The UK has welcomed the extraordinary re-emergence of China over the past 20 years making China the world’s second largest economy as a proportion of global GDP today. China’s importance to the UK economy as a trading partner has increased consistently since 2004, with both imports and exports increasing steadily. Beyond being an important trading and investment partner, the UK is fully committed to deepening the policy dialogue too in ways that might assist China to meet its key goals as a multilateral player and to develop successful policies.
China’s Third Plenum meeting in November 2013 set an overall objective of deepening economic reform and noted that the market had a key role to play in innovating ways to boost future growth. A key element to the reforms would be the adoption of international rules and standards. The announcement of the China Free Trade Zones (FTZs) Shanghai Pilot was taken by many observers as a concrete sign that the current government administration recognises the necessity for reform.
The main objectives of the FTZs are to accelerate economic reform, broaden internationalisation and liberalisation, and explore the opening of the financial services sector. The Shanghai FTZ pilot was the first to be announced, followed by Tianjin, Guangzhou and Fujian in December 2014. We firmly believe that the free trade zones have the potential to be a precursor and significant breakthrough in the way foreign investment will be managed. It seems clear that the Chinese authorities are determined to test and pilot reforms. If the experiment is successful, they are likely to serve as a model for the country as a whole.
The UK government has in turn been keen to assist Chinese thinking around what elements most positively contribute to achieving the objectives of the free trade zones. Part of any menu of contributory elements relates to regulatory reform and part to good business practice. UK-Chinese cooperation on the FTZ development was endorsed by the Prime Minister and Chairman Xi in 2013 and agreed by the Chancellor and Vice-premier Ma Kai at the UK-China Economic and Financial Dialogue in the same year.
This was followed up by a very successful symposium held in Shanghai on 3 December 2013. Co-organised by the British Embassy and the Chinese Ministry of Commerce, this focused on three broad areas relevant to the FTZs: business environment, financial regulation and trade facilitation. Speakers from the UK side included the heads or senior figures from the BOE, OFT, IPO and HMRC, and senior executives from HSBC, DLA Piper, Deloitte and RSA. Sir Gerry Grimstone, supported by TheCityUK and the China-Britain Business Council, with the participation of the City of London Corporation and the Mayor of London, brought together the International Experts Consultation Group (IECG) of private sector leaders to help identify how business practice responds to certain policies and how those polices may need to be shaped in order to increase competitiveness.
This report provides an overview of the work of the IECG so far and we hope it will be a useful reference for the reader. The report gives an overview of each paper and suggests key discussion points from the many ideas contained in the originals. The report also sets out areas for potential future collaboration, an indication of the on-going commitment of the UK and the IECG to dialogue and to growing the relationship with China.
You can download a copy of this report in Chinese here.