UK hopes for more trade ties with China

China Daily European Weekly - - Business - By CECILY LIU [email protected]­nadai­

The United King­dom is ready to work with China to foster in­clu­sive growth and cham­pion open trade at a time of shift­ing global bal­ances, ac­cord­ing to the newly in­stalled lord mayor of Lon­don.

Peter Estlin, 57, spoke with China Daily at his Man­sion House of­fice, lo­cated in the city’s fi­nan­cial dis­trict, three weeks af­ter tak­ing of­fice as the 691st lord mayor. Not to be con­fused with the mayor of Lon­don, the lord mayor’s main role is to rep­re­sent, sup­port and pro­mote the busi­nesses and res­i­dents of Lon­don. These busi­nesses are mostly in the fi­nan­cial sec­tor.

“The de­sire is to drive to­ward free trade, re­move the bar­ri­ers, re­duce poverty … al­low a greater de­gree of col­lab­o­ra­tion, re­spect sovereignty and re­spect com­mu­nity, that’s what we’re look­ing to do as we move for­ward,” he says.

The cen­turies-old grand tem­ple por­tico and or­nate ban­quet­ing hall of Man­sion House are re­minders of the by­gone era of the Bri­tish Em­pire, but Estlin ac­knowl­edges that the world has changed.

Do­mes­ti­cally, Lon­don is fight­ing to main­tain its sta­tus as a lead­ing global bank­ing cen­ter amid Brexit un­cer­tain­ties, and in­ter­na­tion­ally the UK is de­fend­ing its in­her­ent val­ues of mar­ket open­ness at a time of trade fric­tions and pro­tec­tion­ist pres­sures.

Estlin’s role as lord mayor is to be an am­bas­sador for Lon­don’s fi­nan­cial ser­vices sec­tor, help­ing the City of Lon­don Corp forge in­ter­na­tional part­ner­ships. In March, he will be do­ing just that when he leads a Bri­tish del­e­ga­tion to China to meet with fi­nan­cial com­pa­nies and reg­u­la­tors to dis­cuss fur­ther co­op­er­a­tion op­por­tu­ni­ties.

The day-to-day con­cerns of the city set the tone for his daily agenda, but Estlin says he wants to take a longert­erm view to strengthen mul­ti­lat­er­al­ism and con­nec­tiv­ity. As such, he says, the UK and China have much in com­mon. He high­lights the Chi­napro­posed Belt and Road Ini­tia­tive, as a great plat­form to foster shared and sus­tain­able de­vel­op­ment.

“BRI is not sim­ply about in­fra­struc­ture. Projects also con­trib­ute to lo­cal economies, and help teach lo­cal work­ers skills in con­struc­tion and other ar­eas,” says Estlin, adding that such up­skilling is al­ready hap­pen­ing in mar­kets such as Pak­istan, where many BRI projects have been built in re­cent years.

The BRI, pro­posed by Pres­i­dent Xi Jin­ping in 2013, ad­vo­cates im­proved con­nec­tiv­ity of in­fra­struc­ture, trade, ideas and knowl­edge among coun­tries and re­gions.

In re­cent years, the City of Lon­don has ac­tively branded it­self as the BRI’s fi­nance hub, in an ef­fort to se­cure deals and hedge against the pes­simism sur­round­ing Brexit. Last month it joined the re­search arm of China’s cen­tral bank to launch a new re­port high­light­ing the role of Lon­don and other global fi­nan­cial cen­ters in fi­nanc­ing BRI projects.

The re­port found that since 2013, more than 4,500 BRI projects have been fi­nanced glob­ally, with their ex­pected to­tal pro­ject value ex­ceed­ing $5 tril­lion (4.4 tril­lion eu­ros; £3.9 tril­lion). A num­ber of Bri­tish banks are heav­ily in­volved in the projects’ fi­nanc­ing. For ex­am­ple, Bri­tain’s Stan­dard Char­tered funded more than 50 BRI deals in 2017 alone, and last De­cem­ber it an­nounced an ad­di­tional $20 bil­lion com­mit­ment to BRI projects by 2020.

A banker by trade, Estlin has en­joyed a dis­tin­guished ca­reer at Salomon Broth­ers Asia, Cit­i­group and Bar­clays. His work has taken him to China nu­mer­ous times, giv­ing him an in­sight into the coun­try’s eco­nomic trans­for­ma­tion over re­cent decades.

His first visit was in 1998, 20 years af­ter the im­ple­men­ta­tion of the re­form and open­ing-up pol­icy, which changed China from a planned econ­omy to a mar­ket-driven one, al­low­ing in­ter­na­tional com­pa­nies greater ac­cess.

He says that back then China, struck him as “much more cau­tious” in its ap­proach to both do­mes­tic pol­icy and grow­ing in­ter­na­tional en­gage­ment.

“If I do the com­pare and con­trast, China in 1998 was more ori­ented to­ward its do­mes­tic agenda,” he says.

Three years later, in 2001, China joined the World Trade Or­ga­ni­za­tion, an event that paved the way for China’s rapid ex­port-led growth. “To­day, China’s role on the in­ter­na­tional stage is far more prom­i­nent and de­served,” he adds.

In 1978, the size of China’s econ­omy was just one-40th of that of the United States, but dur­ing the past 40 years, China’s GDP has grown by an av­er­age of around 9.5 per­cent a year. By 2017, the size of China’s econ­omy had grown to more than three-fifths that of the US, ac­cord­ing to In­ter­na­tional Mon­e­tary Fund es­ti­mates.

With eco­nomic growth, China also took a lead­er­ship role on many multi­na­tional is­sues. Key ex­am­ples in­clude China’s com­mit­ment to the Paris Agree­ment on cli­mate change, and cham­pi­oning of glob­al­iza­tion by open­ing up its mar­ket for greater in­ter­na­tional ac­cess through ini­tia­tives such as the China In­ter­na­tional Im­port Expo in Shang­hai in Novem­ber.

In­evitably, such en­gage­ment has led to closer co­op­er­a­tion be­tween China and the UK.

The UK was a coun­try of honor at the CIIE, and ac­cord­ing to Bri­tish gov­ern­ment es­ti­mates, the hun­dreds of Bri­tish com­pa­nies that at­tended the expo jointly se­cured around £2 bil­lion ($2.5 bil­lion; 2.2 bil­lion eu­ros) worth of or­ders. There are many other ex­am­ples of col­lab­o­ra­tion, es­pe­cially in the “golden era” of re­la­tions since Pres­i­dent Xi’s state visit to the UK in 2015.

Estlin says meet­ing Xi in Lon­don in 2015 al­lowed him to un­der­stand China’s strong in­ter­na­tional com­mit­ment.

“He showed China’s in­ter­est in want­ing to help set an in­ter­na­tional frame­work and a recognition that if China is to con­tinue to grow, growth has to take place in­ter­na­tion­ally. We con­tinue to be grate­ful to China for open­ing up its mar­kets and the coun­try has promised to look fur­ther at lib­er­al­iza­tion, to en­cour­age more peo­ple to in­vest in China, which cre­ates a sense of par­tic­i­pa­tion and a richer di­a­logue,” he says.

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