empire to allow more freedom to British traders.

At that point “the empire on which the sun never sets” and the self-styled

“Middle Kingdom” had competing and incompatible world views. More than 200 years on, much has changed. But the worldview is still at issue.

Beset by a conflict of interests, cultural misunderstandings and Lord Macartney’s famous refusal to kowtow before the Chinese emperor, his mission was unsuccessful.

He said: “The empire of China is an old, crazy, first-rate man of war, which a fortunate succession of vigilant officers have contrived to keep afloat for these 150 years past, and to overawe their neighbours merely by her bulk and appearance.

“But whenever an insufficient man happens to have the command on deck, adieu to the discipline and safety of the ship. She may, perhaps, not sink outright; she may drift some time as a wreck, and will then be dashed to pieces on the shore – but she can never be rebuilt on the old bottom.”

356118This no doubt makes interesting reading for the current ship’s commander, China’s President Xi Jinping.

Along with many other Chinese, he would probably concede that Lord Macartney’s comments were prophetic and insightful given the century and a half of humiliation that followed that ill-fated mission, a century in which China saw foreign invasion, defeat by the British in the Opium Wars, civil war, economic disaster and Maoist frenzy.

But, and here’s where Xi Jinping might allow himself a wry smile at the ironies of history, now China boasts one of the largest sovereign wealth funds in the world, and another British mission is in Beijing with a very different message.

Chancellor George Osborne has said: “The Chinese economy is changing, those who think it is just a low-wage, low-tech economy are making a mistake. It is becoming a cutting-edge player in industries like technology and this is a huge opportunity for Britain.”

Already China has bought big stakes in key assets such as Heathrow Airport and Thames Water. Now its companies, many of them state owned, are investing in construction, nuclear energy, renewable energy, telecoms and property.

This is absolutely new. For two centuries, the economic relationship between the UK and China has been all about trade. At first the British wanted Chinese tea, silks and porcelain, and could offer nothing the Chinese wanted in return.

After the Macartney mission, the emperor Qianlong wrote to George III: “As your ambassador can see for himself, we possess all things. I set no value on objects strange or ingenious, and have no use for your country’s manufactures.”

Hence the British recourse to selling opium, which, to cut a long story short, led to two wars and the forced opening of the Chinese economy.

The Chinese soon realised how desperately short of cash and knowhow they were. Britain could offer both, and had the advantage of easy access and good contacts through its colony in Hong Kong.

But 30 years on, the balance of power has shifted again. British exports to China have struggled to keep pace with its growing hunger for imports of Chinese clothing, toys, laptops and mobile phones.

The trade deficit with China is now £20bn a year, partly because Britain’s strength is in services, while China’s demand is for raw materials and machine tools.

China’s trade surplus now contributes to a mighty $400bn sovereign wealth fund. And as George Osborne tries to kick-start British economic growth, the UK is competing for sovereign funds and private capital to finance investment. As a result, inward Chinese investment to the UK in the past 18 months has been greater than in the past 30 years combined.

“We could say the UK is the most open market worldwide, especially in the infrastructure sector, and this means huge business for China,” says Zhou Xiaoming, minister counsellor at the Chinese embassy in London.

But it’s not just infrastructure projects that are looking for Chinese money.

‘The UK is the land of thinkers,” adds Mr Zhou. “Chinese manufacturers could learn a lot when they are here.”

As George Osborne and Boris Johnson tour China this week, presiding over deals and offering toasts, what would the Qianlong emperor and Lord Macartney make of it all? The ironies of history would not be lost on them.

But perhaps they might warn that there are still two very different worldviews in play. For two countries with such long and proud histories, 1793 is like yesterday.

Mr Osborne will loosen regulation to allow the move.

Under an £8bn pilot scheme, London-based investors will be able to apply for a licence to use the Chinese currency to invest directly in Chinese shares and bonds.

Until now, they have had to direct their investments via Hong Kong.

Mr Osborne is also facilitating talks between Chinese banks and the UK banks regulator, the Prudential Regulation Authority, to allow them to establish branches for wholesale activities in London.

This would allow China’s huge banks to conduct business in London with companies and financial institutions, but not to offer High Street services.

London is already the main overseas location for trading China’s currency, known as the yuan or renminbi (RMB), with $5.3tn worth traded on an average day.

But strict rules on transparency and cash reserve requirements have forced China to base its three biggest banks in Luxembourg.

Setting up the bank branches is good for China, as they would be able to operate under Chinese regulations.

Mr Osborne said: “A great nation like China should have a great global currency.”

“Today we agreed the next big step in making London – already the global centre for finance – a major global centre for trading and now investing the Chinese currency, too.”

He said the move would mean more trade, investment, business and jobs for Britain.

Discussions will begin between the Prudential Regulation Authority and Chinese banks in London.

The announcement is part of the chancellor’s visit to China this week.

A joint statement from the two countries said both sides “welcomed this as an important step that cements London’s major role as one of the most important global centres for RMB trading”.

On Monday, the chancellor announced a simplified application process for Chinese tourists wanting to visit the UK while in Europe.


One response to “China and UK open up talks

  1. Our goverment is just as guilty with the human rights.Look how many people have commited suicide,under these new so called wefare reforms.I think it’s a bit rich that as well as new reforms on welfare there is also the bedroom tax.The only people who have to pay this tax,are the people on benifits.Pensioners don’t have to pay if they are on benifits.So it’s plain to see that this goverment is picking on the poor and vunrable,therefore infringing on our human rights.Let them get things right in this country,before critisising other countries.

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