§ Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Heppell.]
9.30 am§ Mr. Ben Chapman (Wirral, South)I am delighted to have secured this debate. It is opportune that we should have it now, because only three months ago we celebrated the 30th anniversary of the establishment of diplomatic links with China at ambassadorial level, and in a few days' time we will have reached the fifth anniversary of the return of Hong Kong to China. I asked the Library when the House had last discussed our bilateral relations with China, but it was unable to find an example of such a debate. It is vital that we air the subject thoroughly.
The debate is opportune also because many hon. Members present today have just returned from a visit to China. For propriety, I should declare that our air fares were met with commercial assistance and that our transport and hospitality costs while in China were met by our interlocutors there, the National People's Congress, the provincial people's congresses and the municipal people's congresses. Many hon. Members who went on the visit were keen to be present for this debate, but some are committed to attending other Select Committee meetings and visits, or have similar engagements. For example, the hon. Member for Totnes (Mr. Steen) has asked me to express his apologies, as he is with his Select Committee in Warsaw.
The all-party group on China, which I chair, is one of the largest such groups. We think it important that as many Members of Parliament as possible, including Members of the House of Lords, take an interest in China and are able to speak about it with authority within the Palace of Westminster and outside it. It is important also, given the rate of change in China, that regular visits take place, not least because change is a constant there, and we need to be current. It is helpful to have the opportunity to bring the House up to date on matters as I and my colleagues found them.
In my mind's eye, I see a bilateral relationship as a pie chart. The pieces of the pie relate to commercial relations, civic relations, academic and educational relations, sporting relations, governmental relations and so on. The piece that relates to parliamentary relations is relatively thin, but it is important, especially for political and democratic development. My colleagues in the China group attach some importance to maintaining the size of the slice of pie and of the group itself—and, indeed, to developing both.
We regularly receive visitors from China. As recently as yesterday, I met the deputy chairman of the standing committee of the provincial people's congress of Guangdong; and a few weeks ago I and my colleagues met Li Ruihuan, the chairman of the Chinese People's political consultative conference. We have also tried to 2WH encourage parliamentarians to learn Mandarin and to facilitate that learning, and we have been instrumental in bringing a clerk from the National People's Congress for training and experience in the Palace of Westminster. However, like other groups, we are seriously limited by an absence of resources. Funding has been difficult, and may be complicated and restricted by the Political Parties, Elections and Referendums Act 2000, although we are now trying to tackle the problem.
Our debate is particularly important now, because although our bilateral relationship with China is in excellent shape, especially following the successful hand over of Hong Kong, it is still in need of widening and deepening. In a sense, it has been a truly bilateral relationship for five years only. Prior to that, for 150 years it was a trilateral relationship in some respects, and our dealings, especially in more recent historic terms, were conducted against the background of, and in relation to, Hong Kong. There is still much to be done, especially given our joint permanent membership of the Security Council. I may be over-ambitious, but I think that in the light of our historical and current relationship and our different spheres of influence there is unexploited scope for double-header initiatives with the People's Republic of China.
Given our history, remarkable progress has been made. We enjoy close collaboration on the governmental front, and that has been particularly so recently in relation to international coalition against terrorism. Government links are many and varied, and high-level exchanges are frequent, which is to be greatly welcomed. That was demonstrably true of the Deputy Prime Minister's recent visit to China, against the background of the crucial global challenges of the environment in general and the Kyoto agreement in particular. It was also true of Vice-President Hu Jintao's visit to the UK in October last year.
However, not everything in the garden is rosy. Just as the Chinese do not see all aspects of the UK as perfection, there are some aspects of China's affairs that we find imperfect. Human rights remain a serious concern, and the all-party group never fails to raise the issue on its visits to China and with Chinese visitors to the UK. We recognise, however, that the colossus that is China is on a continuum that will take it from economic reform through political reform to social and civil reform. Like much else in China, that process is probably inevitable, and the all-party group has a small role to play in encouraging China along the line of that continuum—however slowly—through constant dialogue.
It is readily acknowledged that the opening-up and reform of China have led to massive improvements in living standards and in the enjoyment of economic and social rights, but it is fair to say that they have not been matched by similar improvements in social and political rights. The continued detention and harassment of democracy activists and religious practitioners run contrary to international human rights norms, as do the excessive use of the death penalty, the continued use of detention without trial and some aspects of the situation in Tibet and Xingjiang. Religious beliefs, freedom of association and of expression and the media are routinely restricted. The crackdown on activists in the China Democracy party and the Falun Gong continues, 3WH and Falun Gong leaders have been handed harsh sentences. I and, I think, the Government have no particular view on the Falun Gong, but we are concerned about human rights abuses, wherever they occur.
