China: British Business Mission (Hansard, 26 March 1985)

§ Lord Taylor of Blackburn
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ Lord Young of Graffham
My Lords, the proposal that I should lead a high level British business mission to China was put forward by my right honourable friend the Prime Minister when she met the Chinese Premier in Peking in December. In choosing the members of the mission I had the benefit of advice from the Department of Trade and Industry and from the British Embassy in Peking. My intention was to put together a high level team reflecting a broad range of British advanced technology in the fields to which the Chinese attach economic priority, including energy, transport, communications and the modernisation of industry. I also wanted to include a representative of the service industries, reflecting the importance of invisible exports in Britain's overseas trade and the potential for increasing our trade with China in invisibles.
The 11 members of the mission were: the noble Lord, Lord King of Wartnaby, a Member of this House; the right honourable James Prior, chairman of GEC; Sir Duncan McDonald, chairman of Northern Engineering Industries; Sir Eric Sharp, chairman of Cable and Wireless; Mr. Harry Harrison, chairman of Simon Engineering; Mr. Dennis Jackson, a director of corporate stategy and international affairs of Rolls-Royce; Mr. Dick Giordano, chairman and chief executive of BOC; Mr. John Glasscock, deputy chief executive of British Aerospace; Mr. Roger Kingdon, chief executive of Davy McKee; and Mr. John Swinglehurst, director of the Sedgwick Group.
The high level nature of this mission was reflected in the level of our reception by the Chinese authorities. Our host was State Councillor Madame Chen Muhua, Minister of Foreign Economic Relations and Trade. We were also honoured to meet, in Peking, Premier Zhao Ziyang, Vice-Premier Li Peng, and a number of other Ministers and Vice-Ministers.
We were also received at the highest level by the municipal authorities in Shanghai and by the provincial and municipal authorities in Canton. A number of agreements were signed by members of the mission in China. In addition, every member of the mission entered into discussions in the areas in which they hope to do substantial business in the future. Overall, I believe that the mission has made an important contribution to the future development of trade and economic co-operation between Britain and China.

§ Lord Taylor of Blackburn
My Lords, may I thank the Minister for his very full reply to the Question and may I also congratulate him on a very successful mission?—because all the information I have received since the noble Lord the Minister returned has been on 870 his side. I should be very grateful if he would make everybody aware of all the opportunities that they have got in trading with China.

§ Lord Young of Graffham
My Lords, I am very grateful indeed to the noble Lord for his comments. I believe it was considered by members of my mission that it was successful; but each and every member knew that he was acting not only as a representative of his own firm but also as a representative of British industry and commerce. We will give, and indeed we are at the present time giving, a great deal of thought to the best way of disseminating the lessons we have learnt, but I can assure your Lordships that two things will happen. First, we shall disseminate the information and, secondly, this will not be the only effort because we shall follow through and see whether we can at the very least bring up our level of trade with China to a level which is commensurate with the rest of the free world.

§ Lord Gisborough
My Lords, would my noble friend agree that, however much the Chinese may wish to buy our goods and however much we may wish to sell them, we cannot conclude a good agreement because they have so little currency? Would my noble friend agree, therefore, that it is just as important to make certain that they have an outlet for their goods in our country so that they can gain the currency to buy our own goods? In particular, would he encourage the Chinese, from an agricultural point of view, to take a pavilion at the Royal Show so that their goods can be on show and can be sold?

§ Lord Young of Graffham
My Lords, speaking from memory, last year China bought some 25 billion dollars worth of goods from overseas and at the same time exported 24 billion dollars worth. Their foreign debt, I believe, rose from five billion dollars to six billion. I should remind your Lordships that our trade with China last year was something like £300 million, so we have some way to go. There were suggestions when I was in China that we should consider some form of soft loans or the equivalent. Indeed, I read in today's paper that some soft loans have been granted by others of our EEC partners. My impression is, as was the impression of many members of my mission, that there is much business to be done on normal commercial terms. I will certainly pass on the recommendation about the Royal Show.

§ Lord Molloy
My Lords, would the noble Lord not agree that the principle of these visits can only do good in numerous ways? We should not only congratulate the noble Lord but indeed thank him as well. Would he also consider that in future there might be other visits, not purely based on the type of delegation which he led but visits that could involve cultural activities and exchanges between the two countries? When we do have visits similar to the one he has so ably led, could the base be just a little broader so as to involve all people in our country who contribute to the success of our nation and not merely the so-called leaders right at the top? That is a broad pyramid we can all be proud of.

§ Lord Young of Graffham
My Lords, I suspect that the best way in which we can encourage understanding between nations is to trade together. The purpose of my mission was to encourage trade in the interests of both our economies. I hope we shall succeed and, if we do, there will be plenty of room—as there already is—for cultural missions.

§ Lord Dean of Beswick
My Lords, it would appear from the list of names that the Minister has given, from the people who were on this delegation and the interests they represented, that there was nobody specifically representing the building industry from this country. Bearing in mind that in the developing countries some of our biggest success stories have happened by way of the building industry, may I ask the Minister why the building industry was excluded, or would he ever consider it at any time?

