It is in the interest of cash-rich China to help resolve the eurozone debt crisis, but Chinese premier Wen Jiabao, who is visiting Britain and Continental Europe, will want a share of the West’s buying power in return .
As Wen Jiabao, the Chinese premier, stepped off his plane in Birmingham on Saturday, it was difficult to avoid the feeling that the UK, and Europe, have never looked weaker in Chinese eyes.
In private, senior Chinese diplomats are now openly scornful of Britain’s economic prospects and have even asked why Mr Wen should grace such a weak trading partner with three days of his time.
Indeed, it is telling that the first stop on Mr Wen’s tour is Longbridge, the old MG Rover car factory that passed into Chinese hands in 2005. Once a byword for poor productivity, wildcat strikes and trade union power in its British Leyland and Austin Rover days, the plant is now host to China’s biggest industrial presence in the UK. Owned by Shanghai Automobile Industry Corporation, the factory designs and assembles MG cars in the UK made from car parts manufactured in China.
However, the Longbridge site remains the only major example of Sino-British co-operation, something that the Prime Minister, David Cameron, whose advisers have helped co-ordinate the visit, is determined to change.
On Mr Cameron’s visit to China last year, a target was announced for increasing bilateral UK-China trade to $100bn by 2015, from its 2010 total of $63bn and Number 10 sources said yesterday that they believe that “progress has been made” on hitting that figure.
Whether much more can be achieved depends partly on the success of the visit, which includes a formal summit in London tomorrow with a 35-strong Chinese delegation including China’s foreign minister Yang Jiechi, vice-minister for foreign affairs, Fu Ying, and minister of commerce, Chen Deming.
In formal business and personal conversations between Mr Wen and the British trade minister and former HSBC chairman Lord Green, who is accompanying the premier around Longbridge today, the UK message will be about further strengthening state and business ties with a view to achieving growth and sending that bilateral figure higher.
Meanwhile, Culture, Media and Sport Cabinet minister, Jeremy Hunt, who is accompanying Mr Wen to William Shakespeare’s birthplace of Stratford-upon-Avon, will be seeking to set up a formal structure of future summits to develop better “people” relationships between the countries with a particular focus on education, science and culture.
In London, where Mr Wen may go, apparently, for a jog in Hyde Park, the main topics for discussion will be the weighty topics of climate change (China is now one of the world’s leaders in green technology), the global economy, international security and development.
While Number 10 was refusing to comment yesterday on what else could be on the agenda, the Middle East and the economic crisis in Greece are also expected to come up for discussion.
Yesterday, at the start of his European visit in Hungary, Mr Wen gave a strong pledge of China’s support for the embattled euro, saying that China will buy Hungarian government bonds and “consistently” support the euro as Europe attempts to fight its way out of a sovereign debt crisis. “China is a long term investor in Europe’s sovereign debt market,” he said at a press conference with the Hungarian Prime Minister, Viktor Orban. “In recent years we have increased by quite a big margin our holdings of government bonds. We will consistently continue to support Europe and the euro.”
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