Motion made, and Question proposed, That the sitting be now adjourned.—[Mark Tami.]
I hope that it will be a distinct pleasure to serve under your chairmanship, Mr. Illsley. I am delighted to have secured this debate on a crucial topic. It was important in May and, given the global situation, it is even more important now that British businesses can operate globally and particularly in China. I am delighted to see here today so many of my colleagues who accompanied me on the Industry and Parliament Trust’s most informative and highly educational visit to China in May—[Interruption.] I am gently reminded that we went to Shanghai, which I thought was in China! We did spend some time in the Shanghai region though.
I am also pleased that in the Public Gallery we have representatives from the Chinese embassy and British businesses who provided people and resources to make the parliamentary fellowship programme possible. I pay tribute to the chairman of the all-party China group, my hon. Friend the Member for Wirral, South (Ben Chapman), who accompanied us on our visit and who, over many years, has done tremendous work in fostering relationships between China and the UK. While I am in the business of giving my sincere thanks, I should mention that we were accompanied by two very helpful representatives from the Shanghai People’s Congress, who made things work and were very informative and supportive. My thanks to them.
All hon. Members, particularly those in the Chamber today, will be familiar with the work of the IPT, of which many here are fellows. They have benefited from the opportunity to undertake an attachment in industry to see at first hand the challenges and successes of British industry both in the UK and overseas. As chairman of the IPT, I remind hon. Members that its mission is to foster understanding between us as legislators and those who, over the years, have created the industrial wealth of our country. We have done that very successfully, and recently the IPT took the next step of integrating with Europe, so that we could understand European industry and Parliaments, too. Our trip to China was our first venture to look at the global marketplace, which was what made the visit so educational.
I concur with what my hon. Friend says about the IPT and the way in which it is branching out, not only in the UK, but across Europe and globally. I was fortunate enough yesterday to receive my fellowship to the IPT from PricewaterhouseCoopers, to which I pay tribute not only for providing me with that opportunity, but for the chance to visit Brussels and Shanghai to see its business operations in those places.
Everyone in the delegation was a great ambassador, not only for the IPT but for the UK Parliament. I do think that the trip was important. It was non-political and formed a genuine basis on which we could learn better about how UK business operates and works in China and the rest of the world. I agree with my hon. Friend that that happens because of the sincerity of the relationship between the UK businesses that support the IPT and the fellows who get attached to them. I think that bond is very unique. We would be challenged if we tried to emulate it, because it has developed over many years.
We were impressed by our visit to the Suzhou industrial park—a joint venture with Singapore. Following an agreement signed in 2002, funding was made available and within five years we saw a massive industrial park offering every facility to Chinese and international businesses.
We also learned about how China is handling climate change. BP China is at the forefront of investigating clean technology and has invested in a university-scale research unit that employs more scientists and climate change experts than I care to mention. Not only did we hear about its extensive research and development, which will produce remarkable results in reducing emissions, but about its skill in handling a major joint venture with China to shape a way forward for energy to serve a country of 1.5 billion people. I think that when the Chinese consider the scale of what is being done, and needs to be done, in their country, their position becomes apparent to them and they think, “We might be China, and we might punch a bit, but there is a real big world out there that we need to know about.”
Having arrived shortly after the earthquake in Sichuan, we paid our sincere respects to all those who tragically died in that natural disaster and signed the book of condolences at the foreign ministry. The power of nature can make us realise how frail human beings are.
As my hon. Friend the Member for Preston (Mr. Hendrick) said, we were presented with an excellent overview of Chinese operations by PricewaterhouseCoopers. We also learned from Arup about eco-city initiatives and saw many of the magnificent earthquake-proof high buildings, which are very visible on the skyline. China is an earthquake region and major engineering is needed to ensure that buildings are safe. We also visited the consul and were advised by UK trade investors on their initiatives on UK investment in and out of China and the major Expo scheduled for 2010. Sadly, that has attracted little UK funding. Are we doing enough at ministerial level to provide aid and assistance to UK businesses, particularly in China?
Education was also a focus of our visit. British interests were represented in various joint ventures delivering high-quality secondary and higher education on a major scale. With the British Council, we visited the campuses of the universities of Nottingham and Liverpool and of Dulwich college to see how non-Chinese children can receive an international education and hopefully contribute in the future to China’s fast-growing economy.
While in Shanghai, I did my fellowship with GKN, and it was very good to witness the GKN experience in Shanghai. It was making automotive products for the Chinese automotive industry. Some of my colleagues on that visit said that my face became a little more animated when I saw metal being cut and other things that I fully understood and was au fait with. I congratulate GKN and others on being able to move into that sphere and contributing to Chinese automotive industries.
The purpose of today’s debate is threefold. First, if they catch your eye, Mr. Illsley, it gives an opportunity for hon. Members to recount their experiences and impressions and to tell us what perceptions they formed on the visit. Secondly, I want it to raise awareness of what more British business could do in China, and how that could be helpful. I should be grateful if the Minister, even though he is new to his job, told us how important he thinks that relationship is.
Thirdly, given the global crisis that we face, with Chinese sovereign reserves amounting to something like $1.8 trillion, we should foster our relationship with China and encourage it to invest more in British businesses. Global economies have changed a great deal in the past six months, and that makes it even more important that the UK is a major player in the global field of business in both China and the wider world.
Thank you, Mr. Illsley. I start by warmly commending the hon. Member for Nuneaton (Mr. Olner) for securing the debate and for his excellent leadership of the trip, in conjunction with the hon. Member for Wirral, South (Ben Chapman). Perhaps I should confirm that I was a member of the delegation, although I suspect you will have gathered that, Mr. Illsley. As a trustee, I was impressed by the organisation provided by the IPT’s staff and by the wonderful support and involvement given by the companies that sponsored and supported the trip. It was immensely helpful to have UK businesses alongside us while we were in Shanghai.
I am aware that a good number of colleagues wish to contribute, so I shall move quickly through three broad points that I hope will add to the debate. First, reflecting on our trip to Shanghai from a little distance, I note that China is not a single market. In business and politics, we tend to talk in shorthand as though it were one large, homogenous market, perhaps because the Han ethnic group makes up about 90 per cent. of the population, or because Mandarin tends to be the language that most UK businesses or politicians encounter. There is an assumption that there is a homogenous whole, but if one looks carefully, one sees that the continent is just as diverse as Europe.
