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Friday, 12 November 2010

12 November 2010

What do you think is the real reason why David Cameron was in China this week?

I’ll give you a clue: he took nearly 50 British business people with him. So yes, just like President Obama a year ago, President Sarkozy in April, and Chancellor Merkel in July, he was knocking on Beijing’s door and asking: “Scuse me, would you like to buy anything?”

World leaders sometimes give the impression that they see only two things when they stare at China on a map: lots and lots of people, and lots and lots of money.

Some critics find this unedifying. Shouldn’t world leaders have better things to do than hop on a plane to China and plead for a bit of business? Well, it may be unedifying, but let’s just look at some numbers.

When Angela Merkel was in Beijing, Germany signed 10 commercial agreements worth more than $4 billion. The biggest slice of the action went to Siemens, which came away with a research and development deal worth $3.5 billion to provide steam and gas turbines.

Which helps to explain why Germany is still by far China’s biggest trading partner in Europe. After all, they’re both major exporting nations, so it’s little wonder that they sell plenty of goodies to each other.

It also provides some useful context for this week’s announcement that Rolls Royce have secured a deal worth $1.2 billion to provide engines for China Eastern Airlines’ fleet of Airbus A330s. Not to be sniffed at, by any means, but not yet on a par with Germany.

Selling stuff to China means jobs back home. It’s as simple as that, isn’t it? And in these days of sluggish economies and high unemployment, aren’t jobs back home something we want our political leaders to concentrate on?

Perhaps there’s even a link between Mr Cameron’s trip to China and the overhaul of the welfare system that the government announced yesterday. If hundreds of thousands of people are to come off benefits and find real jobs in the real economy, well, those jobs will have to come from somewhere. And if some of them, directly or indirectly, are the result of deals struck in Beijing, I suspect there’ll be few complaints.

So what are we to make of the prime minister’s almost ritualistic remarks about China’s iffy human rights record? He knew, as do all visiting Western leaders, that he had to say something; but he also knew that if he wanted Chinese signatures on those contracts, he couldn’t overdo it.

The words may change from visitor to visitor, but the basic message is always the same: “We really think it would be a good idea if you loosened up a bit, allowed a bit more criticism, perhaps even permitted someone to challenge the Communist party.”

Or, as David Cameron put it: “The best guarantor of prosperity and stability is for economic and political progress to go in step together.”

I wonder how that sounds if you’re a successful Chinese businessman. Lessons in how to create prosperity, from a Europe struggling to emerge from recession? Talk of stability from the Europe of mass French pensions protests and British tuition fees demos?

One Chinese official was quoted this morning as asking, in the context of the G20 talks on global trade imbalances: “Why do you say we should take the medicine if you’re the ones who are sick?”

China is well aware of its economic strength these days. And it’s increasingly prepared to use that strength to bolster its security objectives. Just ask some of its neighbours, like Japan or South Korea, how they feel about China’s growing international confidence. You’ll get some very nervous looks.

I’ll have more to say about China in a couple of weeks’ time, for reasons that will soon become clear.

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