1. China and the United Kingdom:
A Golden Era of Partnership
THE PEOPLE’S REPUBLIC OF
CHINA
O F F I C I A L R E P O RT
PUBLISHED BY FIRST TO MARK THE STATE VISIT OF HIS EXCELLENCY
XI JINPING, PRESIDENT OF THE PEOPLE’S REPUBLIC OF CHINA
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6. www.chinachamber.org.uk
Golden Era of UK-China Relationship
中 英 关 系 黄 金 时 代
及全体会员 with all CCCUK members
CHINA CHAMBER OF COMMERCE IN THE UK
WELCOMEPRESIDENTXIJINPING
热烈欢迎习主席访英
英 国 中 国 商 会
8. FIRST
6
SPONSORED STATEMENT
HE YU
Chairman of the Board,
Professorship Senior
Engineer,
PhD of Management
Science,
Chairman General
Nuclear Power
Corporation
By HE YU
Chairman of the Board, China General Nuclear Power Corporation
CGN’s activerole in UK nuclearsector
All six generating
units of Daya Bay
Nuclear Power Plant,
operated by CGN, have
been working safely and
stably since 1994
A
s China’s largest nuclear power operator
and the world’s largest nuclear power
construction company, China General
Nuclear Power Group (CGN) is committed
to being a leading global clean energy and service
provider. ‘Developing clean energy to benefit society’ is
our core value, and our vision is to be a world-class clean
energy company.
CGN debuted with the Daya Bay Nuclear Power
Plant. By the end of September, 2015, CGN had
fourteen nuclear power plants in operation or ready
for commercial operation, with a total generating
capacity of 14.92 GW. Safety techniques at nuclear
plants currently in operation meet international
standards in all indices. Twelve plants with a total
capacity of 14.45 GW are under construction,
accounting for roughly 20 per cent of the total global
capacity of plants under construction.
On the technology front, CGN and China National
Nuclear Corporation jointly designed the domestically-
developed, third-generation million-kilowatt class
nuclear power technology known as Hualong One to
contribute to the national nuclear power development
plan and aid our own ‘going out’ efforts. CGN has
also established specialised nuclear power production,
construction, R&D, and fuel supply security systems
in line with international standards, which can develop
in conjunction with other clean energy areas such as
wind power, hydropower, solar power, and energy
conservation industries.
In recent years, CGN has seized the opportunities
presented by the international nuclear power market
recovery to steadily expand into the international
marketplace. On 30th June 2015 in Paris, the Chinese
and French governments signed a joint statement
on nuclear cooperation indicating that a group of
Chinese enterprises led by CGN will cooperate
with French counterparts on the construction and
operation of three new nuclear power plants in the
UK. The CGN-led China team will support and
take part in Hinkley Point C and two EPR reactor
projects, and will work on the predevelopment phase
of Sizewell C. EDF will support and participate in
another UK nuclear plant development project led by
CGN, and conduct applicability design modifications
based on Hualong One technology, primarily to meet
the safety requirements of the Office for Nuclear
Regulation (ONR), the UK’s independent nuclear
regulator authority, as well as to make the reactor
more competitive. Starting out with the aim of
mutual benefit, further partnerships, including the
development of large- and medium-sized reactors,
will be undertaken with the aim of developing markets
in other countries.
Negotiations for CGN’s UK project are progressing
smoothly. The ONR will shortly commence its Generic
Design Assessment process for Hualong One; CGN
also submitted Hualong One for a technology and
safety design review by the EUR (European Utility
Requirements) Committee earlier this year.
Phase II of CGN’s Fangchenggang Plant, an example
of Hualong One technology and the model for the UK
project, is expected to begin construction later this
year. Design documents, equipment procurement
and supply, and site preparation are proceeding
smoothly, according to plan, and good progress
is being made on project approval and licensing,
fulfilling the conditions for ground breaking in 2015
and subsequent construction. Construction of Phase II
will benefit equipment manufacturing export driven
by domestically-developed technology, and establish
a strong foundation for close cooperation with the
nuclear power sector in Africa, West Asia, Central and
Eastern Europe, Southeast Asia, and the UK.
In November 2014 and April 2015, a CGN-led
group of Chinese firms and EDF jointly held supply
chain conferences in Shanghai and Beijing for the
new UK nuclear power project, with the aim of giving
Chinese enterprises an opportunity to take part in
the UK project and to promote mutually beneficial
cooperation with France. F
9. Foreword by
Rupert Goodman dl
Chairman and Founder
FIRST
I
t gives me great pleasure to introduce
this Official Report on China to
mark the State Visit of President
Xi Jinping to the United Kingdom.
Lord Hurd and I are especially grateful to
His Excellency Liu Xiaoming, the Chinese
Ambassador, and his staff for all their help
and guidance in the preparation of this
report. We are also very grateful to the
Prime Minister, David Cameron and the
President, Xi Jinping, for contributing
such important and personal messages to
this Official Report.
The strength of the United Kingdom’s
strategic partnership with the People’s
Republic of China has also been underlined
by the successful visits of the Prime
Minister, Chancellor George Osborne,
the Foreign Secretary and the Mayor of
London, Boris Johnson. The Duke of
Cambridge made an important visit earlier
this year and Lord Maude, the Trade
Minister, has just returned from China.
The President’s State Visit to the
United Kingdom, with its full schedule,
is particularly timely and will help focus
the attention of business leaders and
policy makers on the many investment
opportunities that exist in China.
China is the world’s second largest
economy, its biggest exporter and the
second largest importer of goods and
services, accounting for around 10 per
cent of total world trade. Despite global
economic turbulence, China’s expansion
record continues with a GDP growth
rate of 6.7 per cent predicted for 2016.
Expanding our international trade and
investment links with China is playing
an important role in the government’s
economic and financial strategy.
The growth in trade and investment
between the United Kingdom and China
has been impressive; last year UK exports
to China were over £12.5 billion and
China was the UK’s 6th largest goods
export market. The UK also attracted
some US$12 billion of Chinese foreign
direct investment in 2014 – more than
France and Germany combined. London
accounts for two thirds of offshore
renminbi payments outside mainland
China and Hong Kong.
China’s growth and development
provides important opportunities for
further strengthening the bilateral
business relationship. The United
Kingdom’s high technology and research-
based industries will find opportunities to
co-operate further with Chinese partners.
Britain’s financial and banking services,
as well as the retail and creative sectors,
will identify enormous opportunities
as China’s consumers increase their
purchasing power. Both countries also
share the desire to move to low-carbon,
sustainable economies. To Chinese
business leaders the United Kingdom
represents an ideal gateway to Europe for
Chinese exports and investment.
The United Kingdom-China strategic
partnership also covers significant co-
operation in education – over 130,000
Chinese students study in Britain and an
increasing number of British students are
attending courses in China. These links in
education are paving the way for greater
cultural and scientific exchange, to both
nations’ mutual benefit.
The State Visit of President Xi Jinping
to the United Kingdom, while providing
an opportunity for private discussions,
will give us all an opportunity to study
the important developments in China
and to weigh carefully the opportunities
for our countries to work together even
more closely.
We at FIRST are delighted to have
been asked to produce this official
publication to mark the State Visit and
hope that it contributes, in a small way, to
its success and the further development
of the bilateral relationship, especially in
trade and investment. F 07
CHINA
FIRST
10.
11. Please convey my warm thanks to all at FIRST Magazine for your loyal
greetings, sent on the occasion of the publication of an official report to mark
the forthcoming State Visit of the President of the People’s Republic of China
to the United Kingdom.
I look forward to welcoming His Excellency Xi Jinping and to the
opportunity which this visit gives us to strengthen the ties that already exist
between our two countries.
12.
13. FIRST
11
CHINA
Message from
His Excellency Xi Jinping,
President of The People’s Republic of China
O
n the occasion of my State Visit to the
United Kingdom, I would like to extend
my sincere greetings and best wishes to the
British Government and the British people
through FIRST Magazine.
The Chinese and the British are both great peoples. We
have long histories and outstanding cultures, and we share
a determined pursuit of new developments and progress
in accordance with the times. Despite the geographical
distance between China and the UK, our peoples feel
close as each is drawn to the other’s literature and arts,
and science and technology. Since the establishment of
the comprehensive strategic partnership between our
countries in 2004, substantial progress has been made in
bilateral relations, with remarkable achievements in all
the areas of cooperation, including economy and trade,
education, science and technology, culture, climate change,
and energy. China is willing to work with the UK to foster
new growth points and to provide new impetus that will
facilitate the common development of our two countries
and deepen our comprehensive strategic partnership.
This year marks the 70th anniversary of the World
Anti-fascist War and the founding of the United
Nations. China and the UK have each held a series
of commemorative events. Seventy years ago, our
two countries joined in the building of the post-war
international order based on the UN Charter, and we
have since worked together to maintain that order.
It is my hope that the Chinese and British peoples
will carry on our joint efforts in defense of the fruits
of the victory in the World Anti-fascist War, that we
will uphold the purposes and principles of the UN
Charter, and that we will promote the building of a
new type of international relations based on win-win
cooperation.