That said, the human rights dialogue is continuing and. I think, progressing at national and European Union level. A round of bilateral exchanges concluded just before we went to Beijing. The Chinese have ratified the international covenant on economic, social and cultural rights, and have signed the covenant on civil and political rights, but not ratified it. We continue to express our hope that they will do so, and to make clear our concerns about the treatment of Tibet and Tibetans.
We applaud the work that the British Council and the Great Britain China Centre have done within that human rights dialogue on promoting the rule of law, on strengthening civil society and on many other issues. I recognise, however, that the maintenance of social stability will be the predominant requirement as the Chinese move forward, and that both social and economic development will inevitably have Chinese characteristics.
For many years, China has been regarded as potentially the largest market in the world. The realisation of that potential has been a long time coming, but the fact remains that economic developments have been remarkable for China's 1.25 billion people—they currently make up one fifth of the world's population, and the figure is growing. Since Deng Xiaoping adopted the open-door policy in 1978, the economy has grown by almost 10 per cent. per annum. Shanghai is a new "Metropolis", and it is said that three quarters of the world's construction cranes can be found there. That is certainly apocryphal, but impressionistically it could be true. I did not count them, but there appeared to be hundreds, if not thousands, of high-rise blocks. Futuristic buildings of high quality and architectural design stand starkly and modernistically alongside the traditional architecture of the Bund. To walk down Nanjing road and see its commercial activity and feel its buzz is an energising experience. Shanghai had a gross domestic product of $60 billion in 2001, and its foreign trade expands by 20 per cent. a year. Many major projects are under way, such as the deep-water port at Yangshan island, which I think will carry as much traffic as the port of Hong Kong.
It is true, however, that in Shanghai and elsewhere too many Chinese still harbour an old-fashioned view of the United Kingdom. Believe it or not, London is still thought of as foggy. That Dickensian view is held partly I suppose because of the Chinese liking for British classics. It is thus opportune that another effort is being made to dispel that image, and to promote an innovative and technologically advanced Britain through the Leading Edge events in Shanghai in October.
Some years ago when I served in the British embassy in Beijing, I was shown plans of a new futuristic area of the city—virtually a city in itself—called Pudong, which was to have its own financial centre, international airport, high-tech zone, industrial areas and so on. I was dubious about its achievability, but it has now been built and is massively impressive. I no longer harbour any doubt about China's ability or commitment to 4WH developing the western regions. Indeed, I recognise that as another inevitability, and we saw a little of it when we visited Xi'an.
In that context, it is appropriate that the policies of and assistance from the Department for International Development should focus in China on poverty alleviation, mainly in the western provinces where the majority of the poor are located. However, the western provinces are also important commercially. Development in that region will provide massive opportunities for exporters and investors. We need to facilitate such development for UK exporters and investors.
It is commendable that in recent years our exports to China have grown massively, no doubt assisted by the China-Britain Business Council and its predecessors. In the 1990s, our exports quadrupled. It is quite coincidental that my period as commercial councillor in Beijing promoting our trade there ended in the 1980s, when our exports were sadly rather flat. After my time, they took off dramatically. If we include direct exports alongside exports via Hong Kong. the figure for 2001 was £2.4 billion.
That said, the direct visible trade deficit grew from £32 million when I was there to £4.25 billion by 2001. In other words, Chinese exports to the UK have massively outstripped our exports to China. There is obviously some ground to be made up, as there is in relation to our European competitors. For example, Germany's direct trade exports were two and half times those of the UK a couple of years ago, and French exports were 50 per cent. higher.
UK capabilities in telecommunications, technology for the supply of liquefied natural gas, transportation, chemical production, power generation, agriculture and food processing, among other things. mix well with Chinese priorities. One wonders whether, for many, China is still too far, too big and too difficult. We need to develop measured ways to attract, in particular, small and medium-sized enterprises to the market, and perhaps more closely consider piggy-backing their export efforts on to those of larger firms, not least those that deal with oil and related activities and have massive investments in China.
