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Ambassador's interview with CBBC(China-Britain Business Review)
2009/09/29

 

As China celebrates the 60th anniversary of the founding of the People’s Republic, what would you single out as the country’s biggest achievements of the past 60 years?

I think one of the biggest achievements has been that through its hard work, China has solved the problem of feeding its 1.3 billion of population and brought its people out of poverty into a generally well-off society. From being a low-income nation, China has climbed to the moderate income level.

In 1949, the majority of Chinese people did not have enough to eat. The average food intake was only 195 kg per person, whereas by 2008, the figure had doubled to reach 404 kg. With only 7 per cent of the world’s farmland, China has solved the problem of feeding its people, who make up 22 per cent of the world’s population.

In 1949, the total GDP in China was only US$18bn, but in 2008 it reached US$4.3 trillion, behind only the US and Japan. China has become one of the top countries in the world for its foreign exchange reserves, international trade, foreign direct investment, industrial output value and the rate at which its contribution to world economic growth is rising.

Of course, we need to be aware that China is still a developing country. The GDP per capita is below that of the top 100 in the world, and only equivalent to one-thirteenth of that of the UK. There is still a long way to go before China achieves industrialisation and rises to the level of moderately developed countries.

You have been ambassador to the UK for two and a half years. What are your views about developments in UK-China trade and investment over this period?

There has been a significant development of trade and investment between the UK and China over the past few years.

In 2006, the trade volume between the two countries exceeded US$30bn for the first time, reaching US$39.4bn in 2007 and US$45.6bn in 2008, with an encouraging annual increase rate of over 20 per cent. The scope of bilateral business is expanding as well, and now covers nearly all products. At the moment, the UK is China’s third largest trade partner in the EU, and China is the UK’s seventh largest trade partner.

China and the UK are also rapidly increasing their investment in each other. The UK remains the biggest EU investor in China, and China is increasing its investment in the UK as well. In 2008, there were 59 Chinese investment projects in the UK, and there are currently 50 Chinese companies listed on the London Stock Exchange. Some large Chinese state-owned enterprises, such as Chinalco, CNPC and CIC, have made some high-value investments in UK companies. Many talked to me about investing in the UK when I came back to China this August.

It does not matter whether you are in the UK or in China, or which Chinese province you are in, everyone is talking about investment. UK companies want to find more investment opportunities in China, and Chinese companies want to test the water in the UK. Therefore, I believe that China-UK investment can grow further.

Of course, the financial crisis is having a negative impact on the trade and investment between the two countries, but at the moment, the economies of China, the UK and the world are recovering. I believe that the two countries should take this chance to consider how to create new trade and investment opportunities. This has become a focal point of the Chinese Embassy, the British Government and CBBC alike.

You have met many representatives of British companies from a wide range of sectors while you have been in the UK. As a result of these meetings, what is your overall impression of the capabilities of British industry?

I have visited quite a few UK companies, including BP, Rolls-Royce, JCB, GSK and Arup. I have also visited some factories and talked with entrepreneurs in the East Midlands. In London, I have talked with many British people in the fields of business, finance and design. I am very impressed with UK industry, including manufacturing and design. The UK is a world leader in many important and high-tech industries. Its designers are also very active.

China is stepping up its industrialisation process; a lot of Chinese companies are talking about how to apply new technologies and improve their products. I think the economic and industrial sectors in the UK and China complement each other well, and there is a lot of room for cooperation.

What the UK side needs is a market, the means to turn your designs and creativity into commercial results. What China needs is new and advanced technologies, designs and management experience. We could learn from each other. Therefore, I believe the future for UK-China cooperation is very promising. Both sides can develop and grow their economies together.

What more can China and the UK do together to bring more Chinese companies to the UK to invest?

Lord Mandelson visited China earlier in September in order to further UK-China business and economic connections. He met with chinese leaders and made a speech in the Central Party School. He also spoke with the Chinese media. There will also be visits from Parliament and from CBBC. All those visits will enhance our efforts in finding opportunities for cooperation.

