China, UK can work together in third countries

By Sun Wei Source:Global Times Published: 2018/1/31 22:09:36

Sir William Ehrman, KCMG Photo: Courtesy of Xin Studio

Illustration: Peter C. Espina/GT

Editor's Note:

UK Prime Minister Theresa May arrived in Wuhan, Central China's Hubei Province on Wednesday to begin her three-day visit to China. A China-UK CEO Council was set up on Wednesday to offer a communication platform for companies from both countries, according to China's commerce ministry. Global Times London correspondent Sun Wei (GT) interviewed Sir William Ehrman, KCMG, former British Ambassador to China (Ehrman), on the sidelines of the China-UK Economic and Trade Forum held on January 18 in London, seeking his views on China-UK cooperation.

GT: UK Prime Minister Theresa May is visiting China to promote her vision of a "global Britain." Is her visit mainly about trade?

Ehrman: Her visit will cover all subjects, because that's her role as prime minister. The economic relationship between China and the UK is very important. Chancellor of the Exchequer Phillip Hammond highlighted one point at the ninth China-UK Economic and Financial Dialogue (EFD): Britain is a natural partner of China. That's true in the sense of the Belt and Road (B&R) initiative. Very often in third countries, Britain has expertise on legal, accounting, financial, environmental issues. China is the world's leader in infrastructure projects. Those synergies mean that we can work very well together both in China and Britain, as well as in third countries, on these issues.

GT: Spokesman for the Ministry of Commerce Gao Feng said on January 18 that China is pushing for the creation of a committee of entrepreneurs from China and Britain. How can we interpret this initiative?

Ehrman: That was one of the points that I was making: the more private-sector investment there is in the B&R initiative, the better. There was a very good agreement at the last EFD that there should be a feasibility study to encourage such investment. The more we have entrepreneurs getting together, the better. Obviously, they also need an overall structure that is being created now. And the more we can get entrepreneurs to take a lead in many of these projects, the better.

GT: The ninth EFD undertook research on a proposed Shanghai-London Bond Connect program. What are the challenges and how can they be addressed?

Ehrman: I am not closely involved in that, but I welcome the whole idea of trying to encourage the private sector to get involved. I know there are British companies and Chinese companies working together very closely in Africa. That's one example of where we are doing a lot of work together. It's not just between government ministries, it's also between companies. That works very well, and it shows what we can do. For example, Chinese companies are building lots of roads, and British companies are helping to provide some of the necessary services on the financial, accounting and legal sides.

GT: Observers say that China views the UK as a gateway to the European market. Do you think Brexit could result in London losing its status as the financial "gateway to Europe"?

Ehrman: The important point is that London financially is a gateway to the world. After Brexit, we want to develop more and more the idea of global Britain.

The fact that we are leaving the EU will not affect the fact that London remains the biggest financial center in the world. Dealings with Europe will be reduced very slightly, although my own expectation is not that much. But our dealings with the world will not be affected, and they will continue to grow substantially. The European side is going to be very sizable, even if there is some effect at the margin of us leaving the EU.

GT: The UK's looming EU departure and the challenging negotiations that have come with it have brought lots of uncertainties to investors. How can they be reassured that their investments are safe and sound in the UK?

Ehrman: We are welcoming investors from around the world. China has opportunities: for example on HS2, the high-speed rail network. Then there is the nuclear industry with Hinckley going forward. There is oil and gas, production and refining, decommissioning. There is the space industry where British companies are working very well with Chinese partners. There are many areas where things are happening and that is the reassurance: things are actually happening.

GT: Britain lies at the western end of the B&R. In what way can the UK and China cooperate on the initiative?

Ehrman: There are many opportunities for China-UK cooperation. What does China want from Britain? It wants two things in particular: new investments, specifically mentioned in the EFD: nuclear, rail, space, oil, gas, and others. There are great opportunities. Second, China wants financial cooperation. London is playing a crucial role in the internationalization of the yuan. Short-term opportunities lie in the stock, bond and insurance markets, and between asset management and industries. 

What does the UK want from China? First, further entry into the Chinese market. The EFD highlighted that China will relax restrictions on foreign investment in various industries. There are also increasing opportunities in agriculture (beef, fish, dairy) and pharmaceuticals. Second, Britain wants to see the growth of entrepreneurs.


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