Let us consider the north-south divide. In the south, cities such as Shanghai are fast moving and entrepreneurial. We saw that on our trip. Time and money matter there, as they do in many western cities. That is a crucial characteristic for such cities, and is one reason why Shanghai is the financial centre of China, although there may be competition from Hong Kong in that regard. There is a cultural focus on entrepreneurship. However, when I talk to UK businesses, they tell me that their experiences in the north of the country—north of the Yangtze—are of a relatively slower and perhaps more bureaucratic way of dealing with business. That might be because Beijing, like Washington in the USA, is a corporate town and the corporation is government, making the culture somewhat different to that in Shanghai, Hong Kong or Shenzhen. It is important to understand that there is a difference between the areas to the north and south of the Yangtze.
It is also important to remember, when thinking about whether China is a single market and how businesses should approach it, the difference between the eastern seaboard and the rural hinterland. Roughly half of the 1.3 billion people in China live not in major urban centres or sprawling suburbs, but in the poorer and more remote towns and villages. We saw on our trip that there has been a huge migration of labour into the cities, with many such people working unofficially on construction sites. However, a substantial section of the population are not part of the economic revolution, perhaps because of their income level, location or age. From a business point of view, when thinking about the scale of that marketplace, it is worth remembering its characteristics and how it is differentiated.
My second point is that China is not becoming a western nation, as might initially have appeared to be the case. It is simply becoming a modern nation. My first impressions of Shanghai were, I suspect, the same as those of most hon. Members present. It seemed remarkably like our western cities, with the shops and brand names, the people’s adoption of western fashion, and even traffic jams. However, on talking to UK and local business people I realised that there are still vital differences to living and doing business there. I offer hon. Members a simple, but perhaps controversial, example. When we arrived at the hotel, a letter awaited us that set out the Government’s rules and regulations governing use of the internet. I shall not test the patience of the House by giving all nine rules, but they included the following examples. When using the internet, one should not:
“Endanger China’s unification of the country, territorial integrity and sovereignty…Betray China’s national interests or endanger the security and honor of the country…Violate religious policy, publicize or promote any evil cult organisation…Spread rumors and disturb the social order and stability of the country”.
Those rules might seem strange, but they are not simply the demands of a one-party state. The character of rules such as the one about the country’s honour, suggests something very different to our social norms.
As I suspect my hon. Friends will realise, I am no expert on the teachings of Confucius, but it seems to me that certain values that are distinctly different to our own remain central to the people of China. We believe in democracy and freedom of the individual, whereas they instinctively respect their rulers and always put family first. We believe in equality before the law, whereas they have far more regard for the quality of the ruler. Even with the upheaval of huge migration between rural and urban areas, there is still a strict hierarchy of relationships in China that shapes every family, business, community and political organisation. What we might perceive as subservience, they regard as respect. The paramount importance of face, or mianzi, matters greatly to every person, business and part of that nation.
On my trips to Shanghai and to Hong Kong the previous year, I saw that things are changing. One interesting dynamic is what changes will come of the “Little Emperor” generation. Children grow up with considerable demands on them, but they also have considerable opportunity and might become more self-centred than their parents. If we look across the piece, British businesses that want to succeed in China will continue to need to understand the distinct values of that nation.
My third point is that UK plc needs to do better. As I have said, I have been to both Hong Kong and Shanghai in the past 18 months, and I have been immensely impressed by many of the UK players whom I have met, such as the team at BP. I am sure that hon. Members will agree that they showed a long-term vision and professionalism that could match any competing company in the world. Other companies that are leading players, such as GKN and Arup, command immense respect in China. However, I fear that the overall effort of UK plc is not working as well as it might. Although our exports to China have grown, French exports have grown at twice the rate of ours, and German exports at three times the rate. In my discussions with businesses in Shanghai and subsequently, I have met several people who believe that the UK’s official representation is not as effective as it should be.
One of the problems is the unnecessary duplication of effort by Government agencies—the peculiarity of having different offices in different parts of Shanghai that often go to the same meetings and pitch for the same opportunities. The regional development agencies and UK Trade and Investment should not be jostling with each other for the same business. There should be one strong team working for the whole country, pooling resources and operating in each of the key cities. I would be particularly interested to hear the Minister’s response to that point, given that the former Secretary of State for Business, Enterprise and Regulatory Reform made it clear, quite rightly, that he wanted to see that duplication ended.
Equally, there is evidence to suggest that some of the original dynamism of the China-Britain Business Council has been lost and that British businesses and politicians are not getting in to see the right people in the Government at the right time. That problem was much commented on. I hope improvements have been made. If it can be demonstrated that things have changed, that would be fantastic; if it cannot, urgent work is needed.
The opening up of China and the rapid expansion that that has created is a great opportunity for businesses in this country. We already have world-class players there—people who are regarded highly in China because they have taken the time to understand the markets and the people with whom they are working—yet UK plc is falling behind. Politicians in government and the business world generally need to realise that China is not a single market, but a continent of different cities and peoples and a truly segmented marketplace. We need to strengthen and unify our presence on the ground. Indeed, as the global economy turns down, we must become even more competitive. Our trip last May certainly helped me to understand the opportunity and challenges before us—I suspect that the same is true for other hon. Members—and I hope that it will inform Government policy in the coming months.
May I first refer to my entry in the Register of Members’ Interests? I am delighted that my hon. Friend the Member for Nuneaton (Mr. Olner) has secured the debate. As chairman of the all-party China group, I was delighted to join him in leading the delegation and contributing to it. The all-party China group has nearly 500 members, and it is vastly important that all parliamentarians and not only members of the group are aware of the scale, speed and nature of change in China. There is simply insufficient knowledge on China, not only among the general public, but among parliamentarians. I try to take a delegation of around 10 Members to China each year, but even assuming the group’s membership of 500 did not change, it would take me 50 years to get through the list, so I will lose no opportunity to get hon. Members to see and believe what is happening in China, and particularly in Shanghai. It is also particularly important that visits are as focused as ours was on the specific issue of British business in China.
I congratulate the staff of the IPT on their work and initiative. I would like to join the other members of the delegation who have already spoken in thanking all those who received us and helped us on both the British and Chinese sides. We have not yet mentioned Virgin, which was helpful, not only in getting us to China, but in briefing us on the issues that it and other companies face there. Overall, we could scarcely have received a more rounded view of the issues and opportunities of the business environment.