Looking to the future, China wishes to join hands
with the UK as we press forward in a spirit of mutual
respect and equality and as we pool our efforts in
the drive for mutually beneficial results. Let us work
together to open a new chapter in China-UK relations,
to create new prospects for productive cooperation, and
to build a new model of state-to-state relations. F
His Excellency Xi Jinping,
President of The People’s Republic of China
19. FIRST
17
CHINA
Message from
The Rt Hon David Cameron mp,
Prime Minister of the United Kingdom
Rt Hon David Cameron mp,
Prime Minister of the United Kingdom of Great Britain and Northern Ireland
I
am delighted to welcome President Xi Jinping and his
wife Madame Peng Liyuan on a State Visit to the United
Kingdom – the first by a Chinese leader for ten years. It
will help to pave the way to a new golden era for UK-
China relations, as we build a global partnership fit to tackle
the challenges of the 21st Century.
This visit follows my own visit to China in 2013 and
will continue what has been an extremely important and
constructive year for our relationship with China. His Royal
Highness The Duke of Cambridge made his first visit to China
in March, the most senior member of the Royal Family to visit
since Her Majesty The Queen in 1986. This has been followed
by a series of high-level meetings, including a visit to the UK
by Vice Premier Madame Liu Yandong to build our people-
to-people links, and visits to China by the Foreign Secretary
and the Chancellor of the Exchequer.
The State Visit will showcase the best of the UK-China
relationship, building our global partnership, increasing
our trade and investment links and strengthening our
economies for the future.
We have made great progress since the last State Visit, by
President Hu Jintao, in 2005. The value of UK exports has
quadrupled and we are now the second largest European
exporter to China, as well as the second largest European
investor in China. In the last five years, Chinese investment
in the UK has grown by an astonishing 85 per cent per
year, and the UK has become the leading major European
destination for investment from China, with almost 30 per
cent of the total last year.
Our people-to-people ties have grown rapidly. We have
135,000 Chinese students studying in Britain; and last year,
more than half a million Chinese visitors came to the UK.
We have also expanded our diplomatic networks, with new
Consulates General in Wuhan and Belfast and boosted our
regional links, most recently when civic leaders from the
North of the UK took part in the Chancellor’s trip to China.
Globally, China and the UK have worked together with
other partners on urgent and important shared challenges.
Following the outbreak of the Ebola virus, the UK and
China were among key countries leading the response
in Sierra Leone. The UK was the first major European
country to become a prospective founding member of the
Asian Infrastructure Investment Bank. And as members of
the P5, we helped to broker the Iran nuclear deal.
I look forward to discussions with President Xi to build
on these successes, and to welcome him and Madame Peng
to Chequers as well as accompanying him on a visit to
Manchester. During the visit the President will see, first-
hand, some of our cooperation in action. I hope that, as
well as being the highlight of a special year, this visit will
mark the beginning of an even stronger partnership of
constructive engagement between our two countries. F
20. For the easiest major economy in Europe to do
business in, with a dynamic location and stable
investment environment, choose the UK.
gov.uk/ukti
23. Message from
The Rt Hon George Osborne mp,
Chancellor of the Exchequer and Second Lord of the Treasury
21
FIRST
CHINA
FIRST
T
his year is set to mark the start of a truly
golden age in UK-China relations. The
recent annual Economic and Financial
Dialogue was a real success, making
considerable progress on a number of high priority
issues across trade, investment and financial services.
I am confident that, as the Queen and Prime Minister
welcome President Xi and Madame Peng to the UK for
this historic State Visit, our two nations will take another
big step forward together.
The UK and China are clear natural partners for
growth, and continued collaboration and engagement
is good for both countries. As China continues to grow
and implement its ambitious reform plans to rebalance
its economy, British businesses become increasingly well
placed to provide the products and services that China
wants to consume. As the world’s global financial centre,
Britain can support China’s important financial reforms.
And we both gain from a vibrant and open exchange of
ideas, science, culture and people.
We also make excellent partners in building the
economies of the future: Chinese companies have already
invested in the Northern Powerhouse and we welcome
others to do the same, while our early membership of
the Asian Infrastructure Investment Bank is an important
example of the UK’s commitment to supporting
President Xi’s One Belt One Road initiative – a modern-
day Silk Road to transform connectivity from China,
across Asia to Europe.
By maintaining a high level of ambition on both sides,
I am confident that this will be a golden era for the UK-
China relationship for many years to come. F
Rt Hon George Osborne mp
Chancellor of the Exchequer and
Second Lord of the Treasury
24. FIRST
22
CHINA
T
his year is a significant one in the
global endeavour to enhance world
peace and development, and both
China and the UK play an important
role in driving this process.
First, this year marks the 70th anniversary of the
victory of the World Anti-Fascist War, an occasion
solemnly commemorated by China, the UK and
many other countries around the world in various
forms. An important lesson history teaches us is that
the arbitrary use of force and seeking domination
through raw power is no recipe for peace, and that
the logic of winner-takes-all and zero-sum game can
only block the development of human society. As our
world moves faster towards multi-polarity, economic
globalisation, cultural diversity and an information
society, countries are becoming increasingly
interdependent, and their interests are intertwined as
never before. We share a growing stake in each others’
wellbeing. Only peaceful development and win-win
cooperation is the right path we should pursue.
Second, this year also marks the 70th anniversary
of the founding of the United Nations. Last month,
world leaders gathered in New York to draw a
blueprint for creating a better future for mankind.
Chinese President Xi Jinping articulated China’s
vision of a new type of international relations. He
called for the pursuit of a five-pronged strategy
to build a community of shared future – namely,
forging partnerships in which countries treat each
other as equals, engage in mutual consultation
and show mutual understanding; jointly creating
a security architecture of equity and justice that
benefits all; promoting open, innovative, inclusive
and win-win development; increasing cultural
exchanges to promote harmony, inclusiveness and
respect for differences; and building an ecosystem
that puts nature and green development first. This
comprehensive proposition lays out a new vision for
the development of international relations.
Third, in building a new type of international
relations, China and the UK have every reason to
become good partners in cooperation. Both countries
have important influence in the world and are
permanent members of the UN Security Council. We
share similar views on many international and regional
issues, and our respective interests are converging.
The upcoming State Visit by President Xi Jinping
By H.E. WANG YI
Minister of Foreign Affairs, People’s Republic of China
Enhancing practical cooperation
WANG YI
holds a Master’s degree
in Economics. He has
worked as Assistant
Minister of Foreign
Affairs (1998-2001),
Vice Minister of Foreign
Affairs (2001-04),
Ambassador
Extraordinary and
Plenipotentiary of the
People’s Republic of
China to Japan (2004-
07) and Minister of
Taiwan Affairs in the
Office of the State
Council (2008-13).
He assumed his
current position as
Minister of Foreign
Affairs in 2013.
UK Foreign Secretary,
Philip Hammond, in
discussion with China’s
Foreign Minister Wang Yi
25. FIRST
23
China stands
ready to
strengthen
communication
and coordination
with the UK on
international
and regional
issues and
work together
to promote
peace and
stability
will be the second visit by a Chinese President to the
UK in 10 years, and it will be a historic visit marking
a new decade of China-UK comprehensive strategic
partnership. Undoubtedly, this visit will further boost
this partnership and enable China and the UK to take
fresh steps in building a new type of state-to-state
relations featuring win-win cooperation.
China and the UK should be good partners based on
equality and mutual trust. The history and reality of
our relations have repeatedly demonstrated that, despite
differences in social systems, stages of development,
history and culture, we can ensure continuous, steady
and sound growth of China-UK relations when we
respecteachotherandtreateachotherasequals,increase
political mutual trust and always view this relationship
from a long-term and strategic perspective.
China and the UK should be good partners for win-
win cooperation. The UK is China’s second largest
trading partner, second largest investment destination
and second largest source of paid-in investment in the
EU,andChinaistheUK’ssecondlargesttradingpartner
outside the EU and a major investment destination in
Asia. China has advanced the initiative of building the
SilkRoadEconomicBeltandthe21stCenturyMaritime
Silk Road and is working on the 13th five-year plan
for economic and social development. On its part, the
UK will create a Northern Powerhouse and has put
forward a roadmap for developing the manufacturing
sector between now and 2050. Our two sides should
form greater synergy between our respective strategies,
enhance practical cooperation in innovation-driven
growth, manufacturing capacity, and finance, so as to
deliver more benefits to our peoples.
China and the UK should be good security
partners. China and the UK maintain close
communication on counter-terrorism, peacekeeping
operations and cyber security. We jointly responded
to Ebola outbreak in West Africa, and played a
positive role in resolving regional hotspot issues such
as the Iranian nuclear issue and South Sudan issue.
China stands ready to strengthen communication
and coordination with the UK on international and
regional issues and work with the UK to promote
world peace and stability.
China and the UK should be good partners of
mutual learning. Our two countries are both major
civilisations with splendid cultures. Every year, over
one million Chinese and Britons travel between
our two countries; 160,000 students are studying
in each other’s countries, and we have forged sister
relations between 51 pairs of cities in the two
countries. This year is the first China-UK Year of
Culture Exchange. Many colourful events have been
held in both countries, which are warmly received
by the public. China will deepen people-to-people
and cultural exchanges with the UK and expand
exchanges and cooperation in tourism, and between
local areas, the youth and women to strengthen
people-to-people friendship.