China's entry to the World Trade Organisation will also provide opportunities for UK firms, which colleagues from the Select Committee on Trade and Industry are examining as I speak. One understands China's reluctance to expose a fledgling financial services sector to severe competition too early, but we need to press for services such as banking, insurance and fund management, among other areas in which we have particular expertise, if we are to have a better share of and better opportunities in the Chinese market. Our relationship on the environmental front may also allow us to promote our expertise in environmental and pollution control equipment and environmental consultancy. By the same token, the market in consumer goods, health care, education and training will open up much further, not least in the western provinces.
It is also inevitable that, as with the Asian tigers, China will need to invest overseas, as it is already doing to a certain extent. In purchasing power parity terms, it is already the world's second-largest economy. It will, as night follows day and for a variety of sound economic 5WH reasons, need to move its investment overseas as well as inland. Inward investment is a long process, and it is right that Invest UK is targeting the market.
Although our cumulative figures make the UK the sixth largest investor in China and the leading EU investor, much of that is represented by industrial giants. Without wishing to encourage the export of jobs, we still need to encourage British companies to consider making their own investment in China as a basis for tackling the market in the region. The upcoming Beijing Olympic games of 2008 will provide significant commercial opportunities, and we welcome the attention that Trade Partners UK is paying to that. The Beijing municipality is investing $24 billion in urban infrastructure and facilities for the games.
We did not visit Hong Kong, so I shall restrict my remarks on that region, but we intend to visit it later this year. Suffice it to say that the Chinese seem to me and, I think, to the group to have honoured the terms of the joint declaration to the letter. The Special Administrative Region arrangements are working, as far as one can see, absolutely as intended. As a result, the interactions between China and Hong Kong are now on an even more massive scale than before.
The economy of Hong Kong has seen difficult times, as have other economies of that region and elsewhere, but it is weathering the storm and showing its perpetually remarkable ability to adapt. It remains, of course, an important market for the United Kingdom, and Britain remains its leading foreign investor.
The system of governance of Hong Kong is changing, and progress is being made towards universal suffrage. The Chief Executive has announced his intention to introduce "Ministers" from outside the civil service, who will be politically appointed and answerable to him for the duration of his political tenure. Although those Ministers will take full political responsibility for the success or failure of their policies, personally speaking, I wonder whether that measure is sufficiently radical or forward-looking to achieve what are regarded as normal forms of governance or the process towards democratisation, which is designed to benefit the people of Hong Kong, for whom we have an enduring moral and political responsibility because of our residual responsibilities. I also wonder whether the Chief Executive's measure is forward-looking enough for the economy of Hong Kong.
It is striking that there are now 20,000 Chinese students in the United Kingdom. It is equally striking that most of them are privately funded and that the Chevening scholarship programme for China is the largest in the world.
I have ranged generally, sometimes superficially, over several issues, but our bilateral relations are necessarily wide and diverse. They include, for example, important non-governmental connections through the UK-China Forum, which will meet in Beijing next year.
China is vastly important as a global player and in relation to the United Kingdom. The nation seems to recognise increasingly an external role, as it did with its leadership during the Asian economic crisis and as it has done in relation to the current India-Pakistan dispute. It showed such leadership by hosting the APEC summit for the first time last year, by establishing a peacekeeping affairs office and by indicating its 6WH willingness to play a part in UN peacekeeping operations. It will do so at a different level as more and more students and tourists travel overseas. Large numbers are already doing so.
China is a colossus of geo-political importance. It is a colossus in its commercial, economic and industrial development, and in its ability to affect the world for good or ill, be it in relation to the environment or to world stability. It is also a colossus by virtue of its scale—31 provinces or autonomous regions, each the size of a European country. It is twice the size of western Europe and stretches from the tropics to the sub-Arctic. Although there are difficult economic and political changes ahead, because of the scale and complexity of matters Chinese, China provides us with opportunities on a wide front. With major changes in the Chinese hierarchy due in autumn this year and spring next year, I hope very much that we can utilise our bilateral relations to good effect in terms of the people of both nations and global well-being.
§ Tony Baldry (Banbury)Madam Deputy Speaker, I apologise to you and to the Minister for the fact that I shall not be able to stay for the whole debate, but I am chairing a meeting of the International Development Select Committee.
The hon. Member for Wirral, South (Mr. Chapman), the excellent chairman of the all-party group on China, is to be congratulated on securing this debate. If the millennium development goals for 2015 are to be met, it will be largely because of the Herculean efforts that have been made by China to lift her people out of poverty. The past five years have probably been the most momentous for relations between China and the UK.