When I first went to China in 1986 as commercial counsellor, it was a very different place from the China we see now. It was a country of Mao suits and bicycles, and doing business was pioneering and difficult. Commercial practice and law was not as we know it, negotiations were a special art form and intellectual property issues were problematic at best. However, many of the companies we saw in Shanghai in May were in China before I went in 1986, which is a fulsome demonstration of their commitment to the market.
For many years China was the biggest potential market in the world. It took a number of years for the actuality to arrive, but now that it has we can see that in rounded terms the Chinese economy has grown at about 10 per cent. per annum since 1978. My maths is not so good, but I know that that is a lot of growth. It is a phenomenon that has changed the shape of the world. It is clear that an organisation that is in business in any serious way needs to be part of what is happening there.
The perception of China has been changing ambiguously over the years, from booming market to challenging competitor. For many years it was regarded as an exporter of deflation, but more recently it has been regarded not only as a good place to do business, but as an exporter of inflation and a voracious consumer of raw materials and other goods for which the rest of the world has a need.
Attention has long been focused on China’s human rights record, pollution, its role in Africa and its challenge in other markets. Despite the image at the time of the Olympic torch, the prevailing image of China is of an economic powerhouse, as exemplified in Shanghai, and the nation that produced the most sensational and successful Olympic games. China has for some years been an attractor of foreign direct investment and is increasingly an outward investor. Of course, China is not standing alone. If one looks at the east, one is looking at India, Vietnam, the Asian dragons and tigers and the old economies of Korea and Japan. The sum of that is that the world is becoming oriental rather than occidental. It means that the economic centre of gravity is moving eastwards, and the political centre of gravity with it. That has profound implications for all that we do in relation to China.
China has been the pac-man effect in action, and becoming part of it has been an imperative and not an option. Whether the biggest challenge for us would be China’s continuing success and growth or its relative slowing-down and failure—not that one can look at it in those terms—has long been an interesting question.
As we saw in May, any reference to China as the workshop of the world simply fails to capture the incredible and rapid changes taking place within its borders and limits the nature of Sino-British partnership. We would be unwise to ignore, for example, the implications of a vast and growing Chinese middle class that would potentially consist of more than 500 million consumers by 2025. As we have said, British industry is very much aware of those opportunities. As science and technology take centre stage within the Chinese Government’s strategy for sustainable development, so a space has opened for expertise and experience in that area. Perhaps a prime example of that is Arup’s involvement in the Dongtan eco-city close to Shanghai.
The build-up to the Beijing games gave us many opportunities, and British firms were able to play a part in many sectors, such as the provision of temporary power for Olympic facilities, the design of the “Bird’s Nest” stadium, representing the British Olympics organising committee and the design of the magnificent terminal 3 building at Beijing airport. Those are but a few examples. It would be impossible in the time available to represent the range and diversity of opportunities and the successes that we have achieved in recent years.
Although we can celebrate the strength of the Sino-British economic partnership, we must be careful to avoid complacency. We are told that the UK is Europe’s largest investor in China, but we should be aware, echoing the point made by the hon. Member for Hertford and Stortford (Mr. Prisk), that in 2006 the net investment in China by British businesses fell compared with 2005. Furthermore, we should remember that that investment is dominated by a few companies, notably the oil companies. If we are to maintain an upward trajectory, and continue to capitalise on Chinese economic expansion, we must think about China with even greater interest and commitment than that which we have previously reserved for the US and Europe. Our trade deficit in Chinese goods, again reflecting the point made by the hon. Member for Hertford and Stortford, was £12 billion in 2006, and it continues to grow. At the same time, China was our 13th most important destination for goods, and 20th on the list for our services. That simply is not good enough when we consider that China is positioned to become the world’s largest economy within two decades.
It is a courageous man who will speculate how China is affected by the current global economic crisis, and on present form it is not clear. On the latest statistics, our trade continues to grow, but it will certainly be affected, as will China’s growth—still between 9 and 10 per cent.—as it is hit by what is happening in the wider global economy. There is a minimum economic growth level that China must maintain in order to maintain social cohesion, given the absence of a sophisticated social security net, growing aspiration among the Chinese people and, notwithstanding the one-child-per-family policy, population growth. At this stage, while China sees economic turmoil as principally a western phenomenon, its exposure to problem assets cannot be assessed. Some factories are affected and some are closing. Basic production in steel, for example, is being cut.
China is making its contribution to a global solution and, like the west, is cutting interest rates. While having a relatively closed financial market, the Chinese economy will be affected. However, the supertanker effect—I am sorry to be so corny—is in play, as is the level of technological development, so the effect will probably be relative and China will remain in global terms an attractive place to do business. This is not a time to switch resources or attention from our business with China.
The second question I want to deal with, which has not been raised as much since stock markets started to rise again, is whether China will use its massive foreign exchange reserves and sovereign funds to buy up our assets at knock-down prices, and whether that would be a good thing. China has been an increasingly responsible global and regional player, both financially and politically. It played an extremely important leadership role in the Asian financial crisis and it will do so now. Thus far, to the best of my knowledge, it has used its sovereign funds in equity investment and in banks, which hon. Members might be surprised to learn, among other things. China also recognises its responsibilities and its lack of knowledge in running Western businesses. We have long sought Chinese investment and in the current climate we will want more. After all, it was a Chinese company that relaunched auto production at Longbridge.
The role of British business in China is crucial, but the Government are always central to achieving its aims, and the resources that they devote to this end must reflect both the scale of the challenge and the aspirations of industry. Our trade and investment team total 91 full-time equivalent staff in China to promote the interests of British goods and services there. That has increased by a quarter since 2005, which is obviously a step in the right direction.
I pay tribute to the China-Britain Business Council, which does excellent work in China for British companies, and to its current and past chairmen. As a nation, however, despite our task forces, prime ministerial and high-level visits, we still have not sufficiently moved on from an “us and them” relationship to one of greater partnership. We still treat China as if it was just another country, albeit an important one, but the fact is that the world has changed and we need to take account of that. We have not sufficiently changed our institutions or our attitudes to take account of the new global centre of gravity and the historic shift. We must do more.
I congratulate the hon. Member for Nuneaton (Mr. Olner) on securing the debate. As so many people wish to speak, I shall dump most of my speech and talk about suits, ties and watches on another occasion. I congratulate the Industry and Parliament Trust on this initiative. The hon. Gentleman is the chairman of the group, and the delegation was ably led by him and the hon. Member for Wirral, South (Ben Chapman). They did a splendid job, and I believe that every member of the delegation got something out of the trip.