An old Chinese poem reads, “Riding winds and
cleaving waves, I hoist sail at the right moment to
embrace the white clouds and vast ocean.” As a new
era dawns on us, China the UK should seize the
opportunity and forge ahead. Let’s take President
Xi Jinping’s visit as a new departure point to open a
golden era of the China-UK relationship. F
China’s Foreign Minister,
Wang Yi, meets with
UN Secretary General
Ban Ki-moon
26. FIRST
24
CHINA
I
n a few days’ time President Xi Jinping will visit
the UK. Both sides have high expectations of his
visit as it is the first visit by the President of China
to the UK in a decade, and will become a new
milestone in our bilateral relations. Through the visit,
the two sides will set forth new directions for the future
and enhance practical cooperation in various sectors so
as to bring the bilateral trade and economic relationship
to a new level. Although lying at the opposite ends of
the Eurasian continent, China and the UK developed
commercial ties a long time ago. The two sides began
trading in large volumes in tea, spices and silk as early
as the 17th century. After the founding of the People’s
Republic of China, Western countries were hostile
towards China and imposed a trade embargo. However,
in the summer of 1953, a group of visionary British
entrepreneurs came all the way to China, overcoming
great obstacles and the ‘Cold War Divide’, to sign the
first trade agreement with the New China, thus marking
the inception of the 48 Group Club. It reopened two-
way trade and built a bridge of economic cooperation
between the two countries. This trip, hailed as the
‘Icebreaker Mission’, has now become part of the history
of China-UK relations.
Over the past 62 years, with strong commitment
and support from the two governments and business
communities, our commercial ties have flourished, with
numerous new bright spots. Our trade and economic
exchanges have made substantial
progress in various areas, playing
an increasingly important role
in ensuring healthy and stable
bilateral relations. In recent
years, this economic relationship
has not only withstood the test
of the eurozone debt crisis
and the weak and unbalanced
recovery of the world economy,
but also yielded fruitful results,
becoming a major driving force
for the development of our
bilateral relations.
Presently the UK is China’s
second largest trading partner
in the EU, second largest
source of actualised investment
and second largest investment
destination, whereas China is the UK’s fourth largest
trading partner. Our two-way trade increases year by
year. In 2014, it reached US$80.87 billion, doubling the
US$39.16 billion five years ago and registering a 15.3
per cent year-on-year growth rate, the fastest in any of
China’s bilateral trade with its major trading partners
in the EU. In the first eight months of this year, despite
the marked decline in trade between China and
other European partners, China-UK trade remained
steady, which shows how stable and sustainable this
commercial relationship has become. The stock of
the UK direct investment in China rises steadily. By
the end of August 2015, the UK had 7,992 investment
projects in China, with an actualised investment of
US$19.61 billion; the stock of China’s direct investment
in the UK had also risen rapidly from US$1.35 billion
by the end of 2010 to US$12.8 billion by the end of
2014. Over 500 Chinese-funded enterprises have
established a presence in the UK. Meanwhile, the two
countries have conducted productive cooperation in
technological innovation, trade in services, regional
cooperation and joint exploration of third markets.
The China-UK commercial relationship has shown
a positive momentum characterised by steady growth
in two-way trade, deepened two-way investmentand
expansion into new areas of cooperation.
The UK was the first developed country to realise
industrialisation, while China is the world’s largest
By H.E. GAO HUCHENG
Minister of Commerce, People’s Republic of China
Building on historic ties
GAO HUCHENG
graduated from Beijing
International Studies
University, majoring
in French. He received
his Doctorate in
Sociology from the
Université Paris VII,
France in 1985, and is
also a qualified senior
economist. Having
served successively as
Assistant Minister at
the Ministry of Foreign
Trade and Economic
Cooperation, Vice
Chairman of Guangxi
Zhuang Autonomous
Region and Vice
Minister of Commerce,
he was appointed China
International Trade
Representative and Vice
Minister of MOFCOM in
July 2010. He assumed
his current position as
Minister of Commerce
in March 2013.
Workers assemble a
Range Rover Evoque at
Jaguar Land Rover’s £1
billion factory
in Changshu
27. FIRST
25
The
‘Icebreaker
Mission’
62 years
ago created
a close
connection
between
China and the
UK through
trade and
economic
cooperation
developing country. China and the UK share strong
economic complementarity, compatible cooperation
philosophies and enormous cooperation potential.
At present, China is drafting its 13th Five-Year Plan
for Economic and Social Development, with a focus
on a new round of opening up at a higher level, and
establishing a new, open economic system in an
expeditious way. The UK, always a champion of free
trade, has a highly open market and is committed
to promoting sustained economic growth. China’s
Belt and Road Initiative, the Asian Infrastructure
Investment Bank (AIIB), which the UK joined as a
founding member, and the Northern Powerhouse
Plan in England will all create more opportunities for
cooperation between enterprises of the two countries.
To seize this historic opportunity, further
promote bilateral trade ties and realise win-win
cooperation based on the complementarity between
our two business communities, the two sides need to
strengthen cooperation in the following areas:
1. Fully tap into the trade potential of the two countries.
We shall encourage Chinese export of high value-added
products to the UK, leverage Britain’s advantages in
high-end manufacturing, high technology and RD,
and identify new growth areas in trade in goods. In
the meantime, both sides should further promote
cooperation in trade in services such as technological
innovation, e-commerce, financial and legal services,
medicine and health, and creative industries, so that
trade in goods and services can grow at the same pace.
2. Deepen cooperation in investment and big projects.
The Belt and Road Initiative and the establishment
of the AIIB will further spur business cooperation in
infrastructure. Beginning with high-speed railway
and nuclear projects, the two sides should step up
cooperation in emerging industries such as life
sciences, satellite applications, new energies, new-
energy automobile and information technology,
and focus on accomplishing some demonstrative
landmark projects, so as to deepen cooperation in
two-way investment.
3. Strengthen cooperation between regional governments
and in third markets. The two governments should
establish a long-term mechanism for regional
cooperation and explore chances for business
cooperation in the Northern Powerhouse initiative.
Also, we need to combine China’s advantage in
equipment manufacturing and financing with
Britain’s advantage in innovation, management and
financial services, so as to boost cooperation between
our businesses in third countries and open up new
space for commercial cooperation.
4. Create a better environment for trade and
investment. I hope that the UK can continue to be
a proponent within the EU of high-tech exports to
China, an early conclusion of the China-EU bilateral
investment agreement and the early launching of a
joint feasibility study into a China-EU FTA, so as to
achieve sustainable growth in trade and investment.
The ‘Icebreaker Mission’ 62 years ago created a close
connection between China and the UK through trade
and economic cooperation. Six decades on, the two
countries have forged an all-dimensional, wide-ranging
and multi-tiered commercial relationship. As an ancient
Chinese poem goes, “When you hoist the sails to cross
the sea, you will ride the winds and cleave the waves.” I
hopethattheentrepreneursfromthetwocountriescould
carry forward the “Icebreaker Spirit”, and in today’s
world where profound changes are taking place on the
economic landscape, that they join hands to advance
together, reap the dividends that arise from China’s
continuedreformandopeningupandBritain’ssustained
economic recovery, and jointly embrace a “Golden Era”
in China-UK trade and economic relations. F
Huawei Technologies’
UK headquarters near
Reading: the company
is at the forefront of
Chinese investment in
the United Kingdom
28. FIRST
26
CHINA
T
he State Visit by the Chinese President Xi
JinpingtotheUKisanimportantmilestone
in our bilateral relations and has historical
significance on their future development.
Both China and the UK enjoy long histories
and splendid culture and are committed to the
development of their countries and the wellbeing of its
people. Since 2004 when the two countries established
comprehensive strategic partnership, cooperation
in all fields and at all levels has been continuously
expanded and strengthened. As an important
component of China-UK people-to-people exchange
and bilateral relations, our educational cooperation
currently covers a wide range from basic education
to higher education, of various forms and at various
levels. Remarkable achievements made from such
cooperation have extensive and positive influence
among the public and plays a vital role in promoting
China-UK relations.
Firstly, student mobility has been continuously
enlarged. Chinese students take the UK as an
important destination for overseas study while coming
to study in China is also an increasing trend in the
UK. The Chinese government plays an active role in
promoting student mobility and increasing Chinese
Government Scholarship every year. In 2014, China
announced the decision to send 10 thousand students
to study in the UK for the coming 5 years. In the single
year of 2014, China sent 2400 students and scholars
to the UK and received 224 students from the UK,
all sponsored by Chinese Government Scholarship.
By the end of 2014, Chinese students in the UK have
exceeded 150 thousand. To encourage studying in
China, the UK government has decided to support
80 thousand students to study or work as interns in
China from 2013 through 2020 with the launching
of “Generation UK”. The number of UK students
studying in China has reached over 6 thousand for the
year of 2014, showing quite considerable growth. The
two countries will continue to encourage and support
young people to study in the other country which not
only benefits their own personal development, but
also injects continuous momentum to the long-term
development of China-UK relations.
Secondly, cooperation programmes have been
effectively implemented. In basic education, secondary
school students in Shanghai scored high
in their first trial in PISA and hence
drew global attention to China’s basic
education. China and the UK then decided
to select and exchange maths teachers
from Shanghai and the UK since 2014.
In vocational education, the Shadowing
Programme provides access for principals
of secondary vocational schools to go
to sister schools and gain first-hand
experience by working side-by-side with
their counterparts. The pilot of the UK’s
modern apprenticeship programme and
cooperation in developing curricula are
also going on to enrich the whole range
of vocational education cooperation. In
higher education, the two sides support
the training of high-calibre talents
and cooperation in scientific research
by implementing the China-UK PhD
Candidates Partnership Programme.
The China Scholarship Council has also
initiated joint scholarships with leading
UK universities including Russell Group
By H.E. YUAN GUIREN
Minister of Education, People’s Republic of China
A deeper understanding
YUAN GUIREN
graduated from Beijing
Normal University
(BNU), majoring in
Philosophy. Over the
course of his career,
he has held a number
of senior positions
including Executive
Vice President of BNU,
Assistant Mayor of
Beijing, Director-General
of the Beijing Municipal
Education Commission,
and President of BNU.
