David Cameron led Britain’s biggest-ever trade mission to China this week in a bid to drum up demand for British exports. In a visit intended to draw a line under a period of frosty relations following his meeting with the Dalai Lama last year, he also backed China’s call for a free-trade deal with Europe.
Britain urgently needs to boost exports. As Peter Spencer of the Ernst & Young Item Club pointed out, despite sterling’s sharp slide, export volumes have only grown by 17% in the past four years, compared to 34% in Germany.
And the logic behind Cameron’s China visit is “unassailable”, said The Times. For starters, “the dividing line between China’s public and private sectors is blurred”, so “political impetus from London” can play an important role in securing access to Chinese businesses for British chief executives.
China’s economy is so big that a 1% rise in our share of Chinese imports could wipe out our trade deficit. And China is now concentrating on rebalancing its economy away from manufacturing for export towards bolstering domestic demand. That bodes well longer-term for the areas in which Britain excels, said The Times: business and financial services, and creative industries. The Chinese middle class is currently buying BMWs and Bosch washing machines. Soon it should develop a taste for UK “fashion and financial instruments”.
Note too that trade in services to China is worth just 10% of the trade in goods, said The Daily Telegraph. A new digital and media alliance alone, agreed this week, could be worth £2bn over the next five years. Throw in the Chinese leadership’s recent moves to liberalise the economy further, and the rewards for Britain from closer links to China “could be huge”.