As the hon. Member for Wirral, South said, the hand over of Hong Kong, about five years ago, was much more successful than most people had expected. The following year, the Chinese Prime Minister visited the UK, and our Prime Minister visited China. In 1999, there was the extremely successful state visit of the President of China, the first such state visit ever. Those visits have been followed by others, such as that of the Vice-President last year, and the chairman of the People's consultative committee this year. Against that background, there has also been a substantial increase in bilateral trade. The Chinese ambassador said only yesterday that there were only about 8,000 Chinese students studying in the UK when he visited this country five years ago, whereas there are now about 40,000. Our relations with China have been strengthened considerably during that period.
As one of the vice-chairs of the all-party group on China, I want to reinforce something that the hon. Member for Wirral, South said on a parliamentary housekeeping point. The British-American parliamentary group receives public funding, and other groups in the House can secure overseas visits either through the Inter-Parliamentary Union or, for Commonwealth countries, through the Commonwealth Parliamentary Association. We are often very fortunate in being welcomed by other countries, as happened recently when the National People's Congress entertained Members of the House of Commons. I did not go on that visit, but I have recently been to China on 7WH my own account. However, the lack of budgetary assistance makes it difficult for us to invite representatives of other countries here. If relations between Parliaments are to be thickened, a two-way dialogue is required.
Some people in the private sector are willing to support the work of the all-party group on China, which they regard as important. An unintended consequence of the legislation on donations to political parties has been to muck that up. If a public company in the UK wishes to give money to the all-party group on China for the purpose of exchanges between parliamentarians, it has to obtain the approval of its shareholders at an annual general meeting. Companies are not unwilling to do that, nor have they anything to hide, but it is an additional imposition. The hon. Member for Wirral, South and I can talk to the chairman of the Electoral Commission, Sam Younger, about the matter, but I suspect that he is constrained by the law.
We need to consider whether the House could set up a trust fund or other mechanism to facilitate parliamentary exchanges without public companies having to go through the brouhaha of resolutions at their annual general meetings to enable them to give modest sums. Otherwise, it will be difficult to develop and thicken the relations that are necessary between this Parliament and the National People's Congress in China, which I am sure we all want to do. China is a large and increasingly important country. It is in all our interests to get to know how Chinese parliamentarians think and how they view issues.
§ The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Denis MacShane)I thank the hon. Gentleman for giving way, as it is unusual to give way to the Minister. Parliament voted recently to allow all hon. Members to make three visits to European countries, not on matters to do with the Government. Speaking as a Member of Parliament and not as a Minister, I would have no problem with a resolution to allow one trip a year further abroad to enable hon. Members to make longer range visits, which are, I agree, so important.
§ Tony BaldryThat is a constructive comment, and I endorse it. It is difficult for us to invite parliamentarians to Westminster as our guests to discuss matters such as those mentioned by the hon. Member for Wirral, South in relation to human rights. That cannot be done in headlines; it requires a degree of subtlety and should progress over a period of time when we have established some trust and got to know people. It is important to keep dialogue going in both directions.
Bilateral trade with China has doubled over recent years. However, there is still enormous potential for small and medium-sized businesses. The China-Britain Business Council does brilliant work, and is much to be congratulated. So, too, do many British trade partners. The export of the year award was made at the lunch to celebrate the Chinese new year, and I was struck by the fact that it has often been a matter of chance that the winner has been established in China. I suspect that much more needs to be done to give small and medium-sized businesses the confidence to get to grips with the 8WH Chinese market. Those that do, and persevere, find openings for specialist niche companies, but they need help.
With regard to culture and language, China is an increasingly important player on the world stage, but practically no schools in the UK offer Mandarin as a subject. It is not an impossible subject; my daughter has just completed a GCSE in Mandarin and hopes to go to China for her gap year to teach English. So it is possible, although she was fortunate in being at a school that offered Mandarin. For her and others who study the language, it is essential to understand that a culture can have completely different values, but that it is none the less important for that. Having some understanding of those cultural values is extremely important for people in our schools if they are not to see China in terms of historic stereotypes. We should consider how we in the UK can ensure that we have a better understanding of Chinese culture, history and language, provide greater opportunities for youngsters in our schools and enable those who may like to do so to study Mandarin.
Those were my three brief points. The first concerned how we can improve relations between the UK Parliament and the National People's Congress; the second, how we can help small and medium-sized businesses to take greater advantage of the ever-growing Chinese market; and the third what we can do to ensure a better understanding in our schools of Chinese culture and greater opportunities for children to learn Mandarin.