He was appointed Vice
Minister of Education
in 2001 and assumed
his current position as
Minister of Education
in 2009.
HRH The Duke of
Cambridge opens the
Dickson Poon University
of Oxford China Centre
in September 2014
29. FIRST
27
China has
the largest
number of
English
learners and
UK has the
largest
number of
Confucius
Institutes and
Confucius
Classrooms
in Europe
members to send excellent Chinese students to study
in the best UK Universities.
China-UK cooperation in joint schools started early
and progressed smoothly. The Ningbo-Nottingham
University set up in 2004 and Xi’an Jiaotong-
Liverpool University established in 2006 are among
the first batches of joint schools approved by the
Chinese Ministry of Education and have now become
successful examples in this field. By the end of August
2015, 17 China-UK jointly run education institutions
and 240 joint programmes have been established
in China. Meanwhile, Chinese universities are
accelerating their pace of internationalisation. This
September, the Chinese Language School of Beijing
Normal University-Cardiff University was formally
established. It represents a positive exploration by
Chinese higher education institutions in setting up
joint education programmes and schools in developed
countries, and also another highlight in China-UK
educational cooperation.
Thirdly, collaboration in language teaching and
learning has been closer and deepening. Language is
a carrier for culture and means for exchange. China
has the largest number of English learners and UK
has the largest number of Confucius Institutes and
Confucius Classrooms in Europe. Both countries
attach great importance to the collaboration in
language learning and teaching. The UK government
has been determined to substantially increase the
number of learners of the Chinese language and also
to improve the learning quality. The Headquarter
of Confucius Institutes in China will also continue
to support the Confucius Institutes and Confucius
Classrooms in the UK.
Fourthly, policy exchange has been conducted on a
regular basis. Since 2004, the Ministries of Education
of both countries established a regular dialogue at
ministerial level (i.e. Education Summit). Every year,
both sides hold meetings to have in-depth exchange
on the latest developments in each others’ educational
reforms,andjointlydecidetheannualcooperativeplanto
provide guidance in promoting China-UK educational
collaboration. In 2012, the China-UK High-Level
People-to-People Dialogue was formally established.
The Education Summit, as the thematic dialogue under
this People-to-People Dialogue framework, enriches
the content of the Dialogue and hence facilitates the
People-to-Peopleexchangeofthetwocountries.During
the 3rd meeting of this People-to-People Dialogue and
Education Summit in 2015, 24 agreements and MoUs
were signed in the field of education.
As an old Chinese expression goes, “amity between
people holds the key to sound relations between the
states and can be achieved through their connection
of hearts and minds”. On the new historical turning
point, exchange and collaboration in education will
have a wider space and more promising future than
ever. The Chinese Ministry of Education is willing to
join hands with the UK to further expand and deepen
existing cooperation, promote understanding and
friendship between young people, and push forward
win-win cooperation in education so as to make
contribution to the development of the China-UK
strategic partnership. F
A teacher from Clover
Hill Community
Primary School in
Newcastle-Upon-Tyne
visits a school in China
while working for the
British Council
30. FIRST
28
By H.E. WAN GANG
Minister of Science Technology, People’s Republic of China
Partners in innovation
CHINA
WAN GANG
holds a PhD in
engineering. He is
Vice Chairman of the
12th Chinese People’s
Political Consultative
Conference (CPPCC),
Chairman of China
Zhi Gong Party, and
Minister of Science and
Technology. Over the
course of his career,
Professor Wan also
worked for the German
automotive company
Audi (1991-2001), and
as President of Tongji
University in China.
He was appointed as
Minister of Science and
Technology in April 2007.
C
hina President Xi Jinping will pay a State
Visit to the UK in the beautiful autumn
season of 2015, opening a golden age in the
bilateral relationship and a new chapter of
cooperation in science, technology and innovation (STI).
Both China and the UK highlight the importance of
the cooperation. The Intergovernmental Agreement
on Scientific and Technological Cooperation was
signed in 1978. Over the past 37 years, under the
joint efforts of the science communities, including
universities and research institutes, the two sides have
expanded mechanisms and innovated modalities of
collaboration, leading to fruitful outcomes for both.
The two sides have been continuously expanding
cooperation mechanisms, forming multi-tiered STI
platforms. Under the framework of China-UK High-
Level People-to-People Dialogue, steady progress has
been made in implementing the China-UK Research
and Innovation Partnership Fund, promoting
joint research and personnel exchanges. Another
example is the China-UK Economic and Financial
Dialogue, which has continuously strengthened
the collaboration in innovation and its application.
Since 1998, the two sides have held regular joint
commission meetings, pushing forward the STI
cooperation. All these high-level mechanisms have
not only driven the bilateral relationship in science
and technology, but also facilitated interaction among
scientists and engineers.
The two sides have been exploring new means of
cooperation and implementing the China-UK Research
and Innovation Partnership Fund. In December, 2013,
Prime Minister David Cameron visited China, jointly
announcing the establishment of the Fund with Premier
Li Keqiang. The Fund is a new model and a milestone
in bilateral STI collaboration. Over the past year
and more, the Fund has played an active role in basic
research, innovation cooperation, talent development
and regional innovation. This September, when China’s
Vice Premier Liu Yandong visited the UK, the two
sides signed an MoU on the UK-China Research and
Innovation Bridges Programme. This Programme will
give priority to strengthening ties among universities,
research institutes and enterprises.
Blue sky thinking:
China Museum
of Science and
Technology in Beijing
31. FIRST
29
President
Xi’s visit will
inject new
impetus in
to China-UK
innovation
cooperation
and open
up new
opportunities
for STI
development
In recent years, under the China-UK comprehensive
strategic partnership, Chinese and British universities,
research institutes, and hi-tech enterprises have been
very keen on innovation cooperation and made
outstanding achievements. For example, China
Railway Rolling Stock Corporation (CRRC) and its
British partner will jointly set up a China-UK Rail
Transit Technology RD Centre. At the same time
Huawei and the University of Surrey are collaborating
in 5G technology development. All these have helped
boost innovation cooperation in priority areas.
During President Xi’s visit to the UK, the two
sides will confirm cooperation items in antimicrobial
resistance, rail transit technology, climate change
and low-carbon technology, aeronautics, SKA,
astronomy and high-performance computing, and
agreed to strengthen cooperation among enterprises,
universities and research institutes with a focus on
technology application.
So far, win-win cooperation has become the major
theme of China-UK STI development. In the future,
China-UK STI cooperation is bound to enter a fast
track of development.
At present, boosting science, technology and
innovation has become an important approach to
enhancing economic competitiveness. The two sides
should seize opportunities to deepen STI cooperation
and build innovation partnership, which encompasses
the following aspects:
1. Highlighting China-UK cooperation and dialogue
in innovation areas. The two sides will prepare for
the establishment of a regular high-level innovation
cooperation dialogue on innovation strategy,
translation of research findings, ST policies, IPR,
health, agriculture and aerospace, and strive to build it
into an important platform for innovation cooperation.
2. Establishing China-UK joint labs or joint research
centers. On the basis of fruitful STI cooperation in
multiple areas, we can build a number of excellent
joint labs and research centres, so as to conduct
collaborative research in fundamental and strategic
areas of common interest.
3. Boosting China-UK technology and industrial
capacity cooperation. The United Kingdom is a science
powerhouse with solid research strengths, while
China is a big manufacturing country with an urgent
need for stable growth, economic restructuring and a
transformation of its development model. With high
complementarity in technology industrialisation,
the two countries should work together to explore
more efficient mechanisms of cooperation, facilitate
translation of research findings and boost industrial
capacity through ST cooperation.
4. Strengthening exchanges and cooperation between
China and UK science parks. Having accumulated
successful experience in science park development,
the two sides have great potential to work together
to facilitate ST innovation and entrepreneurship
activities.
I believe that President Xi’s visit will inject new
impetus in to China-UK innovation cooperation and
open up new opportunities for STI development. F
Here be dragons:
Shanghai’s Science and
Technology Museum
32. FIRST
30
CHINA
T
he year 2015 has witnessed extraordinary
progress in China-UK cultural relations,
and it ushers in the second decade of the
comprehensive strategic partnership
between the two countries. This year, the State Visit of
Chinese President Xi Jinping to the UK is also expected
to mark a new milestone for China-UK relations.
China and the UK are significant representatives
of the Eastern and Western civilisations, each
boasting a time-honoured history, splendid culture,
and remarkable contributions to the intellectual
endeavours of mankind. For a long period of time in
history, China and the UK have served as important
gateways for exchange and communication between
the East and the West.
The key to sound relations between nations lies in the
amity between their peoples. Intercultural dialogues
are essential for deepening mutual understanding and
recognition between the Chinese and British peoples.
Since the establishment of China-UK diplomatic
relations in 1972, the two countries have enjoyed a
sound and dynamic cultural relationship featuring
frequent exchange and cooperation. Collaborative
mechanisms have been constantly upgraded to expand
thecoverageandenrichthecontentofculturalexchange
programmes. Today, culture has become an important
pillar of the comprehensive China-UK relations.
Following the agreement on cultural cooperation
signed by the Chinese and British governments in
1979, executive programmes on cultural exchange
have been signed between the two sides on a regular
basis since 1984. In 2012, culture was identified as a
key area of cooperation, and its importance was further
confirmed within the framework of China-UK High-
Level People-to-People Dialogue, the first Dialogue
mechanism of its kind established between the People’s
Republic of China and an EU country.
