13 September 2021. HE Ambassador Zheng Zeguang of China attended the online Icebreaker Lecture co-hosted by the 48 Group Club, China-Britain Business Council (CBBC) and China Chamber of Commerce in the UK (CCCUK).
Chairman of the 48 Group Club Stephen Perry welcomed Ambassador Zheng.
The Ambasador delivered a keynote speech entitled Grasp the Major Trends and Advance Win-Win Cooperation, and answered questions raised by participating business representatives on China-UK relations, bilateral economic cooperation, and China’s opening-up policy.
Chair of CBBC Sir Sherard Cowper-Coles and Chairman of CCCUK Fang Wenjian also attended the event and made remarks.
The speech and Question and Answers are reprinted from the Embassy of the Chinese Embassy in the UK.
Ladies and Gentlemen,
Thank you for inviting me to the Icebreaker Lecture. I appreciate this opportunity to have an in-depth exchange of views with you — the witnesses, active participants and contributors in China-UK trade and economic cooperation.
Sixty-eight years ago, Mr. Jack Perry and other visionary business leaders from the UK broke through Western blockade against New China to open trade and dialogue. They were hailed as the “icebreakers” of China-UK relations.
In 1995, Mr. Stephen Perry and the 48 Group Club received the baton from the first generation of “icebreakers” and united the other members of the Icebreakers team. They have since then made vigorous efforts to promote the development of China-UK relations in the new era.
In 2018, Mr. Perry was awarded the China Reform and Friendship Medal by the Chinese Government for his unique contribution to the business cooperation and people-to-people exchanges between our two countries. Only ten foreign friends had the honour of receiving this medal.
Since their establishment, the China-Britain Business Council and the China Chamber of Commerce in the UK have achieved rapid development and served as an important bridge and catalyst for enhancing dialogue and cooperation between business communities of our two countries.
On behalf of the Chinese Embassy in the UK, I would like to pay high tribute to Mr. Perry, Sir Sherard, Mr. Fang and all our friends from the 48 Group Club, CBBC and CCCUK!
Ladies and Gentlemen,
As we speak, Covid-19 is still raging in the world, severely disrupting the global industrial and supply chain and holding back global economic recovery. Meanwhile, frequent natural disasters are affecting many places around the globe and pressing for greater climate change actions. Countries of the world face the daunting tasks of preventing and controlling the pandemic, promoting economic recovery and improving people’s wellbeing.
Against this backdrop, how should we interpret the major trend of development in China and promote China-UK business cooperation? This is an important question for the business communities of our two countries. We must stand high and look far in order to grasp the major trend. We should seize the opportunities and turn risks into opportunities. We need to tap the potentials and break new ground.
These are what we should do to make China-UK economic and trade cooperation deliver more benefits to the peoples of our two countries.
First, grasp China’s new development stage
After sustained and strenuous efforts, China has achieved the first centenary goal, namely, building a moderately prosperous society in all respects and eliminating absolute poverty. The country is now striving towards the second centenary goal, that is, building a strong and modern socialist country in a comprehensive way.
China’s economy has shifted from high-speed to high-quality growth in this new development stage. We will fully implement the new development concept, i.e., innovative, coordinated, green, open and shared development. Our goal is to build a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other.
Putting people at the front and centre of all our work, China has given priority to closing the gap between regions, between the urban and rural areas and between different income groups. It has entered the historical stage of pursuing common prosperity for all the Chinese people.
Chinese leaders have made it very clear that common prosperity is not egalitarianism. Nor is it attainable overnight. It is more than mere material wealth, but rather, it is about both material and spiritual enrichment that can be achieved only through down-to-earth, step-by-step and sustained efforts.
Going forward, China’s economy will become bigger, its market larger, growth impetus stronger and development more sustainable. China in the new development stage is good news for partners from all over the world, including the United Kingdom.
Second, catch up with China’s new level of opening up
Opening up is a basic national policy of China. China will open its market wider and at a higher level. For example,
- The Foreign Investment Law and its implementing regulations have come into force.
- A system of “pre-establishment national treatment plus a negative list” has been fully established.