In my opinion, the most important thing business needs is information and a platform to facilitate contacts between the business sectors of our two countries, helping them to understand each other and become partners. As for Chinese companies, especially SMEs, the biggest problem is the lack of awareness of the global investment environment and international cooperation. We need to help them to avoid mistakes.

Some Chinese companies, such as Alibaba, have been trying to settle this problem and have achieved some progress. Jack Ma, chairman of Alibaba is very interested in expanding overseas. I am very happy that he set up his European headquarters in London, and believe he can play a role in facilitating communication and business cooperation between the two countries.

We still have a lot of work to do, but we need to be patient. We can’t strike gold straightaway, it is more a question of small steps leading to success.

As we celebrate the 60th anniversary of the PRC, we also need to plan for the future. The UK and China should reconsider strategies and take our trade and economic relationship to a higher level.

Some UK companies considering doing business in China are concerned about the risks of infringement of their intellectual property. What more can China do to reassure them on this issue?

IPR protection is in the interest of China, as China is currently upgrading its industry, and reforming the economic system as well as becoming a creative society. The Chinese government has long paid attention to IPR problems. After joining the WTO, the government improved its control and regulation of IPR protection, and developed and improved the legal system relating to IPR, as well as education and enforcement. The overall result has been impressive.

IPR protection started quite late in China, but has been improving rapidly. China took only 20 years to reach the level that some developed countries has taken 40-50 years to reach. China’s legal system gives good protection to patents and trademarks, and advantages in legal costs and efficiency. For example, the term of patent protection is 20 years, and costs are only 10 per cent of those in the G7.

British IPR experts have told me that China is not to blame for all of the IPR problems faced by foreign companies in China. Sometimes they arise in the company itself, for instance they may not have registered trademarks, designs and patents in China on time; sometimes problems arise from a lack of understanding of the Chinese market and legal system, from inadequate knowledge of local differences in China, or from a shortage of China IPR expertise.

China is still a developing country, and its IPR protection is still in progress. IPR is also a global problem that calls for collective action. In recent years, China has set up dialogues on IPR with many western countries. The UK has valuable experience and practice in IPR that China could learn from; the two countries should step up their exchanges.

The Copenhagen summit in December will be an opportunity for the world to agree a global deal on climate change. The Chinese government has regularly stated its determination to tackle climate change and environmental issues. What outcomes would the Chinese Government like to see from this conference?

Our biggest and most fundamental expectation is that the conference will be a success, as dealing with the climate change is a global responsibility and a problem faced by all human beings.

Specifically, first of all, we hope for a consistent policy to deal with climate change. That is to continue to follow the United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol and the Bali Road Map. The key is to stick to the principle of “common but differentiated responsibilities.”

Second, we hope that developed countries will continue to take primary responsibility for reducing emissions, and provide funding, technology transfer, capacity building to developing countries, and create proper mechanism.

Third, the developing countries should work under a sustainable framework, with technology, funding and system support from developed countries, and take appropriate actions to adjust and mitigate climate change according to their own conditions.

China will work on the basis of the UNFCCC and Kyoto Protocol, according to the requirements of the Bali Road Map, in line with its current national conditions, and take the responsibilities appropriate to its stage of development, obligations and capability. It will carry out strong domestic policies and actions, in order to contribute to the protection of the global environment from climate change.

And finally, on a personal level, what do you most like about living and working in the UK?

I like the strong cultural atmosphere in the UK very much. The UK is a country with a rich history, and London is a global capital of culture. The city has many world-class museums and art galleries such as the British Library, the British Museum and V&A. There are lots of theatres in London’s West End with excellent shows throughout the year. During my two and a half years in the UK I have been to the British Museum 15 times in the course of my work and out of personal interest. One week I went to the V&A four times, but I still very much enjoyed each visit. Sometimes when I am tired after work, or during holidays, I go to the theatre alone to enjoy the most popular shows. For me, it is not only a good way to relax, but also a spiritual enjoyment. I can also take these opportunities to get to know more about British culture and society.

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