§ Mr. Peter Kilfoyle (Liverpool, Walton)I should like to follow on from the comments made by the hon. Member for Banbury (Tony Baldry) and my hon. Friend the Member for Wirral, South (Mr. Chapman). I, too, was a member of the all-party group that went to China, which was an enormously impressive experience.
I shall respond to the comments made by the hon. Member for Banbury about the cultural side of the visit. Although much of the business and the constant string of meetings that we conducted in China could be tiresome, to put it mildly, the highlight of our trip came when we visited the Great Wall of China. It took more than 2,000 years for the fabled wall to be built, which gave me a marvellous reference point for continuity within the Chinese polity and allowed me an insight into Chinese culture, which regards outsiders as "the other". The Chinese name for China is Zhongguo, which translates as "the middle kingdom" and suggests that the outer world continues to be regarded as something other.
During our trip, I perceived the Chinese Government as trying to break down those barriers and making conscious efforts to look outwards. There is no greater example of that than China's recent accession to the World Trade Organisation. Mr. Tong, the remarkable and erudite man who took China into that organisation, was our host for a large part of our visit. Not only did his erudition come across clearly, but it was obvious from his humour and use of demotic language that he was an internationalist in the true sense of the word. I do not suggest that he reflects the reality of the Chinese masses, however.
Let us consider what the Chinese have to deal with. Some 400 million Chinese live in great cities such as Beijing, Shanghai and Xi'an. That is challenging 9WH enough, but in addition 900 million peasants live in the countryside, in a very different world from those in the cities. The Chinese Government have to take that into account.
Like my hon. Friend, I was struck by the great strides being made internally on the economy and infrastructure. I smile to think of the M25 and all the problems associated with it, such as yesterday's breakdown, given that the Chinese have just built a fifth ring road around Beijing, which runs freely and puts the M25 to shame. When we took a 14-hour train ride from Beijing to Xi'an, I realised that it would be a good idea for such companies as Railtrack and Virgin to go and see how to run trains that arrive on time, are clean and provide excellent food. There is much to be learned from China.
I want to deal with the provisions in the United Kingdom for the Chinese language and for an understanding of Chinese culture and education. My hon. Friend referred to the stereotypical view of London as foggy. In fact, on a dank day in mid-winter, one can still be misled into thinking that that stereotype is true. However, we have our own stereotypical views of China and the Chinese. Their major cities are no different from major cities anywhere in the world: the young people wear the same style of clothes, have the same fashions, go to the same McDonalds hamburger joints and eat at Kentucky Fried Chicken. There is a great international cultural affinity at that level, although I make the distinction between the cities and the countryside.
There remains an ignorance of cultures on both sides, as the hon. Member for Banbury said. I was interested to hear that one of his daughters has been studying Mandarin, because one of my daughters is head of a language specialist school in Liverpool, which teaches Mandarin and is twinned with a school in Shanghai. Indeed, my old school in Liverpool—St. Edward's—is also a language specialist school. It teaches Mandarin and has a twinning arrangement with a school in Shanghai. Other schools in Liverpool have such an arrangement, which is not surprising as Liverpool is home to the oldest Chinese community in Europe. It dates back 300 years, and we have long-standing links with China.
I want such links to be reinforced. I want to ensure that we do whatever we can in the House and through the Government to provide additional support when that is appropriate. I note the tremendous work of the British Council in facilitating twinning arrangements and exchanges between schools. However, we have a long way to go to address the ignorance in this country and to service further exchanges between the many schools in China that are crying out for such arrangements. I hope that what happened in Japan post the Tokyo Olympic games and the Sapporo winter Olympic games, and what happened in South Korea post the Seoul Olympic games, will have a progressive effect post the Beijing games.
The Chinese Government and the Beijing municipality have gone out of their way to make sure that the games will be a great success. I have no doubt that, given the unity of purpose and the application of the Chinese people, they will be a tremendous success. There will be an influx of overseas visitors, the likes of which the Chinese have never had to contend with. The 10WH games will be a beneficial occurrence. I am positive about it. It will have a similar effect on how the Chinese view other people. That will happen post-Beijing, as it happened post-Seoul, and to a large measure post-Tokyo. The games are important to the Chinese people and to their Government. I trust that we will play our part in making sure that they are a great success.
