Elliot Wilson

China needs Britain more than Britain needs China

China needs Britain more than Britain needs China
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When King George III sent the diplomat-statesman Lord Macartney to Beijing in 1793 to meet China’s all-powerful Qianlong Emperor, history was in flux. The Celestial Empire had dominated world trade for two millennia, yet it was in a state of protracted decline. Britain in contrast was a rising superpower on whose empire (to use a term coined by Macartney) the sun ‘never set’.

The mission’s task was simple: unveil the latest wares from Manchester, Bristol and Edinburgh – globes, telescopes, weaponry – then wait for a dazzled and covetous audience to open trade routes through northern China. Yet despite pausing lovingly over an ornate clock, the 81-year-old Emperor declined the offer. 'Strange and costly objects' he said in a letter to the King, could not possibly interest a culture that already 'possess[ed] all things'.

Wind (a long way) forward to this week, and you can see the same delicate diplomatic invocations on display – only this time, the shoe is on the other foot. On the surface, President Xi Jinping’s state visit to Britain, the first by a Chinese leader in a decade, which began on Monday night when he touched down in west London, looks like yet more evidence of an unbalanced relationship: a relatively diminished and indebted nation desperately courting a resurgent sovereign that comes bearing money, drive, determination, and not a little commercial goodwill.

Yet the truth could not be more different. Yes, Britain has laid on all the pomp and ceremony it can muster, and for good reason. Bilateral trade between the two side is set to pass £50bn for the first time this year, making us China’s second largest European trading partner after Germany. Much of that constitutes imports, but exports are rising, too. The People’s Republic will become, probably within the next five years, not only the world’s largest economy, but the swing producing-consuming state, whose health will increasingly determine everything from the price of iron ore to the value of London-listed shares.

In recognition of that, Xi and his glamorous second wife, the folk singer Peng Liyuan, will be conveyed down the Mall at noon today in a horse-drawn carriage, attend a state banquet hosted by the Queen, and bed down for the night at Buckingham Palace. China’s strongman president, whose leadership style is more reminiscent of Chairman Mao than of Hu Jintao, the bland bureaucrat who preceded Xi, will then deliver a much-anticipated speech to parliament, in which he is likely to stress the importance of rising trade between the two great nations.

In truth though, at its current stage of (re-)development, it is China that needs Britain more than Britain needs China. Beijing has lots of money: in fact, it regularly runs the sort of current account surplus about which UK chancellor George Osborne, who will squire Xi around Manchester on Friday, can only dream. But China, ironically for a country that invented everything from gunpowder to fixed-type printing to the compass, lacks knowhow. Your house may be filled with products that were either made or assembled in mainland factories. Yet the corporate owners of those brands are typically based in London or Tokyo, rather than Beijing or Shanghai. Have you ever coveted a Chinese-branded car, smartphone, or wristwatch? Would you buy make-up or running shoes from a company incorporated in Shanxi province and listed on the Shanghai Stock Exchange? Few would still admit to doing so.

That may change, but only if China changes. And for that to happen, it needs to learn how to fit into the modern world. Its leaders need to learn the value of soft power, of building their country’s ‘brand’ and projecting it into the wider world – and there are surely fewer nations better at that than the British, with our outsized success in industries ranging from apparel to creative design to entertainment.

If party leaders in Beijing are serious about building an economy fit for 21


 century use, they need to stop stealing others’ ideas, and embrace excellence in technology and design - hence Xi’s visit to the National Graphene Institute at the University of Manchester, to find out more about a product that could change the industrial world. China needs laws that gird and protect property rights, legal rights, and copyrights. Its people need access to world-class business, accounting and financial services - hence Xi’s trip to a UK-China summit on technology and innovation at Mansion House, before handshakes with a mainland firm, Huawei Technologies, which is now one of the UK’s biggest tech-sector investors. After that a visit to Inmarsat, a satellite communications firm whose headquarters on Old Street is surrounded by thriving technology start-ups.

Britain has seemingly endless numbers of high-functioning firms ranging from plastics to chemicals, aerospace to architecture, financial engineering to healthcare. To keep its faltering economy on track, Beijing needs to create millions of jobs in such sectors in the years to come, and who better to learn from than the nation that was the first to industrialise - and then cast off its dirty industrial shackles. A country that once ruled the waves, and which is now content to peddle the softer goods and services that will power the next century. George Osborne believes Britain could, in time, become China’s most reliable and powerful partner in the developed, Western world. If so – and there is no single reason to doubt this belief – this week’s trip is a good first step along that road.