We owe a debt of gratitude to the wonderful staff at the IPT, which is a wonderful organisation. I did my fellowship donkeys’ years ago with Esso, and am hoping to start a masters with Bank of America shortly. I understand that it will want to fly me to New York, so I am greatly looking forward to that. But as someone who had never been to China, the opportunity to go there changed my mind dramatically about a number of issues.
The chief executive of the IPT, Mrs. Sally Muggeridge, stated:
“This fellowship was a fantastic educational opportunity for the group of MPs to gain a strong knowledge of issues surrounding China relevant to industry in the UK together with first-hand experience of business and growth in the country.
The China Fellowship was a natural extension of the IPT’s work over the past 30 years in encouraging parliamentarians to improve their knowledge and understanding of business and the issues that affect it. Many of the delegates have already completed an 18-day IPT fellowship programme spending time within UK business.”
However, many of us need to go back. One visit to Shanghai hardly makes us experts, and I would like the opportunity to see a little more of the country.
One reason to go back would be to revisit PricewaterhouseCoopers, KPMG and several of the people whom we met there to discuss their analysis of the investments of the Chinese financial system, Bank of China and so on. Forgoing what appeared to be easy profits from investing in the wrong end of the American housing market and adopting a long-term and stable view of investments will pay off for them. Given the recent crisis, we could learn lessons from them.
The hon. Gentleman makes the point better than I would be able to, and I agree with everything he said. We are not making as much as we could of existing possibilities. Enforcement issues, consistent implementation of intellectual property rights, market access, red tape and subsidies to domestic companies all continue to feature among the barriers to doing business in the market. Such concerns need to be fully addressed in order to support UK exports and investments. We really could and should be doing better. My goodness, having visited Shanghai, I can understand why the Americans are slightly fearful of the competition.
I shall end with just a few remarks about the Essex-Jiangsu partnership. As all hon. Members know, Essex is the finest county in the country, and it always leads the way. The Essex-Jiangsu partnership has been running since 1988 and was formalised in 1992 by Lord Hanningfield, who just celebrated 10 years as a Member of the House of Lords. It was established with the overall goal of developing firm and long-term bonds with Jiangsu province and creating a harmonious relationship between Essex and China, and it has indeed done that.
The partnership aims to give practical support from the Jiangsu authorities to the county’s exporters, and to attract inward investment to Essex. The relationship has already produced great benefits for the county. In 2006, 30 businesses, including three Essex companies that have since set up operations in the province, were helped to find opportunities in Jiangsu.
Thirty-five Essex schools are actively engaged in curriculum links with Jiangsu schools, and a group of 12 primary and secondary schools has pioneered a successful drive to promote the teaching of Mandarin in Essex. Many teachers from Essex schools have already visited schools in Jiangsu and partnership links are developing.
The county council is aiming for the partnership to be recognised as the most productive relationship between a British local authority and a Chinese provincial government by 2010. Two years ahead of 2010, I am prepared to announce that it is the most successful relationship.
Essex county council is also holding a cultural festival to celebrate its 20-year partnership with Jiangsu province. Hundreds of celebratory events are taking place up to March 2009. This is a prime example of the kind of proactive, innovative approach to Chinese education and trade links needed in all parts of the UK and, as ever, Essex leads the way.
If we are talking about second languages in our schools, let us encourage Mandarin. It is a difficult language, and most of us have trouble speaking English, let alone a foreign language, but let us encourage people to speak Mandarin. As my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) said earlier, let us try to make the most of our opportunities.
I visited Shanghai zoo and I am determined that we secure a couple of pandas for London zoo—whether they will be leased or rented to us I do not know—and a couple for Colchester zoo.
This was a fun trip, but every member of the delegation would agree that it was worth while. I already had an image of China, but the trip changed my perception. What a wonderful country China is and what wonderful opportunities it provides for each and every one of us, particularly in these challenging times.
I thank my hon. Friends the Members for Nuneaton and Shanghai (Mr. Olner) and for Wirral, South and Beijing (Ben Chapman) for the way that they masterfully looked after us in Shanghai. It was by some way the best trip I have ever been on. It was the best prepared trip—we had a number of seminars, language tuition and a marvellous pre-run before we got there.
Everyone has said “Well done” to the Industry and Parliament Trust and I commend it for its utter professionalism, which was outstanding. I, too, have done an IPT fellowship: mine was with Motorola 10 years ago. Motorola was the first company in America to be in China, 25 years ago. That was a hard call.
I was pleased to be in Shanghai, having been brought up in Hong Kong. It was good to see, in a sense, a second side of the Chinese face.
Some of the presentations that we received were outstanding. I still remember the BP presentation on intellectual property. The Chinese have struggled with that, but they are trying to get to grips with it, and BP is taking a global lead on that with them.
I share hon. Members’ reservations about whether we are really clued-in to what is going on in China. I ask the Minister to set up a China council on the same level as the National Economic Council on the credit crunch that we are considering at the moment, because I do not think that Departments understand what is going on. If the 19th century was the British century for the world and the 20th century was America’s, last week the 21st century became the Chinese century. China has $3 trillion of reserves, which is much more than the Federal Reserve has and certainly more than the Bank of England and Frankfurt have. This is the changing of the guard and we were lucky to just be on the edge of it in May and June.
A totally new approach is required. I shall try to illustrate that by looking at our Foreign Office representation. In China, we have one embassy and four consulates for a population of 1.3 billion. In India, we have one high commission, three deputy high commissions and three trade offices for a population of 1.2 billion. In America, we have one embassy and seven consulates for a population of 302 million. In Europe, we have 27 embassies and nine consulates general for a population of just under 500 million. That works out, in representation terms, as one embassy or consulate in China per 260 million people and, in India, one in 172 million. That is completely wrong.
We are so out of—I cannot think what the word is. We have misread the tea leaves about China and India at every level of Government in this country. We have done some good things in India—for example, we set up the UK India Business Council, and the UK-India education and research initiative to look at universities exchanging students and courses and trying to build relationships—but we have not done that in China.
I hope that out of this—although it is too early for the Minister to comment—comes the recognition that we need to have a proper all-engaging discussion about what we do about China. The events of the past two weeks have been so profound that I am not confident that we get it. That was one of the good things about going on the trip: not only was there terrific fellowship from all parties, but it was good fun and hard work and, because we were well prepared, we got so much more out of it than has been the case on previous visits.