Facilitated by inter-government cultural
cooperation mechanisms, more and more China-UK
cultural exchange and cooperation programmes are
being developed with contributions from various
social sectors and promoted in a market-oriented
manner under the guidance of the government.
Endorsed by the two governments, China and the
UK jointly presented various major cultural events,
including China Now and UK Now, which were
respectively held in the UK and China during the
2008 Beijing Olympic Games and 2012 London
Olympic Games. Both China Now and UK Now
focused on culture and creativity, and rolled out
a rich variety of activities covering culture, trade,
education, technology, and sports, to attach rich
cultural meaning to the Olympic Games and inject
new momentum into the progress of bilateral cultural
relations. This year, as a significant testimony of
strengthened ties between the two countries, the
China-UK Year of Cultural Exchange has been
carried out, during which the Chinese and British
sides agreed to exchange cultural seasons to showcase
the cultural diversity and celebrate the creativity
of both countries. The British Cultural Season was
opened in March, 2015 during the visit of the Duke of
Cambridge to China, when he added a final touch
to a Shaun the Sheep sculpture in a traditional eye-
dopping ceremony. With more than 30 creative and
cross-boundary modern arts programmes, the Season
offers the Chinese audience rich and diversified
experiences of the contemporary cultural and creative
development of the UK. In the second half of this
year, the Chinese Culture Season, themed Creative
China has been launched in the UK, presenting the
By H.E. LUO SHUGANG
Minister of Culture, People’s Republic of China
A culture of collaboration
LUO SHUGANG
studied Scientific
Socialism at the Renmin
University of China and
also holds a Master’s
degree from the Party
School of the Central
Committee of the
Communist Party of
China (CPC). Between
1986 and 2014 he held
a number of positions
including Director for
Policy and Legislation
Research and Director
General of the Bureau
for Political Theories
in the Publicity
Department of the
CPC Central Committee.
Within this department
he also served as Vice
Minister and Executive
Deputy Minister. He
assumed his current
position as Minister
of Culture in
September 2014.
Spring Festival
celebrations in
London’s Chinatown
33. FIRST
31
Despite being
geographically
distant and with
different social
systems and
historic
backgrounds,
China and the
UK are always
mutually
attracted by
each other’s
cultural
appeal
Chinese culture and creativity to the British public.
By jointly hosting such major cultural events, China
and the UK shared with each other their respective
traditions and latest development in the cultural
fields, and enhanced the mutual understanding and
friendship between the two peoples.
In addition to governmental support, direct
dialogue between the Chinese and British cultural
institutions, art societies and artists also ensure and
greatly foster the advancement of China-UK cultural
relations. It is delightful to see that in recent years,
various major Chinese and British cultural and arts
institutions have established sustainable and long-
term partnerships, facilitating the cultural exchange
and collaboration between the two countries in a
substantial way. Such institutions include the Chinese
National Museum, Palace Museum, National Library,
National Centre for the Performing Arts, and
National Theatre Company, and the British Museum,
the Victoria and Albert Museum, the British Library,
the Royal Opera House, and National Theatre of the
UK. In 2012 , Passion for Porcelain, a British Museum/
Victoria and Albert Museum Porcelain Collection
Exhibition was held in the National Museum of China
and in 2014, Ming: 50 Years That Changed China was
held in the British Museum, both attracting huge
public interest, and were very warmly received. As a
successful role model case in China-UK collaboration
in arts and the creative economy, the Chinese version
of the stage play War horse, a joint production of the
National Theatre Company of China and the British
National Theatre, is currently playing and highly
acclaimed in China.
As the China-UK cultural relationship intensifies,
professional and skill development become a new
focus. In 2014, a Memorandum of Understanding
between the Ministry of Culture of China and the
British Council on China-UK Arts and Creative
Industries Professional Development was signed to
develop different approaches towards professional
training and jointly identify different training options.
In 2015, the China-UK Workshop for Senior Museum
Management was successfully held in Beijing, at which
experts from the British Museum, Victoria and Albert
Museum, National Museum Wales, and Whitworth
and Manchester Museum conducted face-to-face
dialogues and discussions on museum-related issues
with about one hundred senior museum curators and
managers from all across China.
Cultural dialogues are about the communication
between hearts and minds. In the context of economic
globalisation, cultural exchange and cooperation play an
increasingly important role in international relations.
Despite being geographically distant and with different
social systems and historic backgrounds, China and
the UK are always mutually attracted by each other’s
cultural appeal. Such mutual appreciation provides a
solid foundation for the sustainable growth of bilateral
cultural exchange and cooperation. It is my sincere hope
thattheculturaladministrations,localgovernmentsand
cultural institutions continue to make concerted efforts
to encourage substantial and practical collaborations
between the Chinese and British art companies and
cultural societies in cultural, arts and creative industry
fields, and make further and greater contributions to the
deepening of the China-UK strategic partnership. F
Chancellor George
Osborne meets the cast
of the Chinese touring
production of War Horse
34. FIRST
32
CHINA
ZHOU XIAOCHUAN
graduated with a BE
degree from Beijing
Institute of Chemical
Technology in 1975
and received a PhD
in Economic Systems
Engineering from
Tsinghua University
in 1985. He has
held various senior
positions in the
Chinese government
and commercial banks,
including Vice President
of the Bank of China
(1991-1995), Deputy
Governor of the People’s
Bank of China (1995-
1998), President of the
China Construction
Bank (1998-2000) and
Chairman of China
Securities Regulatory
Commission(2000-2002).
Dr Zhou became
Governor of the People’s
Bank of China in 2002.
I
t is vitally important for China and the UK, an
emerging market economy and a mature one,
to step up our bilateral financial cooperation.
Our markets cooperating means that financial
resources will be used more efficiently, growth
dividends can be shared, and both the Chinese and
British people will benefit. It also promotes economic
and financial rule-making across the world.
In recent years, British and Chinese leaders
have worked together to make important strategic
decisions on bilateral financial cooperation.
Representatives of the financial sectors of the
two countries have worked together to identify
innovative potential areas for future cooperation. As
the comprehensive strategic partnership between
China and the UK enters into its second decade, the
financial communities of the two countries will build
on the momentum already established and join hands
to bring in a golden age of financial cooperation.
This bilateral financial cooperation has produced
fruitful results. In recent years, politicians, financial
experts, and academics in both countries have worked
closely in promoting pragmatic financial cooperation
through bilateral and multilateral channels. During
all seven rounds of the China-UK Economic and
Financial Dialogue, financial cooperation has
remained at the core of the agenda. The Dialogue
has meant policy communication and coordination
on macro-economic policy and financial regulatory
reform, as well as on the mutual opening of our
financial markets. At the same time, it has effectively
maintained monetary and financial stability, and
promoted sound and stable real economic growth.
Moreover, Chinese and British financial institutions
have entered each other’s markets to provide services
to the local economy. HSBC, Standard Chartered and
other UK institutions have been important players in the
Chinese market for many years. In recent years, China’s
four largest commercial banks have expanded their
businessintheUK.Otherfinancialinstitutions,including
the China Development Bank, China Investment
Corporation Limited, and China Foreign Exchange
Trade System, are also looking to open London branches
oroffices.AndtodayallATMsandmanyshops,especially
in London, accept China’s popular UnionPay cards.
Since the outbreak of the global financial crisis in
2008, China and the UK have jointly participated
in crisis resolution through multilateral platforms,
and promoted international monetary system
and global financial sector reform. In particular,
the two countries have enhanced financial policy
coordination and promoted standard-setting in major
platforms and international financial organisations
such as the G20, the IMF, the FSB and others.
This year, the IMF is conducting its Special Drawing
Rights(SDR)reviewofthecurrenciesitusestomaintain
its supplemental foreign exchange assets. China wants
to see the yuan included in this basket of currencies,
and the UK has provided important technical assistance
for this goal, including providing the IMF with the
benchmark yuan exchange rate of the London market.
These acts reflect the shared hope of the two countries
to improve the international monetary system.
China and the UK are pioneering and innovative in
bilateral financial cooperation. Talking of pioneering,
the UK was the first country to sign a bilateral currency
swap agreement with China. The two countries will
soon renew the arrangement and expand the size of
the facility to maintain financial stability. Among
By DR ZHOU XIAOCHUAN
Governor , People’s Bank of China
Increasing financial cooperation
Local landmark:
London’s famous Lloyd’s
Building was acquired by
China’s Ping An Insurance
Group in 2013
35. FIRST
33
Pillar of the community:
Bank of China’s London
Branch office building.
The bank has maintained
a continuous presence in
London since 1929
The PBC
will issue
a 5 billion
yuan central
bank note in
London, the
first time
the Chinese
central bank
has done so in
an overseas
market
developed countries, Britain was the first to obtain a
yuan qualified foreign institutional investor (RQFII)
quota, and among the first European countries to
establish a yuan clearing arrangement. The direct
trading of the yuan against the pound sterling
has started, ahead of many other countries. In the
developed world, the UK has been a forerunner
in fostering the offshore yuan market in London.