§ Lord Young of Graffham
My Lords, I was entertained yesterday by the export group of the British construction industry and they expressed great satisfaction with the mission and actually said they were happy, in these particular circumstances, not to be included. In deciding on those who were to come within the mission, the difficulty I had was in distinguishing between large numbers of firms when all were of interest. Within my mission I took many people who were interested directly in construction of power plant and transmission lines. I believe we have a considerable future in terms of management contracts and construction expertise, and I hope that we shall proceed as a result of my mission.

§ Lord Hatch of Lusby
My Lords, will the Minister confirm that at the time of his visit there was a Japanese mission similar to but 10 times larger than the British, and at a lower and more acceptable stage of industrial development than ours? Would he confirm that that mission was received at a higher level than ours and made a number of important contacts with that form of association which the Chinese are looking for—that is, joint ventures? Also, can the Minister say whether his mission looked into the possibility—which the Chinese are themselves looking for—of joint ventures with either state industry or private industry in China?

§ Lord Young of Graffham
My Lords, I am very grateful to the noble Lord, Lord Hatch, for asking this question, because I must confess to your Lordships that when I returned from my mission and read some of the cuttings from the British press I did not recognise the descriptions. I travelled out with my delegation which, I should remind your Lordships, was possibly the most high-powered trade delegation we have yet sent in an official capacity to a foreign power, with a letter to Premier Zhao Ziyang. The same day that I met the Premier there happened to be in Peking a delegation of 100 members of local chambers of commerce, bringing with them a letter to the chairman. That was, to my mind, more of a political visit, but, even if it was not, I should remind your Lordships that Japan does possibly 16 times as much trade with China as we do, because today we do perhaps 1 per cent. of China's trade, whereas Japan's trade with China, I believe, is something approaching 872 60 per cent. of the OECD average. I can assure your Lordships that we were received as well as anyone could be received on a similar trade mission. As well as meeting the Premier, we met the Vice-Premier, Li Peng, who is one of four Vice-Premiers responsible for the heavy goods side that I dealt with. In addition, we met no less than 10 Ministers, Vice-Ministers or their equivalents.
In terms of joint ventures, the Premier said to me during our meeting that the Japanese were unwilling to share their technology. I assured him that each and every member of my mission was prepared not only to share his technology but to take China in as a full partner. It was in that spirit that our mission proceeded. I do not believe that our hosts made any distinction between private and public sector companies. They were quite happy with the members of my mission, some of whom, as I pointed out to the Chinese Premier, had been in business in China 100 years ago and all of whom hoped to be in business in China in a hundred years' time.

§ Lord Avebury
My Lords, the Minister mentioned communications but not information technology generally. Is it correct that the Chinese are particularly interested in developing their own information technology industry and that we might make a significant contribution to this end? Was anything said during the course of the discussions about the COCOM rules? Is there a possibility that, for the Chinese at any rate, we should be able to vary those rules so as to liberate trade with China from unnecessary political restrictions?

§ Lord Young of Graffham
My Lords, one member of my mission was Sir Eric Sharp, the Chairman and Chief Executive of Cable and Wireless. While we were there, three memoranda were signed: one to establish as a joint venture a telecommunications technology development centre in Peking itself, with conference, office and hotel facilities; and, secondly, and more importantly, a memorandum of intent to establish a joint venture to develop a telecommunications system for the whole of the Yangtze delta region. That region has 110 million people living there—twice the size of the United Kingdom. This will involve capital expenditure of some 500 million dollars over the next five years.
The third joint project agreement was to provide modern telephone facilities in the Pearl River delta. These two deals were won in the face of intense international competition, and I think it is a matter of great pride to us, and of congratulations to Cable and Wireless, that they were in fact signed. So far as COCOM is concerned, we have partners and we are carrying forward discussions, and I am sure that whatever relaxation can properly be entered into will be.

Lord Bruce of Donington
My Lords, the noble Lord has been good enough to give two examples of agreements that were reached. We wonder whether, without in any way breaching commercial confidentiality, he could give us some idea of the nature and extent of other agreements which he mentioned in the course of his reply to an earlier 873 supplementary question and which have in fact been concluded. Also, can he give the House an assurance that the efforts made by all those concerned in this extremely important conference will be followed up with the maximum of resolution?

§ Lord Young of Graffham
Yes, my Lords. I think the details of all the memoranda that we signed were in fact published when we came back. But I am happy to be able to reassure your Lordships that conversations have carried on at a very encouraging rate since our return. Delegations are now arriving in the United Kingdom as a result, and, indeed, some of the members of our delegation already have teams back in China following through. I take it very much upon myself to ensure that a proper follow-up is maintained, and I hope that as the months pass—since by their nature the projects will reach their conclusion in a matter of many months, if not a year or so—we shall see the full fruits of our endeavours.