Xi`s UK visit illustrates principles for correct state-to-state ties

John Ross

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Xi`s UK visit illustrates principles for correct state-to-state ties


By John Ross    Source: China Daily    Published: 2015-10-19


President Xi Jinping shakes hands with visiting British Prime Minister David Cameron in Beijing, Dec 2, 2013. [Photo/Xinhua]

Xi Jinping`s state visit to Britain from October 19 to 23 is important itself, but it also illustrates clearly the basis for mutually beneficial relations between very different countries. The visit is also part of a process showing the principles by which differences between countries should be overcome.

Contemporary China and Britain differ strikingly. China is the world`s largest country by population, the world`s second-largest economy at current exchange rates, the world`s largest economy at Parity Purchasing Powers (PPPs) and a country which has not only been increasing in weight in the world but is clearly only at the beginning of its rise.

Britain has approximately one twentieth the population of China, being an `upper medium` country by that measure- 22nd in the world. Britain remains a significant economy but is outside the `super heavyweight` league of the US and China – Britain`s GDP ranks 5th in the world at current exchange rates and 10thin PPPs.

For many centuries Britain was the world`s largest economy and most powerful state, but this position has now been taken by the US and increasingly by China. However due to its long period of development Britain retains a standard of living China is still developing towards – Britain`s per capita GDP in PPPs is almost three times China`s.

But these striking differences draw attention to the fact that, understood from a fundamental viewpoint, it is not the similarity of nations that can provide the most fruitful interaction but their differences. Xi Jinping`s visit will illustrate that.

To start with the economic differences, China is now the world`s largest industrial producer, having overtaken the US, the world`s largest goods trading nation, and runs a large surplus on manufactured trade. Britain has undergone one of the sharpest declines of manufacturing as a proportion of its economy of any country and has been running a deficit on manufactured trade for many decades, but has a large trade surplus in financial and other services.

Even within manufacturing the contrast is striking – Britain`s remaining manufacturing sector is concentrated in very high value added products, such as pharmaceuticals, while China is by far the most efficient world producer of an increasingly broad range of manufactured products. The result is that the two economies are complementary rather than directly competing – a vivid illustration of international trade principles of division of labour and comparative advantage.

Due to these complementary features economic interaction between the two countries is dynamic. Britain is China`s second largest EU trading partner, while China is Britain`s fourth largest trading partner. Britain is the second largest receiver of China`s foreign investment within the EU and also the second largest EU investor in China. Trade between the two countries in 2014 rose by 15 percent.

There is therefore no doubt what constitutes an economic `win-win` solution for both sides. Britain sees big opportunities to use its skill and international position in global financial services to win business from China. London is the world`s largest centre for foreign exchange dealing – bigger than New York and Tokyo combined. This puts Britain in a strong position to win business from China in establishing the RMB as an international currency – a development which is also in China`s interest. It is reported London will become the first centre outside China in which Chinese government RMB denominated debt will be issued.


An indication of the importance Britain attaches to economic relations with China is the way it rejected US advice to boycott the Asian Infrastructure Investment Bank. China, in turn, is highly interested in using its expertise and finance to invest in British infrastructure projects. Over a fifth of Britain`s power generation capacity has to be replaced in the next decade and on a recent trip to China British Chancellor of the Exchequer George Osborne announced opening of bidding for the projected $17 billion High Speed Two rail link – contracts potentially of great interest to China which now has the world`s largest high speed train system with corresponding accumulated expertise.

The opportunities for cultural, educational and `people to people` exchanges are equally enormous. Shakespeare, Agatha Christie, Harry Potter and other classic and modern British icons are well known and welcome cultural imports in China. Unfortunately Britain`s understanding of China lags behind China`s understanding of Britain - as China`s former Ambassador to Britain Fu Ying remarked: `there is a lack of authentic and objective information about China in Western societies, compared with what we know in China about the West.`

This applies to culture, where Britain`s knowledge of modern Chinese developments, is insufficient but enormous queues for exhibitions such as the British Museum`s of the Xi`an terracotta warriors, and events such as the National Gallery`s exhibition regarding Qing dynasty Emperors, show deep interest in Chinese classical culture. There was considerable and highly favourable media coverage in Britain of the award of the Nobel Prize for medicine to Tu Youyou. China`s rise will therefore produce increasing British knowledge of China`s modern achievements.

Regarding education the situation has existed for a long time that there are more Chinese students studying in British universities than from any foreign other country. But a new trend is the rapid rise in teaching of Chinese in British schools. Clearly indicating this it has become a status symbol to declare one`s children are learning Chinese. British Chancellor George Osborne recently announced: `I see it at home in Downing Street every night as my 12-year-old daughter does her Mandarin homework.`

The opportunities for `win-win` benefits for both countries in numerous fields are therefore enormous.

There have also been frequent exchanges between the two governments, leading to warming relations. David Cameron visited China earlier this year and on a recent visit George Osborne declared that Britain wanted to be China`s `best partner in the West.` For Xi Jinping`s visit Britain is doing its utmost to roll out the red carpet (literally and metaphorically) in according China`s president the highest possible protocol by inviting him to stay at Buckingham Palace. Clearly Britain is doing everything possible to overcome the problems in relations and China is responding to this. Both sides gain as a result.

From going through a difficult period China-Britain relations currently show rather a model of how different countries should interact. It is the differences in economies, not similarities that can make mutual trade and investment so fruitful. The principle of non-interference in internal affairs must be safeguarded on both sides. And as regards cultural and people-to-people interaction the situation was very accurately expressed by China`s President:

`civilizations are equal, and such equality has made exchanges and mutual learning among civilizations possible. All human civilizations… have their respective strengths and weaknesses. No civilization is perfect on the planet. Nor is it devoid of merit. No single civilization can be judged superior to another… All achievements of civilizations deserve our respect and must be cherished. History proves that only by interacting with and learning from others can a civilization enjoy full vitality.`

Fortunately these principles are currently informing British-China relations – to the benefit of both countries.

The author is a Senior Fellow at Chongyang Institute for Financial Studies, Renmin University of China.