One of many statistics given in a presentation threw me completely: 80 new cities of 5 million people each will be built in China over the next 10 years. That means 400 million new houses and other buildings, including schools and hospitals, as well as roads and goodness knows what. The demand for British product would be absolutely enormous, but where are we? We are behind Germany and France already.
I agree. At the same time that that city has been built, we have had the Thames Gateway proposals. I am at the edge of that at Sittingbourne and Sheppey, but I can tell hon. Members that we will still have the Thames Gateway in another 20 years and not much will have moved. A fundamental shift in thinking is required and China is leading the way, although it has borrowed, largely from Singapore. There are models out there that we can use, but for some reason we are becoming more isolationist in our thinking, which, in a global environment, unnerves me.
Those 80 new cities built over the next 10 years will, with a combined population of 400 million, have twice the population of Britain, France, Germany and Italy. We have to get our minds round the staggering economic change that is going to happen in China.
There were many highlights to the visit, but I should like to pay tribute to my favourite architect, I. M. Pei. We were privileged to see his new, beautifully designed, elegant, sensitive museum in Suzhou. He has done that while finishing the new cultural museum in Doha. I do not know where he finds the time: he is only 91. I sense that the museum in Suzhou will be his last ever commission. It was wonderful to meet his daughter and to spend time walking round the building. As somebody who loves architecture, I would not have missed it.
I want the Minister—although he may not be able to say anything about it now—to galvanise his Department to go to No. 10 and create a China council.
I start, as my colleagues did, by paying tribute to the excellent work of the IPT. Sally Muggeridge and her team did a great deal to prepare us for this visit. I also thank the firms that sponsored the visit, including PricewaterhouseCoopers, Virgin and many others.
My interest in the visit came from two perspectives. First, my background before becoming a politician was in engineering and science, and seeing how China has developed industrially and technologically was of great interest to me. My other area of interest, which sparked my fascination with China, is education. My first visit to Shanghai just over two years ago was to two universities that were working closely with the university of Central Lancashire in my constituency.
The university of Central Lancashire has more than 1,000 students from mainland China, one of whom, I am sorry to say, sadly died last week in an accident when he was hit by a bus when on a bicycle in Preston. I send my condolences to that student’s family. Many students from China are in Preston studying at UCLan. Many are spending two years in China and one year in Preston to obtain a bachelor’s degree, and many are doing two plus two to obtain a master’s degree in a variety of subjects. Two and a half weeks ago, I was fortunate to attend the opening of the Confucius centre at the university of Central Lancashire in Preston with the Chinese vice-consul, who came from Manchester to attend the opening. My constituency and its university have many ties, and I have many interests.
When visiting China with the delegation, I was impressed to see that other educational institutions, such as Liverpool university and Nottingham, have a presence there with my university. I spoke to two young students from Liverpool university about their experience, which was reminiscent of mine 26 or 27 years ago, when I had a placement in Germany. The two students from Liverpool were studying in China and now see the world from a different perspective, in which China is becoming a major player.
To draw a parallel with my experience, I trained as an engineer 27 years ago in Germany. I had learnt the language and a great deal about the history of Germany and its people at a time when the Common Market was developing into the European Community and what we have now with the Berlin wall down—a European Union of 27 member states. What we have now in China, partly through the engagement with Singapore and the Government of Lee Kwan Yew at the time, is an opening up over the past 20 years, with huge technological advancement, huge technological investment and huge educational investment. Much of the value that we export to China is education, not only from my local university, but from other universities that I have mentioned.
To put into perspective what my hon. Friend the Member for Sittingbourne and Sheppey (Derek Wyatt) said, China has as many people studying for PhDs—not just bachelor’s degrees—as we have in the population of this country. One realises why, as my hon. Friend said, in the next 80 or 90 years, China will play a role in the world that America played during the last century and Britain played during the century before that. There are great challenges ahead and great opportunities.
My newly ennobled Friend Baron Mandelson of Hartlepool and Foy and the Minister have a big responsibility on their shoulders to ensure that Britain can work with our European partners to create the sort of market and economy that can compete with the challenges facing us from China. There are many opportunities, and British business could benefit from working with our Chinese friends and partners.
I have referred to the scale of the development at Suzhou, which is breathtaking. We are doing a little in this country to improve matters, and I had the pleasure last week of visiting Daresbury laboratory in Cheshire, which has become a science and innovation centre in the north-west. I spent six years working there as an electronics design engineer before coming into full-time politics. That institution should have had the Diamond project, but I shall not re-enact old battles. Nevertheless, it is developing leading-edge research facilities and the innovation that will drive many of the products and services that this country needs to compete with countries such as China, but that is happening on a much smaller scale than what we witnessed during our visit.
We need more investment in education, and science and technology. We have the expertise, the drive and the institutions, but we obviously do not have the population to provide the number of engineers and scientists to bring about that major competition. We can achieve that only through greater co-operation and, I dare say, integration with the European Union. Apart from competition, we can work together with China. We can co-operate through business and the technological links that we are developing. We can work together culturally through education and institutions such as the Confucius institute in my constituency and others throughout the country. We can work together politically through visits such as that organised by the IPT, and Government-to-Government relations, which are also important.
I have only one or two brief points to make, because my colleagues have made their points eloquently about the importance of the visit.
I shall not compliment IPT more than to say that the trip was the hardest-working one that I have ever been on, and the most fun, because, as my hon. Friend the Member for Sittingbourne and Sheppey (Derek Wyatt) said, we were properly prepared. That is not always the case with such visits. I thank all those who were involved in making the trip work by doing so much advance work with us, so that we understood what we were seeing when we got out there.
One of the great benefits of the visit was that Labour Members did not have to be present to hear the result of the Crewe and Nantwich by-election, although it came through with great speed. Conservative Members made no bones about relishing the majority that was secured for the time being in that by-election.
I was interested in the question of information technology and its liberalising or restrictive effect. We continue to need to work with the Chinese in that area, or they might go as far as insisting that everyone with a television requires a licence from the Government to watch it. We would not want to go in that direction, would we, Mr. Illsley?
My final and more serious point is that we were asked by our hosts whether we would like to see an industrial park. I was up for that because I have an industrial park in my constituency that provides around 1,000 jobs, so I am very proud of it and we work hard to keep it. The industrial park in China had 6 million people living inside it. When we visited the university, I said that it was good to have a university inside the park, and my host said that it was one of 10.