As early as 2011, HSBC was qualified as an
underwriter of debt financing instruments for non-
financial companies, as a result of market-based
assessment. We are also supportive of Standard
Chartered being qualified on the basis of meeting
the existing market criteria. Thus far, no other
foreign banks have been qualified to underwrite
debt instruments for non-financial companies in
the Chinese market. In the aftermath of the global
financial crisis, China was the first country to open
new bank branches in Britain. Moreover, in the process
of establishing the Asian Infrastructure Investment
Bank (AIIB), the UK was the first developed country
to support the initiative and played an important
role in the preparation for the AIIB’s launch.
There have also been innovative new means of
financial cooperation. In October 2014, the UK
Government issued a milestone yuan denominated
sovereign bond and included the proceeds of 3
billion yuan in the country’s foreign exchange
reserve. This is the first time ever that a Western
country has issued a yuan-denominated government
bond and announced the inclusion of the yuan in its
reserve. We in China regard this as a big innovation
in pragmatic bilateral financial cooperation.
On 20 October 2015, the PBC will issue a 5
billion yuan central bank note in London, the first
time for the Chinese central bank to do so in an
overseas market. The Agricultural Bank of China
has also recently issued a yuan-denominated green
bond in London. Furthermore, the two countries
are working together to promote the building of
infrastructure for our financial markets, and to
strengthen cross-border regulatory cooperation
on the trading of over-the-counter derivatives.
Looking ahead, I see broad prospects for bilateral
financial cooperation and envisage much more to
come. There is a lot of room for cooperation in
further opening the bond markets (including the
issuance of yuan sovereign bonds and enterprise
bonds), the connectivity of the two capital markets,
commodity market cooperation, and other areas.
In the near future, we look forward to progress in
mutual recognition of fund products, the connectivity
of the Shanghai and London Stock Exchanges, the
regulation of internet finance and shadow banking,
financial support for tech firms, financial consumer
protection, insurance industry, and more. This
cooperation is consistent with the direction of financial
development in both counties, and will be mutually
beneficial. I am confident that by taking a long term
perspective and fully capitalising on the existing
momentum, the two sides will work together to create
a golden age of bilateral financial cooperation. F
36. Winner of the Queen’s Award
for Enterprise 2010 and 2013
promoting international dialogue
and responsible capitalism
for 30 years
L O N D O N • W A S H I N G T O N
37. FIRST
35
CHINA
PHILIP HAMMOND
graduated in Philosophy,
Politics and Economics
from University College,
Oxford. After a 20-year
career in the private
sector, he entered
Parliament in 1997 as
the Conservative MP
for Runnymede and
Weybridge. He was
appointed Secretary of
State for Transport on
12 May 2010, a position
he held until 14 October
2011, when he was
appointed Secretary
of State for Defence. He
was appointed Secretary
of State for Foreign
Commonwealth Affairs
on 15 July 2014.
T
his week’s State Visit is well-timed. Our
two dynamic nations already enjoy a
vibrant relationship, and our co-operation
has brought significant benefits. We have
a shared interest in boosting our collaboration; and in
strengthening our dialogue across the board.
President Xi and Madame Peng will enjoy a busy
and ambitious programme reflecting the three themes
of the Visit:
The United Kingdom is Open for Business – British
companies are exporting a rapidly increasing amount
of goods and services to China. At the same time,
the UK has become China’s number one investment
destination among major EU countries.
The United Kingdom and China share a focus on
Economies of the Future – clean technologies, climate
change, healthcare, science and the creative industries
offer exciting potential for collaboration. This year
we have also celebrated the inaugural Year of UK-
China Cultural Exchange.
And the UK and China are committed to Working
Together Globally – especially as China is an increasingly
important actor on the global stage.
During my visit to Beijing in August for the
Strategic Dialogue, I outlined how the UK and
China, as Permanent Members of the UN Security
Council, have a responsibility for stewardship of the
international rules based system developed after the
Second World War. Global stability is fundamental
to our future prosperity: and we have a good track
record of working together. China’s participation in the
international coalition led by the UK, in response to
the Ebola Crisis, in Sierra Leone was unprecedented.
It showed a great willingness and capability to work
with us and others, to contain and suppress a disease
that was potentially a threat to all mankind. And no
member of the P5+1 could have achieved alone the
momentous deal reached with Iran in Vienna this year.
In March 2015, the UK became the first major
Western country to join the Asian Infrastructure
Investment Bank (AIIB). And last year, the UK became
the first Western country to issue RMB-denominated
sovereign debt. We believe that China’s ‘One Belt One
Road’ initiative offers long-term opportunities for UK
– China collaboration in third markets, supporting
infrastructure development across Asia. The State Visit
will also include a business element in Manchester,
promoting Chinese investment in the Northern
Powerhouse. I welcome China’s investment in the
expansion of Manchester Airport City and the launch
of direct flights from Manchester to Beijing.
There are growing opportunities to broaden our
partnership in the future. China is the world’s biggest
carbon emitter and one of the biggest consumers
of antibiotics, and we will continue to develop our
joint work in areas like climate change and anti-
microbial resistance. There are also opportunities for
enhanced collaboration in areas like peacekeeping, and
international development, particularly Africa.
We are supporting this co-operation with an
increased diplomatic presence in China. In the last five
years, we have expanded the UK’s diplomatic network
in China, opening a new Consulate General in Wuhan
and boosting the number of British diplomats. We
are delighted that China, in turn, has added a new
Consulate General in Belfast to its established ones in
Edinburgh and Manchester.
The State Visit is a key moment – but our work
together will extend beyond this week’s events. I am
confident that the State Visit of President Xi will herald
the start of a 21st Century global partnership; that
these four days will set the tone for the next decade. F
By RT HON PHILIP HAMMOND MP
Secretary of State for Foreign Commonwealth Affairs
A strong bilateral relationship
Foreign Secretary Philip
Hammond with President
Xi Jinping of the People’s
Republic of China
38. FIRST
36
CHINA
By H.E. LIU XIAOMING
Ambassador of the People’s Republic of China to the United Kingdom
LIU XIAOMING
was educated at Dalian
University of Foreign
Languages and also
earned a Master’s
degree in International
Relations at Tufts
University, USA.
He joined the Chinese
Foreign Service in 1974.
Following postings
in Zambia and the
US, he was appointed
Ambassador to Egypt
in 2001. He became
Vice Minister of the
Office of Foreign Affairs
Leading Group of the
CPC Central Committee
in 2005 and was
appointed Ambassador
to the Democratic
People’s Republic of
Korea (DPRK) in 2006.
He was appointed
Ambassador to the
United Kingdom
in 2009.
P
resident Xi Jinping will pay a State Visit to
the UK at the invitation of Her Majesty The
Queen in October 2015. This will be the
first State Visit by a Chinese President in a
decade. This heralds a happy and significant event as
it will mark a new milestone in China-UK relations.
Indeed, October 2015 and the State Visit is sure to be
remembered as the start of a ‘Golden Era’ in the Sino-
British bilateral relationship.
This ‘Golden Era’ has arisen from solid foundations
built up over the past ten years. 2015 marks the
tenth year of the establishment of the ‘China-UK
Comprehensive Strategic Partnership’. This means
that the two countries now enjoy a more mature and
stable relationship. This has been achieved against
a background of profound transformation of the
international landscape. Despite these far-reaching
changes, the interests shared by China and the UK
have become deeply intertwined. In addition, the
China-UK relationship is mutually complementary
and has brought tangible benefits to the peoples of our
two countries. Relations between the two nations have a
global and strategic significance – for example, bringing
many benefits to world peace and development.
2015 saw the China-UK comprehensive and
strategic partnership embarking on a fast track. This
trend is expanding the reach of the ‘Golden Era’. It is
one of many highlights creating a golden glow across
the panoramic view of the China-UK relationship.
The first bright highlight is the unprecedented level
of official visits. This is matched by the increasingly
deep mutual political trust. Earlier this year, the Duke
of Cambridge paid his first-ever visit to China, which
was the most important royal visit to China in nearly
three decades. In June, shortly after the UK General
Election, there were a succession of high level visits
to London from China to establish contact with
the new Government. These visitors included the
Chinese Foreign Minister, Wang Yi, Secretary of
Beijing Municipal CPC Committee, Guo Jinlong and
special envoy of President Xi Jinping, Secretary Meng
Jianzhu. In August and September, three of the annual
key bilateral dialogues were held. These included the
Strategic Dialogue, the High-Level People-to-People
Dialogue and the Economic and Financial Dialogue.
The outcome of these top-level meetings are being
translated into all-round progress in China-UK
cooperation. On top of that, new British and Chinese
consulates were established in Wuhan and Belfast,
respectively.
The second highlight is the productive economic,
trade and financial cooperation. Added to that is the
reality of an excellent match between Chinese and
British development strategies. These factors helped
deliver, in the first half of this year, China-UK trade
in goods totaling US$36.74 billion. This means that
China now ranks as the UK’s fourth largest trading
partner in the world. It raised Britain to the level of
China’s second-largest trading partner in the European
Union. China’s cumulative investment in the UK
now exceeds US$40 billion. As a symbol of deeper
China-UK financial cooperation, Britain became the
overseas trading centre for the Chinese currency, the
yuan or renminbi (RMB). That is a ranking second only
to Hong Kong. Most significantly, the UK became the
first developed country to become a founding member
of the China-initiated Asian Infrastructure Investment
Bank (AIIB).
China and the UK are also making progress on a
number of cooperation projects. These include nuclear
power generation and high-speed rail. From China’s
‘One Belt, One Road’ initiative and ‘Made in China 2025’,
to Britain’s ‘National Infrastructure Plan’ and ‘Northern
Powerhouse’ project, the two countries are exploring
the opportunity to pool their respective strengths and
dovetail their development strategies. All this adds
up to a new era where China and the UK are already
deeply engaged in all-round economic and financial
cooperation. The result will reap all-round benefits
for the peoples of China and Britain.