- The manufacturing sector is now fully open.
- The service sector is being opened in an orderly manner.
- The number of items in the nationwide negative list has been reduced from 93 to 33.
In particular, important progress has been made in opening up in the financial sector. The limitations on the ratio of foreign shareholding in banks, securities firms and fund management firms are completely removed.
On September 2nd, President Xi Jinping announced four new measures at the opening ceremony of the 2021 China International Fair for Trade in Services. These measures include:
- Open up at a higher level;
- Scale up support for the growth of the service sector in BRI partner countries;
- Further improve rules for the service sector;
- And support the innovation-driven development of small- and medium-sized enterprises.
From November 5th to 10th China will host the fourth China International Import Expo. All countries, including the UK, are invited to take an active part in CIIE and by doing so, you will be in a better position to advertise and sell your products to China and share in the enormous market.
The recent measures to strengthen supervision in the technology and internet sector are important steps towards fostering a market-based, law-based and open business environment. China treats all types of market entities, including foreign businesses equally, and will, as always, welcome foreign investment. We hope that the UK will also provide a fair, just and non-discriminatory environment for Chinese companies to operate in this country.
Third, seize the new opportunities for China-UK cooperation
With highly complementary economies, China and the UK enjoy enormous potential for cooperation. The UK has strong financial and scientific and technological power, rich experience in global trade and unique advantages in the service sector, scientific and technological innovation, creative industries and green economy. With greater autonomy in trade policy making after Brexit, I believe there is no better time for the UK to build a “global Britain”, with China as a central part of it.
China has strong manufacturing capacity, growing innovative prowess, highly efficient lab-to-market capability and an enormous consumer market.
As long as our two countries uphold the win-win spirit, we will match our comparative strengths and expand opportunities.
The British Business in China Sentiment Survey issued by the British Chamber of Commerce in China at the end of last year shows that quite a lot of British businesses have expectations for a free trade agreement between China and the United Kingdom.
China regards the UK as a partner for mutually-beneficial cooperation and remains committed to working with the UK side for the sound and steady development of the China-UK relationship on the basis of mutual respect and win-win cooperation.
The UK must recognize that China is always a builder for world peace, a contributor for the international system. China is not a threat or rival at all, but an opportunity and partner for cooperation.
At this important juncture in the China-UK relationship, it is important that both sides follow the trend of the time, break the shackle of outdated mindset, overcome various obstacles and make a wise decision. We hope the British side would work with Chinese side in the same direction to improve the bilateral relations, so as to provide a stable and favourable political environment for our business cooperation.
Fourth, strive for new outcomes
In 2020, bilateral trade between China and the UK stood at 92.4 billion US dollars, and two-way investment reached 44.27 billion US dollars. In the first seven months of this year, China-UK trade in goods increased by 37.8% year-on-year, making China the UK’s largest partner of trade in goods. This is a testimony to the strong resilience in the trade and economic cooperation between our two countries. But given the size of our respective economies, there is much potential to be tapped.
Going forward, our two sides should continue deepening cooperation in traditional areas, such as trade of goods, traditional financial services, manufacturing, nuclear energy and infrastructure.
More importantly, we should actively engage each other in new industries, new businesses and new models, and create new highlights of cooperation.
The new areas include green technology, green finance, environmental protection and new energy vehicles like electric vehicles. Enhancing cooperation in these areas will enable our two sides to take the lead in global climate governance and sustainable development.
The new areas also include artificial intelligence, digital economy, high-end manufacturing, bio-technology and cultural and creative industries. By expanding such cooperation, we can lead the trend of international cooperation on innovation.
We can also work together to explore third markets under the framework of the Belt and Road Initiative and the Asian Infrastructure Investment Bank. Such cooperation can lead to multiplying effect and deliver more benefits to the peoples of both countries and beyond.
Ladies and Gentlemen,
As a Chinese saying goes, a wise man changes as time and event change.
Similarly, Francis Bacon said, “A wise man will make more opportunities than he finds.”
People with vision are those who see opportunities in challenges and go along with the main trend amid changes.