I went home to my constituency in Nottingham, where we have 31,000 people on incapacity and related benefits. The experience of being in China and seeing the pace at which things are moving, and comparing that with what was happening in my constituency, before the financial crisis, was sobering. I am not necessarily pessimistic, but all of us and particularly those of us who are in Government or who aspire to Government must learn certain lessons. We need to learn about long-term financial stability and long-term planning and about not looking at the next quarter’s results, but the next decade’s results. We need to invest for the future. It might be that we do that in a different way, but some of the fundamental lessons are to be learnt from China and we ignore them at our peril. There are tremendous advantages to looking at the long term, and part of that means looking for long-term partnerships with the Chinese Government, so that we can all benefit from a different regime and a different global economy.
I thank my colleagues for their tremendous fellowship on the journey and all those responsible for making it such a success. I am certainly one of those whose eyes were opened. I relished visiting a beautiful country and meeting some marvellous people.
I congratulate the hon. Member for Nuneaton (Mr. Olner) on securing the debate and the hon. Member for Wirral, South (Ben Chapman) on his joint leadership of the delegation, of which I was a part. I thank the Industry and Parliament Trust and the many British companies including Virgin, PricewaterhouseCoopers, BP, GKN, Arup and others who helped to make the trip so informative and such a success.
I should like to echo many of the themes discussed by the hon. Member for Nottingham, North (Mr. Allen). My motivation for going on the trip was that I had never been to China before. I am a reasonably well-travelled person and felt ignorant that I did not have any first-hand experience of a country that is becoming increasingly important both across the world and for Britain. I was interested in what the development of China meant for the British economy and people, and I was blown away by what I saw. My experience was so serious and dramatic that it had a profound impact on me and has influenced my thinking about politics and the future of the world.
I went with everyone else to Shanghai and one evening we were having a nice dinner in a building that was about five or six storeys high and was originally a British mercantile building. We were on the top floor of a restaurant overlooking the river and during the meal, I sat next to a British person who had been living in Shanghai for many years. He asked me what I thought of the view. It was night and the view was lit up, so that there was an Asian version of a Manhattan skyline on the other side of the river. It was an impressive backdrop and I told the person I was sat next to that I thought the view was fantastic and he said that 11, 12 or 13 years ago the area was all fields. That demonstrates the pace of change.
The hon. Member for Hertford and Stortford (Mr. Prisk) made the point that China has 1.3 billion people. There is an east-west divide, rather than a north-south divide, and on the eastern side—for the ease of mathematical breakdown—there are perhaps 300 million people who are part of the new economy. Within that area, perhaps 50 million to 70 million people—roughly the population of Britain—are consumers in the western sense. That shows China’s potential.
The hon. Member for Sittingbourne and Sheppey (Derek Wyatt) made the point that there is a reserve pool of labour of about 1 billion people. We, in this country, think of China as a great exporter; indeed, it is a great exporter, and that is an important part of the world economy. However, the domestic market in China will lead to huge changes for British business and is a big opportunity. It does not take a huge leap of imagination to realise that as more and more Chinese people increase their wealth and prosperity and become consumers themselves, the Chinese economy will be fuelled by the need to satisfy domestic consumption, not just international consumption.
Other contributors to this debate have mentioned the increasing quality of the Chinese work force. Too often in this country we think that all the Chinese do is make cheap clothes for western consumers to buy, and that that keeps down our headline rate of inflation. China does that extremely well, but Shanghai has about 400,000 university students. As the hon. Member for Nottingham, North said, we went to Shuzhou and looked around a university that was a joint enterprise with the university of Liverpool. We commented on what a successful university had been put together. There were 10 universities on one street and the students there were studying engineering, information technology and science. They were motivated and focused on what their studies meant for their country economically and their own life prospects.
China will overtake the United States. I agree with the point made about the 19th century being the British century and the 20th century being the American century. American still has a huge role to play in the world—not just economically, but militarily, culturally, politically and in other ways—but China is growing and growing in influence and I entirely endorse what has been said about how the British Government must respond to that. I welcome the new Secretary of State for Business, Enterprise and Regulatory Reform. It is important to have a politician of his stature and international reach in that role and I hope that he can bring his influence and political skills to bear to the advantage of our country.
The hon. Gentleman rightly mentioned the growth in levels of consumption in China. Considering the global turndown, does he agree that in production terms, ironically, it is even more important now for Chinese consumers to take up some of the slack in terms of the goods that the rest of the world is no longer seeking from its factories and other industrial outlets?
That is important. China is growing at a rate of 10 or 12 per cent. a year and will perhaps itself experience a dip, but the fundamentals in terms of medium and longer-term growth prospects for the Chinese economy are extremely good. It is an occasionally foolish or brave politician who makes critical observations about his or her own country, but I worry that, by contrast, we in Britain are sometimes gripped by a sense of national fatalism—whether in relation to the millennium dome, terminal 5 at Heathrow, Wembley stadium or the 2012 Olympics.
In China I was struck by the sense of opportunity and the pace of change. We have to be able to respond to that. However, we need to consider the crumbling infrastructure and the unsatisfactory levels of educational attainment in the British system. The hon. Member for Sittingbourne and Sheppey made a point about our inability to deliver infrastructure projects on time and on budget. We cannot afford to allow that indulgence to continue.
We allow ourselves to believe that there is some sort of settled world order. For example, when the G8 summit is held, the eight leaders stand on the stairs and, with the exception of the Japanese Prime Minister, they are all western faces—I was going to say men, but that is not the case with the German Chancellor. We think that that represents the global hierarchy; and it has done for a long time. I am not saying that America, Britain, Germany, France, Italy, or even Canada will not have a role to play in the future—of course they will. However, the order is changing and we have to reflect that changing order—whether through our Foreign Office, our national mindset or in the way in which our companies do business.
What are the potential risks for China? One risk is the enormous disparity in wealth. Shanghai is the only place in China I have ever been to, but it is like going to New York and thinking one has seen America; there is a lot of China beyond Shanghai. Some people still live in extremely straitened circumstances. It is difficult for any country—particularly one that claims to represent some sort of vaguely communist ideal—to sustain such disparities of wealth. As the hon. Member for Wirral, South said, the Chinese economy needs to grow rapidly in order to ensure that the gap does not grow to the extent that it causes greater social tension.
