China and the World

By George!

Osborne tours China, promising a “golden decade”

George Osborne

Westminster’s chief China bull?

In 2010 a 100-part radio programme caused a stir in Britain. Co-conceived by the BBC and the British Museum, A History of the World in 100 Objects was devised as an accessible way to learn about the history of human civilisation – deliberately without prejudice or favour to any single geography (i.e. without too much focus on Europe, a tendency of past projects).

Narrated by the silkily-voiced head of the British Museum, Neil MacGregor, the concept was brilliantly simple. In each 15-minute broadcast he focused on a single object from the museum’s collection, explaining its significance to humankind’s development.

The oldest object was the Olduvai stone chopping tool (from Tanzania) which is about 2 million years old. One of the most recent items was an HSBC credit card (the subject of the penultimate programme in the series, which explored how money and shopping habits have evolved).

More Chinese items featured among the 100 objects than from any other country and MacGregor was in China this week to announce that the British Museum will exhibit all 100 items in Beijing’s National Museum and later in Shanghai. He said it’s the centrepiece of “the first-ever UK-China year of cultural exchange” (other examples include performances in Beijing of the UK play War Horse, in Chinese).

MacGregor is visiting China as part of a delegation led by the British Chancellor of the Exchequer, George Osborne, journeying alongside industry bosses, as well as civic leaders from councils like Manchester and Liverpool, which are actively seeking Chinese investment.

Osborne has long been bullish about the prospects for Sino-British business ties, telling reporters this week that he wants the UK to be “China’s best partner in the West.”

For those in the media pointing to China’s recent slowdown and its summer of market turbulence, there was also the rebuke that they were missing the bigger picture: “Even if China is not growing by double digits in the way it once did, it is still creating an economy the size of the UK over the next five years, so it is a massive source of global growth going forward.”

“Whatever the headlines, regardless of the challenges, we shouldn’t be running away from China,” Osborne repeated during a speech at the Shanghai Stock Exchange this week. “Let’s stick together to grow our economies.”

The chancellor – now the bookmakers’ favourite to succeed David Cameron as prime minister – is arguably the most pro-Chinese politician in the UK. For instance, he is said to have been the key player in London’s decision to break ranks with Washington and sign up as a member of the Chinese-backed Asian Infrastructure Investment Bank earlier this year. And on the current trip he has spoken excitedly about a “golden decade” of relations with China, announcing 53 new agreements at a Sino-British business forum in Beijing.

Among the more eye-catching of the initiatives was news that China will issue short-term renminbi-denominated government bonds in London, and that it would be exploring direct trading links between the Shanghai and London stock exchanges. “I want the UK to be the natural Western hub for renminbi trading,” Osborne said.

Also significant: that Chinese firms will invest in two new nuclear power plants in the UK, one using French equipment at Hinkley Point in Somerset and the other at Bradwell in Essex, relying on Chinese-developed technology.

The Essex project is seen as a particular boon for China’s nuclear sector. If it gets the stamp of approval in a highly-regulated market like Britain, it should be easier to sell reactors to countries elsewhere.

Not everyone approves of Osborne’s BFF (‘best friends forever’) strategy in China. Reports in the British media have suggested that Chinese agreement to help finance the Somerset reactor is conditional on the UK allowing Chinese companies to construct their own nuclear plant in Essex, and Nick Butler, a visiting professor at King’s College London, was particularly sceptical about the nuclear deals in the Financial Times this week. “There is, it seems, no limit to the lengths to which George Osborne is prepared to go to please China,” he warned.

Meanwhile, Osborne’s Chinese odyssey also took him to Xinjiang, making him the first UK minister to visit the starting point of China’s ‘Silk Road’. Britain must “raise its game” in exports to the China market, he insisted, from £25 billion ($38 billion) to £30 billion a year. Symbolically, he arrived in Urumqi on a high-speed train, with Sky News reporting Osborne later invited the Chinese to bid for the UK’s HS2 bullet train line.


© ChinTell Ltd. All rights reserved.

Exclusively sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.