Economic summits used to be the preserve of the big Western economies and Japan. Not any more. Today’s UK-China economic summit is important not just to build on the good relations between our two countries, but also because of China’s vital role on the world stage.
China is the world’s third largest economy. Some estimate it could be the biggest before 2050. So it is right that it should have a keen interest in resolving today’s economic problems, as we build towards global recovery. Today the second UK-China Economic and Financial Dialogue will take place, the first in London. Our talks will strengthen the cultural and commercial partnership between our economies: a partnership everyone can see — on the shelves of our shops, the screens of our cinemas or in the lecture halls and laboratories of our universities.
We already have strong economic links. But we must do more to seize the shared opportunities to learn, trade and invest. Thousands of jobs, now and in the future, depend on it.
Every country has benefited from China’s integration into the world economy in the past decade. Since 2000, China has accounted for a third of global economic growth. Chinese goods are now exported all over the globe — making it the world’s second largest exporter. And this is not a zero-sum game. We all benefit; 60 per cent of Chinese exports are produced by enterprises financed by other countries.
But I believe Britain is uniquely placed to benefit. The UK is the largest European investor in China. Some 6,000 British-invested projects there span the country in a number of sectors: Vodafone in telecommunications, BP in energy, AstraZeneca for pharmaceuticals, HSBC and Standard Chartered in financial services, to name a few.
And the UK is the second top European destination for Chinese inward investment. Nearly 400 companies have set up in our country, and more than 60 are listed on our stock exchanges. They offer high-skilled jobs in engineering, telecoms and financial services.
So it is not surprising that we also want to better understand China. Nearly a million people visited the British Museum’s Terracotta Army exhibition last year. One in seven of our secondary schools is providing Mandarin lessons. London has taken on the Olympic torch from Beijing.
We have also built up a robust partnership in further and higher education. The UK was the first country to set up university campuses in China. More than 80 British universities and colleges have partnerships with Chinese institutions. We are proud to have more than 60,000 students from mainland China at UK institutions, more than from any other country.
There is a world of further opportunities for both countries. As a place to do business, China’s potential is enormous. It is the world’s largest market for internet and mobile telephony — with almost one billion users. As a place to learn, Britain offers expertise, advanced technology and a world-class science base.
The meeting between our countries today is about seizing these opportunities. But we meet against the background of the greatest global financial crisis for generations. Every country has been affected. And every country is working to get through this. So our first goal must be to agree the action needed to support growth. Both our governments have put more money into the economy now, when it is needed. China’s huge fiscal stimulus will benefit us all.
It is also imperative that we take forward the agreement reached at last month’s London summit. Both our countries will make substantial contributions to the trade finance initiatives and commit resources to the IMF and the World Bank, to lessen the impact of the crisis on developing and emerging economies. We both recognise that it is a moral imperative, as well as in our economic interest, to act.
Our joint determination to respond to the downturn must go hand in hand with efforts to expand the many links between our economies. So we must make progress in financial markets. We have been working with China for some years to help to develop its capital markets, in particular for corporate bonds. Now we must expand our programme of technical collaboration and exchange — so that those in the financial services industry, as well as regulators and central bankers — can learn from each other.
Just as importantly, I want both our countries to support more British businesses listing in China’s stock markets, and Chinese businesses listing in the London Exchange.
Third, future prosperity must be environmentally sustainable. China’s size and population presents an obvious challenge of energy supply — every year it needs to add the equivalent of 130 per cent of the UK’s total energy production. When it comes to green technology and renewable energy, we can offer a wealth of expertise.
So we will take forward our ideas to set up collaborative green research projects. These will promote learning and innovation at the business and university level by working across borders and developing new technologies.
Finally, we must do more to enhance trade links. We have a strong record of exporting services to China, selling more than £1 billion a year in their markets. But we must do more. That is why we are working towards a bilateral trade target of £60 billion by 2010. We want to move the focus towards aerospace, environmental infrastructure, biological technology, pharmaceuticals and advanced manufacturing. And we must trade across the whole of China — there are more than 250 cities there the size of Birmingham. The potential for both nations is enormous. We must seize the opportunities. Only by working together will we be able to build a stronger future.
Alastair Darling, Chancellor of the Exchequer.