We are living in a time of major transformation. China and the UK should seize this historical opportunity firmly and take our win-win cooperation to a higher level. It is also my hope that the Chinese and British business communities will continue to emulate the first generation of “icebreakers” and make new contribution to the steady and long-term development of the China-UK relationship and economic and trade ties. The Chinese Embassy here in London stands ready to work even more closely with you in this endeavor.
I am ready to take your questions.
Question: Ambassador, you are quickly approaching your first 100th day in post (16th September). What do you see as the positives about the UK and the dynamics of the UK-China relationship; and where do you feel that there is further work to be done? What have you identified as your priorities going forward? Have you identified any areas where you feel that the UK and China are uniquely positioned to be able to work together bilaterally and on the world stage?
Ambassador Zheng: Thank you for forwarding that question. It is a very good question, because I am also reflecting on the past three months. In the past months, I have met with British government officials, parliamentarians, business leaders as well as important figures in the educational and cultural communities. After in-depth exchanges of views, we all agree that the potentials for cooperation between our two countries are yet to be fully tapped. Both sides should enhance communications, focus on cooperation, handle differences properly and develop a positive and constructive relationship, so as to deliver more benefits to our two peoples.
The past months saw some positive signs in the China-UK relationship. In July, Premier Li Keqiang had a virtual dialogue with UK business leaders. State Councilor and Foreign Minister Wang Yi talked with Foreign Secretary Dominic Raab on the phone a couple of times. A few days ago, President-designate of COP26, Mr. Sharma visited China. General Li Zuocheng, Chief of Staff of the Joint Staff Department of the Chinese Central Military Commission, had a video call with UK Chief of the Defence Staff General Sir Nick Carter. The two sides have stepped up communication and coordination on our overall relationship, trade and economic cooperation, mil-to-mil interactions and on such questions as climate change and Afghanistan.
In the first seven months of this year, trade in goods between our two countries increased by 37.8% year-on-year. China is now the biggest trading partner of goods for the UK. In areas of education, culture, science and technology, our cooperation has kept moving forward.
The China-UK relationship is at an important juncture, and at this moment both sides should work together to make the following efforts: First, fostering a right understanding of each other. The UK side should appreciate the fact that China is a development opportunity and a cooperation partner, rather than a threat or any “systemic competitor”. Second, respecting each other’s core interests and major concerns, and on these premises, focus on cooperation, handle differences properly and expand common interests. Third, expanding practical cooperation. This includes cooperation in a wide range of areas at bilateral, regional and global levels. I have highlighted some of them in my opening remarks. Fourth, deepening exchanges and cooperation in such areas as culture, education, tourism, and sports. The British tennis player Emma Raducanu won the US Open championship a few days ago. We express our congratulations to her! In sports, there is a lot for the two countries to learn from each other. We welcome the athletes of Team GB to the Beijing Winter Olympics.
The above mentioned points are the highlights of my priorities that I would like to join hands with you and with people of all sectors to continue to promote. I think that as long as both sides stay the course and make tireless efforts in the same direction, we will be able to achieve more improvement and development in the China-UK relationship.
Question: During the UK business meeting with Premier Li, the Premier said that without the support of foreign trade and investment, China will not achieve its goal of modernization, and of raising living standards for its people, including through increasing choice for Chinese consumers. On the other hand, some analysis sees the Dual Circulation Strategy as aimed at boosting the role of Chinese companies, and reducing that of foreign investors. What role does the Ambassador see UK companies playing in China’s on-going modernization? What are your thoughts on the prospects for further market opening in areas of interest to British businesses?
Ambassador Zheng: Premier Li Keqiang had a timely and successful virtual dialogue with UK business leaders. At the meeting, Premier Li sent a positive message that China remains committed to deepening reform in a comprehensive way and expanding the opening up, and that China supports broader mutually beneficial cooperation between the businesses of the two countries. China will open its market wider to the world, and will, as always, welcome foreign investors, including those from the UK. We will continue to foster a market-based, law-based and open business environment, enhance protection of the legitimate rights and interests of foreign investors, and provide better services to foreign businesses. This will enable more foreign businesses to share the opportunities arising from China’s development.
