China: forty years on and a new chapter opens…

15 March, 2012

From Iain Ferguson in Beijing

As Ambassador Sebastian Wood recalled, opening the first Wilton Park conference to be run in China, it was on this very day, in 1972 that Britain established full diplomatic relations, at Ambassadorial level, with the People’s Republic of China.

“Our relationship is better, stronger and bigger than ever before in the history of our two countries, said Li Jingtian, Executive Vice President of the Central Party School of the Communist Party of China – Wilton Park’s partner for the seminar. “We have potential to see very dramatic acceleration related to the subject of this conference; the measures we need to take to ensure prosperity.”

Wilton Park and the Party School gathered top experts in economic development to discuss how economies can be rebalanced to achieve sustainable growth, promote world trade, reduce protectionism and achieve effective economic governance through the G20 and other organisations.

For all the non-Chinese participants, savouring their first visit to the Party School campus, there was a real thrill in debating these issues in the intellectual power house where China’s elite leadership is trained.

The discussion centred around three key issues:

  • The first, to explore the different ways the Chinese economy is seen from within and without; the rest of the world ranks China as the second biggest economy in the world, while China sees itself as the 93rd based on GDP per capita.
  •  The second, to discuss Chinese expectations of global institutions like the WTO and G20 compared to those of the West.
  • And the third, to explore China’s response to Western calls for it to take a more forthright leadership role in breaking the stalemate on world trade talks and enabling the Rmb to become a world reserve currency.

“The world needs China to become a leader; if China doesn’t rise to the challenge no-one else can take on this role.” said Gerard Lyons, Chief Economist at Standard Chartered Bank.

Lou Jiwei, President of the China Investment Corporation, explained China’s position: “The West see China as part of the world imbalance but the West does not see the fundamental imbalance within China and we have to deal with that first before we can play a bigger role in tackling the global imbalance.”

Speaking in the run-up to this autumn’s 18th Party conference that will decide China’s leadership for the next decade, Lou Jiwei set out three key priorities for economic development:

1.         Managing urbanisation successfully

2.         Creating the right conditions to foster innovation

3.         Overhauling the regulatory framework to match current needs.

There was unanimous agreement that the conference had helped move this agenda forward and set very high standards for future events in the series.

“It was an absolutely exceptional intellectual exchange” said Philippe Legrain, chief economic adviser to the President of the European Commission.

“UK-China co-operation has moved from dialogue to generating mechanisms (to facilitate trade) and now we need to move from mechanisms to creating the right institutions for effective global economic governance,” said Liam Byrne MP, Shadow Secretary of State for Work and Pensions.

And as I closed the conference, trying to capture the tone of the meeting, I said:

“We have a lot to gain by talking to each other, by working together and by tackling the world’s difficult problems together. We have much to look forward to as we develop the next conference working closely with our partners in the Central Party School.”

 

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