UK hopes for more trade ties with China
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.