The depletion of natural resources is also an issue. If 400 million people move to cities in the space of a couple of decades, it has huge implications for raw building materials. We delude ourselves if we think that we are an advanced nation with a huge amount of environmental heightened awareness, and that the Chinese are not aware of such subjects. When we went to BP, I was struck by the fact that it had an American international director of global innovation—in BP terms, innovation means anything other than oil. I, or one of us, said to him, “You are an American, so why aren’t you in America or based in London?” He said, “Because if you’re interested in innovation and change, you have to be in the country where innovation and change is moving at the faster pace, and that is here in China.” BP is investing more in research in China than in its university partnerships in Britain and the United States.
The big question for China is whether it can let the economic liberalism genie out of the bottle but keep the political liberalism genie inside. We shall no doubt discover the answer in the months and years ahead, but if European Governments think that they can pull up the drawbridge and, with protectionism and restrictive labour laws, resist the changes that are happening in China, they are deluding themselves. The challenge for Britain is to show that we have the ambition, confidence, innovation, application, energy and education to compete and succeed. The task for the new Secretary of State, his ministerial team and officials and our country as a whole is to show that we can live up to that challenge.
It is a great pleasure to serve under your chairmanship, Mr. Illsley. It is also a great pleasure to take part in a debate secured by my old friend the hon. Member for Nuneaton (Mr. Olner). I shall let hon. Members into a little secret. I did my Industry and Parliament Trust fellowship with British American Tobacco and I used to be given free cigarettes, which I gave to the hon. Gentleman. I hope that that has not contributed to the fact that he is retiring from the House at the next election. The House will miss him sorely when he does retire. It was great to hear from him this morning.
I congratulate the hon. Gentleman and the chairman of the all-party group on China, the hon. Member for Wirral, South (Ben Chapman), on jointly leading what was obviously a fantastic trip. I think that the Minister and I are feeling rather left out. We seem to be the only ones in the debate who were not on that trip, but I cannot really feel left out, because I have been to China twice and I am to go to Hong Kong and China again in November. What has been said today proves that we need to understand a great deal more about that rather strange country that many people in this country do not know enough about. By travelling and seeing with one’s own eyes what is going on there, one can get a snapshot of how the world is changing.
I echo the comments made by the hon. Member for Wirral, South. The world is changing, in his excellent phrase, from occidental to oriental. Having been to a number of other south-east Asian countries, I know that the world is moving eastwards. We need to use all our assets to try to get into that world with trade and everything else. Currently, not enough of those assets are used. The hon. Member for Sittingbourne and Sheppey (Derek Wyatt) mentioned the figures for the UK consuls. We need to use the Foreign Office, UK Trade and Investment, the China-Britain Business Council, the British Council, the BBC World Service and, indeed, our ancient contacts with Hong Kong to get into the Chinese market. We do not use those contacts enough.
Let me put the Chinese market in context. Whereas the gross domestic product per head in America is $45,000 and in the UK is $33,000, it is only $5,300 in China and $2,700 in India. The staggering facts are that, over the past seven years, whereas the US has grown by only about one third and, interestingly, the figure for the UK has doubled, the figures for China and India have gone up by three times. That gives an idea of the pace of relative change of the so-called western world and the eastern world. I take on board the fact that China’s economy is predicted to be larger than that of the US by 2040.
Several hon. Members have criticised the fact that our trade deficit with China is growing—a fact that we need to bear in mind. It has grown by 67 per cent. in the past six years alone. We are importing more goods from China, and yes, in many ways that is good for the economy. Contrary to what was said, I think that that is deflationary because we have been importing cheap rather than expensive goods. I think that we have had a deflationary effect from our trade with China, but ultimately we must try to ensure that the trade gap with China is closed.
There was a lot of criticism in the debate. I do not want to major on that, but my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) put his finger on the issue. The fact that we have nine regional development agencies, all with offices around the world, many in the same city—for example, Shanghai—pitching for the same business, dilutes the UK brand. It was said that in the past 10 years France has doubled its trade with China and Germany has trebled its trade, yet Britain still lags behind. I spent a great deal of time with UKTI earlier this week, but with the best will in the world, Britain needs to do a better job. It simply is not doing a good enough job.
China has had five golden years of economic prosperity, but as the hon. Member for Wirral, South mentioned, there are fears that the Chinese economy is slowing. Inevitably, with the worldwide financial problems that we face, China’s economy will slow from a growth rate of 10 per cent. perhaps to 8 per cent. or less. The real worry for the world at the moment—or perhaps the benefit; I am not sure—is that Chinese factories are beginning to slow down. They are using less commodities, which is why we are seeing a drop in commodity prices and particularly in oil prices, from a high of $140 a barrel to the current price of about $90. That may help the world to recover.
We need to consider carefully what China is doing in respect of its trade with the rest of the world. We have heard about the sovereign wealth funds—huge funds. The figure given was $1.8 trillion; mine is $1.5 trillion. Nevertheless, those are enormous funds, built up from currency reserves. If they are used benignly, as seems to be happening at the moment—for example, a 9 per cent. stake has been taken in Morgan Stanley and a 3.1 per cent. stake in Barclays—that can be a very positive thing for the world.
What we do not want is China using its might through sovereign wealth funds or, indeed, its trade with Africa for unfair trade advantage. We want to watch carefully what the Chinese are doing in Africa, because we want to see fair treatment of African countries. Basically, what China is doing in Africa is providing infrastructure in return for mining rights. Those deals need to be scrutinised very carefully to ensure that China is not mortgaging the future of some of those countries.
I congratulate the chamber of trade in the area represented by my hon. Friend the Member for Southend, West (Mr. Amess) on the Essex-Jiangsu partnership. That is a fantastic effort. It is a pity that the Government cannot follow that effort by promoting the same proportion of trade leads as Essex county council manages to do. Essex chamber of trade may well have something to teach UKTI and the Government on how to do business with China, because it is clear that we are not doing the amount of business that we should, and fears have been expressed about the effectiveness of the China-Britain Business Council. I do not want to knock the council; it has done a great deal of good over many years, but that does not mean that it cannot improve its performance from now on.
The other important factor that my hon. Friend mentioned was the need to teach Mandarin in schools. He may be interested to know that a school in my constituency is a Chinese academy and teaches Mandarin. I got the Chinese ambassador to go to the school, and the delight of the children—not so much the delight of the ambassador, because their Mandarin was not up to his expected standard—in being able to converse with the ambassador in Mandarin was fantastic. We perhaps need to stop the over-preponderance of teaching French in this country and start to teach Mandarin and Spanish, which are two of the most widely spoken languages in the world.
