My Lords, I want to focus on three separate areas in my speech today to show how Her Majesty’s Government are pursuing sensible policies in two of them but are severely lacking in initiative on the third.
The first is Hong Kong, which I visited as a member of the All-Party Parliamentary China Group delegation in February, under the able leadership of my noble friend Lord Wei. Every aspect of our visit was excellently planned, from the detailed FCO briefing before we left to the full programme while we were there. Further credit is due to the Hong Kong Government and the consul-general there, Caroline Wilson, for their superb organisation and interest in hearing our feedback. The British Chamber of Commerce executive director, Christopher Hammerbeck, was a credit to the organisation, and our trade envoy, the noble Lord, Lord Marland, was most helpful.
What we learnt overall was totally contrary to my expectations. I had believed that the dead hand of communism would have stifled enterprise and initiative. After a week, I realised that the opposite is true. The Chinese have skilfully allowed, under the principle of “one country, two systems”, the entrepreneurial spirit to continue. Business is not weighed down by unnecessary regulation, tax rates are low and government finances are in good shape, while the focus of the economy has moved away from manufacturing and is now service based.
The UK is making an excellent effort to increase trade. Exports of goods were up by 21% in 2011. Noting the strength of our trade with China, I support the Prime Minister in not needing to apologise for meeting the Dalai Lama. He should note that every US president has met the Tibetan spiritual leader, and this has not affected the USA’s exports to China as a whole, which are up 20% in dollar terms from 2010 to 2012.
The one area that seemed to cause concern to Hong Kong businessmen, as expressed at a fascinating meeting with the Vision 2047 Foundation, was that UK politicians’ visits to China were too often only to sign deals. The feeling was that not enough regular contact was being made outside these events. When I reported this back to the consul-general, her excellent suggestion was that I should express concern to BIS and the FCO, so this is what I am doing.
The second area I wish to discuss is Taiwan. I declare an interest as a member of the British-Taiwanese All-Party Parliamentary Group, having made visits to Taiwan under its auspices in 2011 and 2012. The country is fascinating as it has made great strides to a two party democratic system. President Ma, who was elected for a second term last year as KMT president, has taken the pragmatic and sensible view that it is better to improve relations with the mainland, which had fallen into a parlous state, through increasing trade links and travel between Taiwan and the mainland. Noble Lords may not know that 1 million out of a population of 23 million work on the mainland. Since 2008, the number of weekly flights between Taiwan and the mainland has increased from zero to 616. There have been 18 cross-strait agreements with the mainland. As a result, the Taiwanese economy showed excellent growth overall during his first term although, like many other countries, it has suffered more in 2011 and 2012.
Although we do not have an ambassador in Taiwan, I was very impressed on both visits with the very good work that our British trade and cultural representative, David Campbell, who has just retired, has done there. He had an excellent finger on the pulse of the political scene, business and cultural opportunities. In 2012, the UK was Taiwan’s second largest trading partner in Europe. An EU-Taiwan economic co-operation agreement would further strengthen the relationship. Can the Government help progress this?
As stated, the Government are in general pursuing the correct policies with regard to Hong Kong and Taiwan. I wish I could say the same about our relationship with Cyprus. I declare an interest as a member of the all-party Northern Cyprus group. The current dispute between Turkish and Greek Cypriots is now more than 40 years old. Over those 40 years, there have been many serious attempts by people of good will from both sides of the island and from outside organisations to bring about a resolution. All those attempts failed and all had one very significant fact in common: as noble Lords might expect, they all used the political machinery of the island as the primary, if not the sole, mechanism for negotiation. Perhaps repeated failure of essentially the same process, albeit with different actors, should come as no surprise. However, at some stage, those involved have to address the obvious question of whether it really makes sense to do the same thing over and over again and expect something different to happen. The two communities seem to be resigned to the status quo. Research conducted last July shows that over 70% of both communities now feel that they should assert their own rights, even if it means that members of the other community would be adversely affected. The same survey revealed that only 14% of Turkish Cypriots and 39% of Greek Cypriots would prefer a feasible solution now to an optimal solution sometime in the future.
This is all regrettable but does it really matter? The two sides are de facto separate states. I believe that it is very important to the people of Cyprus, the people of the eastern Mediterranean and to Britain. The eastern Mediterranean is now more troubled and unstable than at any time in the past decade. We have a civil war in Syria, enormous tension between Iran and Israel and unresolved situations in Libya and Egypt. Now, in addition, there are the problems raised by the huge gas finds in Cypriot territorial waters. Exactly who that gas belongs to and in what quantities, how to develop the fields and how to transport the gas are all questions which, if unresolved, are highly likely to add severely to the political tensions. They may also stop the gas fields being developed at all in the foreseeable future.
Last September, Alexander Downer, the UN envoy who has struggled for many years to achieve a settlement, said that the Greek and Turkish sides now had a strong economic reason to agree to a reunification that would reduce the sovereign risk of investing in Cyprus, clear up the problems of investing in property, grow GDP and offer the capacity to service and pay off debt. The British Foreign Secretary made a similar comment when he said last autumn that,
“we have supported the rights of Cyprus to develop resources, but I hope that doing so can somehow be an incentive for a settlement to the problem, rather than a disincentive”.
How the banking crisis among the Greek Cypriot banks will affect the issue is still a matter for conjecture. However, if you are to compare the state of the Turkish economy, which is booming, and the Greek economy, which is in a state of collapse, a neutral observer would say that more Turkish input to the Cyprus economy would be hugely beneficial.
The UN Secretary-General’s report of March last year stated,
“Civil society also has a crucial role to play in building public confidence in the process. Unfortunately, civil society organizations, and women’s groups in particular, remain outside the framework of the negotiations. I therefore call on the sides”— and indeed the FCO—
“to step up their engagement with civil society and women’s groups, with a view to building public confidence in the benefits of a settlement”.
This view has been repeated by James Ker-Lindsey of the LSE, and was hinted at by the House of Commons Foreign Affairs Committee in its report of March of last year. This opinion was strongly expressed by myself and many others in the Moses Room debate on Cyprus on