The third highlight is better understanding and
closer affinity. This is as a result of flourishing cultural
events and exchanges. 2015 is designated as the Year
of China-UK Cultural Exchange. The UK Season in
China ran from January to June and was a resounding
success. This enabled the unique British creative
industry to enjoy full exposure to the Chinese public.
The China Season in Britain was launched in July.
Entitled ‘Creative China’, this China Season is rolling
out a rich variety of events across Britain. In Edinburgh,
Chinese performing artists put on powerful and
captivating shows at both the Military Tattoo and the
International Festival. In London, Chinese creativity,
Chinese design and Chinese fashion lit up the stages
The future is golden
39. FIRST
37
China and
the UK can
engage
in mutual
investment,
infrastructure
cooperation
and joint
advanced
research
The China Conservatory
Orchestra performs in
Edinburgh as part of
the 2015 UK-China Year
of Cultural Exchange
of the London Design Festival and London Fashion
Week. The close affinity between Chinese and British
people can be highlighted by the fact that there are more
Chinese students and Confucius Institutes in the UK
than in any other European country. A further testimony
to such closeness is the concurrent commemorations
in both China and the UK of the 70th anniversaries
of VJ Day and the Victory in the World Anti-Fascist
War. Through these many commemorations, the two
countries relived their time of fighting side-by-side.
In turn, both nations reaffirmed their commitment to
safeguarding world peace and security.
Looking ahead, the future of the China-UK
relationship glistens golden bright. That glow will
get ever brighter as both countries build on existing
consensus, expand cooperation and keep making new
progress in their comprehensive strategic partnership.
Building stronger China-UK ties calls for
determination and confidence. One must always adopt
a long-term, strategic approach and see the relationship
between China and the UK not as a rivalry but an
opportunity for both countries. Indeed, China and the
UK have every opportunity to set an example for East-
West cooperation in this new era. Progress can move at
optimal speed if the advance is mixed with realism. It is
realistic to ground any relationship in the recognition
there will be bumps and obstacles. Travelling forward
with open minds can help identify these potential
disruptions and obstacles. With this spirit bound into the
relationship,delayscanbeminimised.Inthefinalanalysis,
it all comes down to respecting each other’s core interests
and carrying on with equal and win-win cooperation.
Building stronger ties calls for broader and deeper
cooperation that is mutually beneficial. China and
the UK are both committed to economic growth, to
structural adjustment, to reform and innovation, and
to emerging industries. By dovetailing their respective
strengths, China and the UK can engage in mutual
investment, infrastructure cooperation and joint
advanced research. China’s ‘Belt and Road’ initiative
and the UK’s ‘Northern Powerhouse’ are excellent
platforms for production capacity cooperation on an
international scale. China and the UK should make use
of these platforms to showcase a number of flagship
projects in order to make the ‘cake’ of mutual interests
larger and enable both countries to grow.
Building stronger ties also calls for enhanced global
significance and influence of China-UK cooperation.
As permanent members of the UN Security Council
and key players in the G20, China and the UK
have on their shoulders the heavy responsibility of
safeguarding world peace and promoting common
development. Both countries should work to build a
new type of state-to-state relationship based on win-
win cooperation, to improve the global economic
and financial governance systems and to enhance
global trade liberalisation and facilitation. Going
forward, the world is to face global challenges such as
epidemics, climate change and terrorism. This means
that with any post-2015 agenda, China and the UK
should coordinate their policies, play a leading role
and engage in effective cooperation.
President Xi Jinping’s State Visit to the UK will
unveil the goals for the ‘Golden Era’. The State Visit
will map out the ‘blueprint’ for the second decade of
the China-UK comprehensive strategic partnership.
The historic significance of this State Visit cannot
be overstated. The State Visit will carry China-UK
relations into the future. Now is the time for both
China and the UK to seize the opportunities presented
by the ‘Golden Era’ and join hands in writing an
exceptional new chapter for China-UK relations. F
40. FIRST
38
CHINA
I
n recent months we have been talking about a
golden year for UK-China relations. President
Xi Jinping’s State Visit to the UK is a once
in a decade opportunity to embark on a new
chapter in our relationship with our sights set even
higher. As we move forward together to embrace the
opportunities and challenges of the 21st century, I
believe we can turn a golden year into a golden era.
It has been quite a year for the UK-China
relationship. It began for me with the first visit
to China by His Royal Highness The Duke of
Cambridge. In my first week as Her Majesty’s
Ambassador to China I accompanied the Duke in
Beijing as he met President Xi Jinping, to Shanghai
to open the GREAT Festival of Creativity and
launch the first ever UK-China Year of Cultural
Exchange, and finally to Xishuangbanna in Yunnan
province to see efforts to combat the illicit trade in
endangered wildlife species.
August saw the first visit to China by a Foreign
Secretary for 5 years for our Strategic Dialogue
with China. Then, in September, I was part of
one of the most ambitious and rewarding weeks
I have experienced in UK-China relations. The
Chancellor of the Exchequer, George Osborne’s
delegation for the 7th UK-China Economic and
Financial Dialogue, co-chaired by Vice Premier
Ma Kai, included three Secretaries of State, three
Ministers of State, the Deputy Governor of the Bank
of England, Heads of the Prudential Regulatory
Authority (PRA) and Financial Conduct Authority
(FCA), a FTSE 100 business delegation, a Northern
Powerhouse business delegation, a Cultural Leaders
Delegation, a Northern City Leaders Delegation and
an accompanying media delegation. Across five days
and seven cities, I saw numerous examples of our ties
with China and our commitment to broadening and
deepening them. The Chancellor’s commitment
that the United Kingdom wanted to be China’s
“best partner in the West” echoed from Shanghai
to Urumqi and from London to the Northern
Powerhouse.
Meanwhile, the All Party Parliamentary Group
on China and the Lord Mayor of London with
another business delegation were here for separate
programmes.
All this came immediately after a highly successful
People to People Dialogue (P2P) in London, Cardiff
and Oxfordshire, with a delegation led by Vice
Premier Liu Yandong – China’s most senior female
politician. The P2P covers a range of knowledge
economy and social policy issues: health, science,
education, culture and creative industries, tourism,
sport, youth and regional cooperation. These
ministerial-level talks showcased the breadth of our
co-operation and looked to the future with a large
number of agreements that helped cement the United
Kingdom as China’s partner on innovation.
Looking Back
When President Hu Jintao visited the UK in 2005
China’s economy was growing at 10 per cent a year.
The Global Financial Crisis was three years away. UK
exports to China were worth £4 billion a year. Ten years
on, the UK economy has emerged from a difficult
period to grow faster than any other major developed
country for the past two years. China is embracing a
‘new normal’ of slower, more balanced growth.
Over that time, through political ups and downs,
financial shocks and changes of leadership in both
countries, our economic relationship has continued
to grow. In 2014, our two-way trade reached an all-
time high of US$80 billion. UK exports to China
have quadrupled in value to £18.2 billion.
We are doing more trade and more investment with
China than ever before. The opportunities are not
confined to the first tier cities of Beijing, Shanghai and
Guangzhou (or to London and the South East). The
bulk of China’s new, estimated 600 million middle
class consumers by 2020 will be living in second and
third tier cities.
Coming together
Our two governments recognised several years ago
that our economies were becoming more and more
complementary. Together they coined the term
‘partners for growth’. Each country had a long-term
economic plan and vision for economic reform.
There was a natural fit between our two economies.
As growth slowed or went into reverse in other parts
of the world, China could become an important new
market for UK exports. Our companies, technology
and services could complement China’s development
and help it achieve its ambitions.
By H.E. BARBARA WOODWARD CMG OBE
Ambassador of the United Kingdom to the People’s Republic of China
The benefits of global partnership
BARBARA WOODWARD
holds an MA in History
from St Andrew’s
University and in
International Relations
from Yale. She joined
the Board of the Foreign
Commonwealth Office
as Director General
Economic Consular
in October 2011, where
she worked on economic
diplomacy and emerging
powers. Ms Woodward
has worked on economic
and security aspects
of foreign policy in
China (where she was
Deputy Ambassador
from 2007-09) and
Russia (1994-98), as
well as in the EU and
at the UN. She took
up her current post as
HM Ambassador to the
People’s Republic of
China in February 2015.
41. FIRST
39
China has
become the
UK’s 6th
largest export
market,
second only
to the US
outside
Europe
As China looked to put its huge foreign exchange
reserves to work and its businesses sought new
markets, the UK offered an economy with openness
in its DNA and a direct route into China’s biggest
market, the EU. The result has been huge expansion
in our trade and investment relationship. China
(excluding Hong Kong) has become our 6th largest
export market, second only to the US outside Europe.
The Chancellor of the Exchequer has set the ambition
that in ten years’ time it should be our second largest
export market globally.
The United Kingdom has established itself as
by far the leading major European destination for
investment from China. Investment has come from
all major categories of Chinese investor, and flowed
into a wide range of sectors, from energy to high-end
manufacturing, real estate, retail, professional services
and the digital economy. London has become the most
dynamic hub for offshore RMB business outside Asia.
