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Boost Trade? Just Make British Chinese More Politically Active

August 28, 2013 10:45 AM
By Merlene Emerson in London Loves Business

We should not be running scared of Chinese investment, says the London Assembly Candidate and co-founder of the Chinese Liberal Democrats

Canary Wharf with Chinese flag When Dalian Wanda, one of China's largest conglomerates, purchased the UK's leading luxury yacht manufacturer Sunseeker Yachts in June, Wanda's chairman Wang Jianlin spoke as though the £320m deal was little more than loose change.

"We wanted to buy 30 Sunseeker yachts because we are planning to build three marinas here in China," said Mr. Wang. "So then we thought it would be a better deal if we just bought the company."

Such a can-do attitude has been hard to find in London, at least since 2008, with businesses large and small struggling to drum up investment. But Chinese investment in the last few years has being growing - and London could do with more of it.

So far this summer, plans have already emerged for a £1bn Chinese business hub in London Docklands and the purchase of the Lloyds of London building by insurer Ping An. A currency swap agreement between the UK and China was also agreed in June to go alongside prior investment in British brands and organizations as diverse as Weetabix, MG Cars and Thames Water.

But some in the UK have concerns. Despite picking up some of the slack caused by the economic downturn, Chinese investment into London and the UK as a whole is still viewed with suspicion. The growth of telecoms Huawei in particular has proved contentious.

Beijing does not always help the issue.

China has a policy of encouraging Chinese companies (both state owned and private) to venture overseas. But political posturing by the Chinese government has led to British politicians being slighted following the meeting by Cameron and Clegg with the Dalai Lama in 2012.

Senior sources in China had warned of serious consequences in relation to bilateral trade as a result of the meeting. But such issues shouldn't cause a major rift if there are benefits for both sides from continued Chinese investment in London.

London already has an advantage when it comes to attracting Chinese investment in its large and established Chinese community. However, more can and must be done to leverage this community.

For starters, we must do more to better engage second and third generation British-Chinese in politics. The UK's Chinese community is underrepresented at almost every level. If we can reverse this trend it will ensure the UK becomes an even more attractive place for Chinese investment.

We must also lower our restrictions on work visas for Chinese graduates. With more than 100,000 Chinese students currently studying in the UK - many in London - we are doing irreparable damage by making it all but impossible to stay on and work in the UK after graduation. This is sheer folly when these students are in a unique position to drive the future of UK-Chinese trade.

If we send them packing, we will hurt not only our economic ties with China - but also our universities as potential students turn to the US, Canada or Australia instead.

The UK must also lobby the EU to do a better job at building up close trading relations with China. The ongoing dispute over a controversial levy on Chinese solar panels for instance must be sorted out as soon as possible, especially over a sector as important as renewable energy.

There is further work to be done at home and fear mongering that Chinese investment in property, blue chip companies and utilities will leave the nation at the whim of Beijing, is unfounded. There has been nothing to suggest that Chinese investment has sought anything other than a decent return and mainland investors largely allow companies to continue operating as they were.

The benefits of ironing out the kinks and keeping the RMB rolling in are widespread. As China's middle class grows they will likely want to pour in more money to the capital. The boost they have provided British luxury brands like Burberry could be just a snapshot of what is to come.

The opportunities for collaboration, growth and investment remain ample, especially as the mainland continues to relax. London is in a great position to benefit from this but we must act decisively now to ensure we don't miss out on the boom.