British Secretary of State for Business, Innovation and Skills Vince Cable, a key member of British Prime Minister David Cameron's delegation to Beijing, talked to China Daily's Zhang Haizhou about his mission during the visit. Excerpts of the interview follow:
Q: Are you satisfied with your visit to China? What is its most important outcome?
A. The United Kingdom and China are partners for growth, and this visit has been extremely important for forging a long-term relationship. That for me is the most important outcome.
What I have seen in the last few days has underlined how great the potential is for cooperation between our two countries. I am really pleased to have had the opportunity to discuss trade and investment with senior members of the Chinese government and with businesses of all shapes and sizes.
The Business Summit this week, which gathered about 400 delegates, was very successful and should lay the foundation for further cooperation, including UK and Chinese enterprises working together to realize commercial opportunities in third markets.
A good number of deals have been announced. They include the Rolls-Royce 750-million ($1.205 billion) agreement, the announcement of a $500-million UK-China investment fund, the geographical indicator status to protect the production of Scotch whisky and other accords - more than 40 in total - many covering areas of the UK's knowledge economy, including urban planning, education and low-carbon technologies.
We want to increase bilateral trade to $100 billion by 2015 but this is not something that can be achieved overnight. It is a marathon not a sprint, which is as I had expected.
Q: The UK is the biggest investor among the 27 European Union (EU) member states in China with $16.75 billion in investments. But China is only the sixth largest investor in the UK with just $1 billion. What is the major hurdle Chinese investors face in the UK?
A. I think there are very strong opportunities in the UK, and I would encourage Chinese companies to come and look for themselves. I think they will be surprised and excited by what they see. The capabilities of China and the UK are very complementary.
Over the past two years, we have had record numbers of new investment projects from China and strong performance from other markets as well. During this visit alone, we have highlighted nine new or recent inward investment projects, with initial investment of more than 300 million ($481.79 million).
We have more than 400 Chinese companies in the UK, but I would like to see this number increase.
The UK welcomes investment across the board, and UK Trade and Investment (UKTI), the government department that helps companies locate in the UK, is able to tackle any hurdles that might emerge.
In our experience, however, Chinese investors find that it is easy to operate in the UK.
Q: What are the major difficulties that UK investors face in China?
A. Alongside Germany, the UK is the EU's top investor in China and more than 16,000 British companies are registered there (in China). On this trade mission, we've had some of our best-known companies with us, such as Barclays, Standard Chartered and Alliance Boots, which are seeking to expand cooperation.
Prime Minister David Cameron dropped into Tesco in Beijing last week. This is a UK company that has made a substantial commitment to China and is increasing it by a further $3 billion.
The attraction for UK companies is obvious. China is the world's second largest economy and, as it grows, the services and goods that the UK excels in are becoming an ever better fit.
We are keen for companies to explore all regions of China. UKTI recently published a survey giving details about the benefits of doing business outside of the main centers such as Beijing and Shanghai.
Our message to the UK is that China is a hugely important market and UK companies should use the help available to them to seek out the opportunities.
Q: China has repeatedly urged the UK to loosen restrictions on high-tech exports. How was this issue discussed and addressed in Beijing? Why does the UK find it hard to loosen these restrictions?
A. On this mission, we had companies that are working in many high-tech areas such as Ultra Electronics, Sgurr Energy and Rolls-Royce. I would also note that six of the UK's top 10 exports to China in 2009 were high-tech goods.
I was pleased that I could open BT's innovation center in Beijing during the visit, and I also opened a Jaguar Land Rover showroom. These cars are a fine example of the UK's strong and innovative advanced engineering sector.
I'm pleased to report that one of the areas where we made progress in our talks was on strengthening cooperation in intellectual property protection.
Q: How important is Chinese investment for the UK? How do you plan to attract more Chinese investors? Which sectors in the UK would be most attractive for Chinese investors?
A. China is moving quickly up the rankings in terms of foreign investors in the UK and is currently sixth overall by number of projects. The international competition for investment is intense, but we have a good track record of Chinese companies thriving in the UK.
The British Pavilion at the Shanghai World Expo, which was awarded a gold medal last month, has been a great catalyst for attracting investment and has generated more than 1,000 leads.
As to sectors, the interests are wide-ranging. To give two examples, Xiangxue Pharmaceutical has confirmed that it will expand its UK activities, setting up its own R&D center in Cambridge by the end of 2010. And Brunel University will work with the Yuchai Engineering Machinery, the largest diesel engine manufacturer in China, on a project that could help cut fuel use by Chinese buses by 10 percent.
In the last three years, Chinese companies have committed to more than 50 R&D collaboration projects with a further 50 in the pipeline. These collaborations have led to significant R&D investments in the UK, with more planned in areas such as telecom, life sciences and the creative and automotive industries.
I would like to see this trend continue.
Q: With Sino-British ties in trade, business, and investment developing rapidly, some commentators say bilateral ties are nothing more than "business-to-business" relations. Some even say the UK attaches great importance to China because it faces fiscal difficulties at home. Do you agree with them?
A. The UK has taken tough but necessary action on fiscal spending. According to the International Monetary Fund, which endorsed our program, our economy is now recovering from the global credit crunch, with employment and investment on the rise. We retain our AAA credit rating.
The UK is not only the second biggest exporter of financial services in the world but it is also the world's sixth biggest manufacturer. We're in China because we have a commitment to strengthening our ties, and this is what this mission has achieved.
Britain has a great deal to offer China. We are a gateway to the EU, China's largest export market and the world's largest single market. We have unique advantages our time zone, our language, our universities, which include six of the best in Europe and two of the top three globally. And there is a strong strategic fit between our economies.
This visit has been a further step forward in UK-China relations, adding momentum to our commercial relationship and cementing a partnership that can help deliver strong and sustainable growth in the years ahead.
(China Daily)