The market that we are discussing is huge. China has 1.3 billion people. It has moved 200 million people out of poverty in the past 10 years. They have moved from rural to urban areas. There is still a huge disparity of wealth between the rural and the urban areas. I have been into the hinterland in China. I have seen some of that disparity of wealth, but I have also been to Urumchi, which is one of the cities in the far west, and it is similar to a modern western city, so whereas everyone talks about the eastern seaboard with regard to doing trade with China, there is plenty of trade to be done within China.
I have a lasting memory of China—I almost lost my life there. I fell 20 ft down a concrete shaft in China, but I survived and I am going back, because I want to discover more about that exciting country. It was when I was in Urumchi, talking to the Speaker of that Parliament, that I coined the phrase that the 19th century belonged to Britain, the 20th century belonged to America and the 21st century will belong to China.
We must make friends with China. We must do more trade with it; we must have more cultural links with it; we must have more exchange with it; and we must have more educational exchange with it. Every time I have visited China, I have been to a school: to see those young people’s enthusiasm for learning English is fantastic. We should capitalise on the fact.
Thank you, Mr. Illsley, for guiding us this morning. I thank my hon. Friend the Member for Nuneaton (Mr. Olner) for hosting our debate.
As we heard, the genesis for this debate was the Industry and Parliament Trust’s visit to Shanghai and Suzhou in May. We heard many contributions from hon. Members who were on that trip. The visit obviously had a profound effect on those who went. We also heard praise for the IPT. I read with pleasure the blogs, diaries and various accounts written by hon. Members during and after their trip. What struck me was the scale and speed of the changes in China, which had an impact on everyone on the trip.
The group visited China shortly after the earthquake. I therefore record the Government’s support for the recovery effort in Sichuan province, noting that the former Secretary of State for Business, Enterprise and Regulatory Reform, the right hon. Member for Barrow and Furness (Mr. Hutton), now the Secretary of State for Defence, visited China a few weeks ago. During his visit, he met the Government to discuss how United Kingdom companies could contribute to the huge reconstruction effort that will be required. Construction firms, architects and many others will be needed; if we can, contributing to that as a country is something that we would want to do.
The underlying question today is whether the Government and the country get it. I believe that we do. Among world leaders, my right hon. Friend the Prime Minister is uniquely focused on the opportunities presented by globalisation. The changes in the world order that we heard about today—the rising importance of China, India and other countries—is a constant thread running through my right hon. Friend’s speeches and policies, and the stance that he wants Britain to take. That is not surprising because the economic world order is changing in a big and fast way.
The assumptions of the 20th century will not hold in the 21st century. All countries, including the UK, must reassess their priorities in trading and business. Although any discussion of globalisation must take as its backdrop the events of recent months and weeks, I do not want to go into detail; the Chancellor has made many statements to the House in recent weeks outlining the Government’s response. However, Britain must not allow the recent financial storms to alter our stance as a globalisation optimist—as a county that believes in looking outward and making the most of trading opportunities around the world. We will not allow that to happen; we will continue to be champions of openness and flexibility, and not retreat into protectionism or economic nationalism.
On one point, I gently disagree with my hon. Friend the Member for Sittingbourne and Sheppey (Derek Wyatt). He said that we were becoming more isolationist. I believe that the events of recent weeks have proven profoundly that that is not the case. We are not becoming more isolationist; we will continue to champion openness and flexibility, always being outward-looking.
In the time available, I shall respond to some of the points raised during the debate, in particular about British business opportunities with China. The first, on a political level, is how seriously we take engagement with China. There are regular high-level political meetings with China. There is an annual prime ministerial summit; this year, it took place in January between the Prime Minister and Premier Wen. As a result, a range of new trade and economic collaboration activities was announced. That includes a bilateral trade target for trade in goods and services that will reach $60 billion by 2010, which represents a 50 per cent. increase over 2007.
There was agreement also on a high-level annual economic and financial dialogue between the Chancellor and Chinese Vice-Premier Wang Qishan; we will be the first European Union country to match similar existing arrangements between China and the EU and China and the United States. There is also an agreement to maximise trade and investment in the environmental sector. We are pursuing that in many ways, including through the sustainable cities initiative, which also featured during the Secretary of State’s recent visit. Obviously, a host of ministerial visits took place at the time of the Beijing Olympics. However, over the past year the Secretary of State visited China three times; the Trade Minister, Lord Jones of Birmingham, visited twice; and the Lord Mayor of London visited once. Those high-level visits are an important part of our strategy.
I turn to the backing for our business presence in China. UK Trade and Investment has been a key element on those visits. It includes not only politicians; often there are high-level business delegations. UKTI works to support British business in China, with the aim of delivering a measurable improvement in the business performance of UKTI’s trade customers, improving two-way trade with China, dealing with the question of market access and beating the drum for British business in China.
Reference was made to the numbers involved in the UKTI operation. It is the biggest such operation in the world. As my hon. Friend the Member for Wirral, South (Ben Chapman) said, its numbers have increased by 25 per cent. over recent years. Hon. Members say that they want more. Of course people want more, but that is evidence that we take the matter extremely seriously. We are putting more resources into it.
I say this in a constructive way. When I talk to people in China and elsewhere, they say, “Yes, we get plenty of high-level visits, and plenty of interest for business in the first flurry, but somehow that interest is not translated into actual business.” I ask the Minister, with UKTI, to see whether we can improve on that aspect.
I thank the hon. Gentleman for that most important intervention. I am glad that he made it. Of course, it is important that visits are backed up by results. Our exports to China have increased significantly in recent months.
Reference has been made to the new Secretary of State, Lord Mandelson. He will be an important addition to our armoury when increasing business and trade opportunities. Few people in the world have his experience of China, and many countries would like someone with experience as a Trade Commissioner to join their Government in order to champion that policy.
The question was raised of whether our representation in China is right. We have the embassy; and we have three consulates that operate each in their own area. The point has been made that we have too many offices—and that we have too few. The point has been made that local offices for the regions clutter the process—and that local offices are valuable in providing links to the local area. We must make up our minds on whether we want more or less and whether we want local or national.
We are right to seek value for money. A review by Arthur D. Little and others made certain recommendations, which we shall put into practice, to ensure that the taxpayer gets the best value for money from our important trade representations in China.
I would like to say more, but time does not permit me to do so. The issue is hugely important, and as a Government we do get it.