Win-Wins
This has been good for both countries. China is
now Jaguar Land Rover’s largest market. To keep
up with demand, it has invested £520 million in the
most modern engine plant in the UK, creating 1,000
new jobs. It has also opened its first ever overseas
manufacturing facility in Changshu, East China. The
Chinese car maker Geely rescued the London Taxi
Company (LTC) from administration. It announced
earlier this year it would invest £250m in a new factory,
research development centre and assembly plant to
build the next generation of electric and low-emission
vehicles in the UK, including the iconic black cab.
The Chinese rail company CSR Times Electric
bought Dynex, a Rail semi-conductors business in
2009. The technology it acquired would have taken
15 years to develop. It has invested in RD, new
products and expanding Dynex’s manufacturing
facilities in Lincoln. This year it invested in SMD,
a UK underwater robotics company in Newcastle,
which will become the headquarters for its new
global marine business. The 5GIC at the University
of Surrey is the world’s leading independent facility
for researching and trialling 5G technologies. It is
working with Huawei to develop the world’s first
5G test bed – UK and China tech industry leaders
working hand in hand to develop new technology.
Looking forward
These are just a few examples of the benefits of
working together. I believe there is much more to
come. China’s progress in rail is astonishing. We want
it to be part of the renaissance of our rail industry.
Through encouraging Chinese investment in the
HS2 project and the potential of HS3 we want to help
open up China’s supply chains for British companies.
When China sets up a manufacturing base in Europe,
we want it to be in the UK.
Through investing in RD to develop better
engines, drive trains and electronic control systems
and new energy vehicle technology, the UK and
China can work together to develop globally
competitive cars. We want the UK supply chain that
provides up to half the content in an Airbus to help
China develop its own aircraft build programmes.
We want to increase the number of banks clearing
RMB payments in London. We want more British
brands to tap into the dramatic growth in Chinese
consumption online and offline. Adidas has 8,400
stores in China. No UK consumer goods firm comes
close. We want more Chinese tech companies to do
their RD in the UK. As demand for international
standard hospitals and elderly care facilities grows, we
want to work with China to deliver better healthcare
and help create the medicines of tomorrow.
Our early support for the Asian Infrastructure and
Investment Bank (AIIB) showed our commitment to
better regional connectivity, economic co-operation
and common development. We are putting in the
groundwork so British companies are well placed to
benefit from President Xi’s flagship One Belt, One
Road initiative. We want to encourage Chinese
investment in UK regeneration, including the
Northern Powerhouse, and National Infrastructure
Plan projects such as transport hubs around HS2.
And last but not least, we welcome and encourage
Chinese involvement in the UK civil nuclear market.
A New Era
Our economic partnership is supporting jobs and
prosperity in both countries. Even if China’s economy
grows by only 5 per cent this year, it would represent
the same value increase in GDP as 10 per cent growth
in 2007 when China’s economy was half today’s size,
and a quarter of all global GDP growth in 2015.
The many exciting announcements this autumn
will showcase the breadth and depth of our 21st
century global partnership. They will symbolise our
commitment to take a bold step forward together.
There will be ups and downs in the years ahead,
but by working together we can make this a golden
era for the UK-China relationship for many years
to come. F
• UK exports to China: £18.25 billion
• Bilateral trade: US $80 billion
• Chinese investment received by the
United Kingdom: US $5.1 billion
UK-China Economic Statistics 2014
42.
43. To His Excellency Mr Xi Jinping, President of the People’s Republic of China
Your Excellency
As Mayor of London I would like to offer you the most heartfelt of welcomes on the occasion
of your State Visit to our city in October 2015.
When I met with Party Secretary Guo Jinlong from Beijing earlier this year, I was particularly
interested to hear about the One Belt, One Road initiative that accentuates China’s ambition
to have an important role in the international market place. I am also delighted to note the
Shanghai Free Trade Zone, which was first trial-led when I last visited China in 2013, is
operating in full swing and expanded this year. The institutions and mechanisms around
the Free Trade Zone, I believe, could offer very large opportunities in future for UK-China
business relations if the experiment is successful and repeated elsewhere in the country. I would
like to reinforce my message that London supports these initiatives and I hope that you will
actively consider the high-quality expertise and products offered by London’s companies.
The UK government is creating the ideal business environment for investment in regeneration
projects across the UK. We are particularly pleased to be observing the growing interest
and confidence from the Chinese partners to invest in our strong pipeline of urban renewal
projects in London, such as those in Vauxhall and the Royal Docks. London is immensely
proud to be home to nearly 200 Chinese firms operating in London’s key sectors, including
the creative industries, industrial and business services, and financial services.
2015 marks a flagship year for UK-China relations with the first ever UK-China Year of
Cultural Exchange. It is an incredible platform to promote the understanding between our
peoples and also to build new creative partnerships to capitalise on exciting opportunities. My
office has been privileged to support a number of China/UK cultural events, for example the
Night of Beijing concert co-hosted with the Beijing Municipal Government in June.
London contains a wealth of opportunities which Chinese individuals, companies and
organisations could be a part of, and I look forward to welcoming more students, tourists
and businesses from China to our great city.
I hope you have a fantastic and successful visit to London and if there is anything my office
can help with, please do not hesitate to ask.
Yours sincerely,
Boris Johnson
Mayor of London
41
FIRST
44. FIRST
42
CHINA
The Lord Mayor’s annual trip to China is always
a highlight of the City calendar. What was the
background to this year’s visit?
It all stems from a speech the Queen made during her
State Visit to Ireland in 2011, in which she noted that
our exports to Ireland were greater than those to Brazil,
Russia, India and China combined – that’s a country
with a population of about four and a half million
versus an economic bloc with about 2.8 billion. I think
that was a big wake-up call for a lot of people – and it
made the UK government realise that something had
to change in terms of our global trading relationships.
There is a possibility that we might not be in the
same situation with Europe in two or three years’
time, and we’re going to need to have other irons in
the fire. The Germans do it, the Italians do it, the
French do it – and they all seem to do it better than us.
Why do you think that is?
I think our focus on Europe distracted us from
building relationships across the rest of the world.
Europe is only one continent, and we need to
remember that. The fact is we’ve got to get out there
and sell our products and services – and I like selling
the City, because it’s an extremely good product.
I’m always amazed at the discrepancy between the
reception I get when I go to a country like Mexico,
where they think the streets of London are paved with
gold, and the attitude of the media in this country,
which sees the City as an easy target.
What do you see as the UK’s biggest attraction, in
financial services terms, for a country like China?
Where do you want to start? We can offer them our
technological expertise, our capital markets, and our
capabilities across a whole range of professional services.
It all comes back to trade, and the importance of
having a diversified portfolio. China doesn’t want to
spend all its money with the Germans, or the French,
or the Italians, they want to spread their risk and
invest in a variety of industries and economies – and
the one truly world-beating industry we’ve got is
financial and professional services.
We have the largest international financial market
in the world, and we’ve got hundreds of years of
experience to back it up – both good and bad. As I told
some of the investors I just met in China, I’ve lived
through eight bear markets, three of them nasty ones,
and we often get it wrong. But we are willing to accept
the fact that we got it wrong – and we are willing to
share with them how we put it right.
How did that message go down, in light of the
recent turbulence in the Chinese stock market?
I think they were glad to hear it. The fact is that the
Chinese stock market is still very young: 85 or 90 per
cent of it is made up of individual investors, basically
speculating on the market – and that’s very volatile. One
of the most important messages I wanted to get across
during my visit is that long-term institutional investors
are critical shock-absorbers in volatile markets, because
if you’ve got a thirty-year view, you’re a value buyer,
you’re not a momentum buyer. Whereas if you’re an
individual investor in a country like China, you might
have a five-minute view of a stock, or a day’s view – but
you’re basically a day trader. On top of which many
of them are heavily leveraged. But if you don’t look at
earnings per share, if you don’t look at the cash flow, it’s
literally someone’s latest tip.
What we are talking about is life assurance, pension
funds – 30-year money, effectively – which is ideally
suited for infrastructure spend. Those are the people
who sell when the market is looking expensive and buy
when it’s cheap, and that’s what gives you the shock
absorbers at each end. The UK market is 85 per cent
institutional – in China it’s 85 per cent retail.
I’m not saying that’s a bad thing, after all you’ve got
to start somewhere, and speculation is quite a good way
of starting a business. After all, the London market
began with merchants taking risk on ships laden with
mace or nutmeg coming back from the Caribbean or
the East Indies. It all comes back to hunger and desire
for profit, and harnessing those basic emotions to raise
money for small companies, thereby creating jobs and
growth. The trick is to harness the gambling instinct
and put it to productive use in the capital markets.
Having spoken to policy makers, business leaders
and investors during your time in China, what is
your analysis of the economic temperature and
sentiment in the country?
Well, there’s no doubt that things are slowing down,
that much is evident, but is that necessarily a bad thing?
After all, I expect 5 per cent growth in 2015 is probably
Interview with ALDERMAN ALAN YARROW
Lord Mayor of the City of London
Sharing best practice
ALAN YARROW
graduated from
Manchester Business
School. He left Dresdner
Kleinwort in December
2009 after 37 years with
the group, latterly as
Group Vice Chairman
and Chairman of the UK
Bank. He was formerly
Deputy Chairman of the
FSA Practitioner Panel,
Chairman of LIBA,
Director of Complinet, a
member of the Takeover
Panel and of the Council
of the British Bankers
Association. He was
appointed Chairman
of CISI (Chartered
Institute of Securities
and Investment) in
September 2009. He
was also a member of
the Chancellor of the
Exchequer’s High Level
Stakeholder Group and
was appointed Lord
Mayor of the City
of London in
November 2014.
