China: Exports — Question

– in the House of Lords at 3:30 pm on 11th December 2013.

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Photo of Lord Wei Lord Wei Conservative 3:30 pm, 11th December 2013

To ask Her Majesty’s Government what assessment they have made of the prospects of increasing United Kingdom exports to China following the trade missions led by the Prime Minister and the Chancellor of the Exchequer.

Photo of Lord Livingston of Parkhead Lord Livingston of Parkhead The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills

My Lords, last week I was delighted to help the Prime Minister lead the largest ever UK business delegation to China. Our bilateral trade and investment relationship with China is improving. Exports to China have almost doubled since 2009 and more Chinese investment has come into the UK in the past 18 months than in the past 30 years combined. However, there is more to be done, especially in focusing on areas where the UK has particular strengths and where these match China’s emerging demands. Many of these strengths—healthcare, education, the creative industries and agri-tech, to name but a few—were showcased last week. Several agreements in these sectors were signed during the visit and these will open further opportunities for UK exporters.

Photo of Lord Wei Lord Wei Conservative

I thank my noble friend the Minister for his response. I look forward to the future growth in exports that will result from these significant and much needed visits, and congratulate him on the role that he played in the most recent one. We know that inward investment from countries overseas such as China and India can help build our capacity for exporting, with Jaguar Land Rover, Aquascutum and many other companies showing the way. However, our current measures of success do not necessarily capture the interactions between such investment and exporting. What are the Government doing to encourage, measure and link investment and exporting activities from countries such as China to grow total trade?

Photo of Lord Livingston of Parkhead Lord Livingston of Parkhead The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills

I thank my noble friend Lord Wei for that point and his efforts in promoting UK-Chinese trade. He is right to raise a number of areas, including export from the UK, imports from China and our relationship as regards investment. During the trip, I was delighted that we announced programmes that will help UK investment in China and Chinese investment in the UK, particularly in the area of the supply chain. We have found that, in a number of areas, to be important in improving our overall trade performance.

Photo of Baroness McIntosh of Hudnall Baroness McIntosh of Hudnall Deputy Chairman of Committees, Deputy Speaker (Lords)

My Lords, the noble Lord mentioned the creative industries. He will be aware that the delegation of which he was part included members from the cultural sector, including Sir Peter Bazalgette, chair of Arts Council England, Nick Starr, executive director of the National Theatre, and Joey the Horse, the puppet star of the National Theatre’s production of “War Horse”. Does he agree that the cultural sector in this country, particularly the performing arts, is widely respected the world over for the skills and products that it can export? Does he also agree that this is a good reason for the Government to continue to give the cultural sector the maximum possible support?

Photo of Lord Livingston of Parkhead Lord Livingston of Parkhead The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills

I thank the noble Baroness for her comments and absolutely agree that this was one of the highlights of the trip, particularly Joey the Horse, who got a standing ovation at the gala lunch that we held. Joey was the star of the trip, after the Prime Minister of course. It was not just in culture that our DNA was represented, but in the Premier League as well. This not only has export potential in its own right but is an expression of British soft power and its opportunities. We will certainly make sure that we include the creative industries as part of our overall export effort, and I thank the noble Baroness for her comments about our support of the cultural sector.

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

My Lords, I warmly welcome my noble friend to his new role, and the success of the Prime Minister’s visit to China. I declare an interest as a partner of a law firm. Why did the Prime Minister not find room in his huge delegation for any representative of the UK legal services sector? The sector contributes some £3 billion to our professional services exports; it provides crucial commercial and dispute-resolution services and support for British businesses around the world; and, not least, will help them to take advantage of the new Shanghai free trade zone. I realise that not everybody wants to be accompanied by a lawyer on their travels.

Noble Lords:

Hear, hear!

Photo of Lord Clement-Jones Lord Clement-Jones Liberal Democrat

However, seriously, how does this square with the continuing support that is being given by the MoJ and UKTI to boost the growth of the legal services sector internationally?

Photo of Lord Livingston of Parkhead Lord Livingston of Parkhead The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills

My noble friend is correct that the legal services sector is one of the most important sectors for the UK. He may not be comforted by the fact that we took some accountants on the trip. The law firms were represented, particularly in discussions on the Shanghai free trade zone, in which the UK is going to provide excellent support. The UK legal sector is a great strength, not just as an export in its own right but as a reason for FDI into the UK, because it shows that the rule of law and support from professional services are very strong. I will certainly seek to champion the legal sector going forward.

Photo of Lord Davies of Coity Lord Davies of Coity Labour

My Lords, we know that nothing happens in China except by the leave of the Communist Party, which controls the whole of China. We know what the British delegation wants from China. Can the Minister tell the House what the Chinese want?

Photo of Lord Livingston of Parkhead Lord Livingston of Parkhead The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills

The Chinese refer to us as partners for growth. Particularly since the third plenum, the Chinese see a real opportunity to partner the UK in key areas, as China expands its cities and needs to make its environment greener—there are a lot of environmental issues in China. UK products are loved in China. The cultural sector was mentioned earlier. Yes, we can mention whisky. We have even been selling tea to China, which is remarkable. Going forward, the UK’s products and services are ideal for what China needs as a result of the change in its economy. We look forward to continuing to increase our exports to China, because we have a lot of ground to make up.

Photo of Lord Howe of Aberavon Lord Howe of Aberavon Conservative

No doubt my noble friend is aware that during the past year, the China Investment Corporation—a sovereign wealth fund—has taken a 9% stake in Thames Water and a 10% stake in Heathrow. This year, another Chinese corporation, Advanced Business Park, has said that it will undertake a £1 billion redevelopment of the Royal Albert Dock. Is it not clear that we are looking not at a single arrangement but at a joint, substantial, two-way partnership between the two countries?

Photo of Lord Livingston of Parkhead Lord Livingston of Parkhead The Minister of State, Foreign and Commonwealth Office, The Minister of State, Department for Business, Innovation and Skills

I thank my noble and learned friend for that comment. We are certainly seeing substantial investment from China into the UK—and, indeed, vice versa. We visited a city where Diageo has made a large acquisition. WPP is a very strong firm in China. It certainly is a partnership. China, as one of the most powerful nations in the world, having a stake in the success and growth of the UK economy is certainly no bad thing either.