Foreign investors have made positive contribution to China’s development. They have witnessed and participated in the reform and opening up. Moreover, they have benefited from this process. For many multinational corporations, the Chinese market is an important part, in some cases the main part, of their global market share and source of profit.
China has taken coordinated efforts to prevent and control COVID-19 and promote economic and social development. Since early this year, China’s economy has maintained steady growth, and this lays a solid basis for ensuring the sound global industrial chain and supply chain. China’s enormous market provides sustained, robust driving force for the recovery of the world economy. As I said in my opening remarks, the new open-up measures China announced recently will help foster a more enabling environment and create more opportunities for businesses from other countries, including the UK, to cooperate with China.
Question: What might the Common Prosperity strategy mean for UK companies? For example, 10% of the deliveries of British luxury car makers are to China. Should these companies start focussing their attention elsewhere?
Ambassador Zheng: In pursuing common prosperity, China will always put the people front and centre. We will narrow the gaps between regions, between the urban and rural areas, and between different income groups in pursuit of high-quality development, and make solid progress toward common prosperity for all our people. The question of closing the gaps has always been on our mind since the beginning of the reform. Since we have completed the first centenary goal, eliminated absolute poverty and enabled 400 million people to become middle-incomers, it is high time that we focus on enabling more people to join the middle-income group. Don’t forget China’s total population is over 1.4 billion! So the whole logic is to enlarge the middle income group, and make sure all Chinese people can enjoy the benefits of development.
As a Chinese saying goes, the governance of a country starts with pursuing prosperity for the people. Achieving common prosperity will impel the Chinese people to work even harder to create an even better life. China’s economic strength will continue to grow; the percentage of middle-income group vs. the entire population will increase gradually; the scale of China’s market will expand further. As all the people, including all income groups, become richer, consumer needs will be more diverse and demands for high-end products will increase.
The UK has many high-end brands in the auto, household appliances and fashion industries. Many UK brands of daily necessities, food and drinks are very popular among Chinese consumers. I believe that as the Chinese people become richer and China’s market becomes larger, British businesses will have more opportunities for growth in China.
China has the world’s largest auto market. It is predicted that new-vehicle sales in China will exceed 26 million in 2021. In the first half of this year, sales of electric vehicles in China accounted for 59% of the world’s total.
The UK has many world-renowned auto brands — Jaguar Land Rover, Aston Martin, Bentley Motors, Lotus Cars and McLaren Automotive. They are very popular among Chinese consumers. UK companies are welcome to paricipate in China’s international import Expo to promote their products and services.
Question: Of course we recognize the priority that has to be given to combating the COVID-19 pandemic. But the current travel restrictions have major implications for UK business, teachers and others in China. The resumption of direct flights between the UK and China would be a very welcome step. Can you offer any indication on the prospects for this?
Ambassador Zheng: We attach great importance to providing facilitation to the people-to-people exchanges between our two countries. Resuming direct flights between our two countries is very important. It’s something we have been thinking about all along. Having said that, this will depend on the situation of COVID-19. We will monitor the situation of the pandemic and make adjustment accordingly. Stay tuned.
Question: What is the Ambassador’s view on the earliest possible resumption of the bilateral economic dialogues? In particular the Economic and Financial Dialogue and the Joint Economic and Trade Commission which play a vital role in identifying opportunities and tackling barriers to the fullest possible are greatly valued by business in both countries.
Ambassador Zheng: I personally discussed this issue with some British government officials. We’re fully aware of the interest on the part of the British side. The EFD and the China-UK Joint Trade and Economic Committee are both important mechanisms for promoting cooperation between our two countries. So, we are prepared to stay in close touch with the British side. As to when to hold a new round of the dialogues, I also made it very clear. I stressed the point that a sound political environment is of utmost importance to our bilateral dialogues and cooperation in the economic and financial field. So it is our hope that the UK will join hands with China, work in the same direction, to foster a favourable environment that enables the dialogue and cooperation in all sectors to move forward.