It is easy to have a mutual admiration society, but we cannot overlook the differences between us and the Chinese Government, especially on human rights. Mr. Tong pointed out to me that Guangdong province has a population of 135 million people. That is a sizeable province. Xi'an province, for example, has between 38 million to 39 million. That is a huge number of people, and we must remember that there are tensions within China as certain provinces and municipalities move on at a rate of knots. Its extremely entrenched and conservative countryside has the infrastructure to move on. However, that lends itself to strains and to an arbitrary way in which to deal with such matters.
To return to what I said about the Great Wall, there is a tremendous fear among the Chinese that if there is not an enemy from without, atomisation is always lurking round the corner from within. We should be aware of that when considering human rights in a Chinese context. The Chinese Government have strong views on missile defence, which reflect their long culture of feeling in peril from without. Her Majesty's Government have a different view. I speak only for myself, because I take issue with the Government on missile defence. We must recognise that in our dealings with the Chinese Government and people, who are on the edge in their development. Factors that incur mistrust are not helpful to anyone, and there is mistrust on both sides, on issues such as human rights on the one hand and missile defence on the other.
We have tremendous potential for trade, educational and scientific relations with China. Mr. Deputy Speaker, you are from the part of the country from which I hail. Imagine a city stretching from Chester to Preston, and from the west of Merseyside to the east of Manchester, with 16 million people in it. That will give you some idea of the scale of what is happening in China. We would not feel uncomfortable in such a city; we would feel quite at home, as it would have many of the things that we aspire to for a civilised life.
To put it crudely, we should be getting a bit of the action. We have excellent civil servants in China who are doing an excellent job. The Leading Edge event is coming up in Shanghai in October, and is all about promoting British trade in the Shanghai autonomous area. It behoves British companies to take up those opportunities, to get out there and to sell themselves as those in other countries are doing.
§ Mr. Deputy Speaker (Sir Nicholas Winterton)Order. Three hon. Gentlemen wish to participate in the debate before the winding-up speeches. If they restrict themselves to, say, six minutes, we will get them all in.
§ Mr. Nigel Evans (Ribble Valley)Thank you, Mr. Deputy Speaker. I shall restrict myself to six minutes. I am grateful to the hon. Member for Wirral, South (Mr. Chapman) for initiating the debate.
11WH Like many other hon. Members present, I too have visited China as a guest of the Chinese Government. The hon. Member for Liverpool, Walton (Mr. Kilfoyle) spoke about the different culture in China, which was referred to as a colossus by the hon. Member for Wirral, South. It is all those things. It is amazing to compare Beijing now with how it was the first time I went there eight or nine years ago. Downtown, one could still see carts being pulled by oxen with peat-like fuel on the back. Two years later, I did not see that in Beijing, and one now has to go further out into the countryside to see it.
The hon. Member for Liverpool, Walton is right to point out that China has a huge industry, and that amazing infrastructure projects are taking place in Beijing, Shanghai and other places. However, there is huge poverty outside those major urban areas, and that is a problem that the Chinese Government will want to address.
As has been said, it would be wrong for us to debate China and not mention human rights, and to think that by not mentioning the subject we were doing the Chinese a favour. The fact is that we do them a favour every time that we mention it. It is in the spirit of friendship that we raise those issues. This and previous Governments have promoted dialogue with the Chinese Government, and they continue to do so. The hon. Member for Wirral, South mentioned several delegations that have visited from China, and those from this country that have gone to China. The friendship that exists because of those visits is vital.
China is a colossus; it is a huge market. I get a bit depressed when I read the trade figures. The trade deficit in 1988 was £32 million, and now it is more than £4 billion. I agree with the hon. Member for Liverpool, Walton that we want a slice of the action. It is important that we start to focus more on that market. If the Germans and the French are doing that—I believe that we have overtaken the Italians now—then we, too, should do so. We must also focus on what we can do to improve our trade relations with China. As prosperity grows within China, it will buy goods from abroad, just as happened in this country. That is important.
As for tourism, I have been fascinated by places such as Chong Ching, which I had not even heard of before I visited it in September. It has a population of 32 million. That is amazing. I have visited other cities in China with large populations. We need to understand better the country's culture, rather than dictating to it, and learn about Chinese history. As has already been said, we should have more Mandarin lessons in our schools and universities. More people need to learn Mandarin, which will help trade in future.
It is amazing what China has to offer. Huge and growing numbers of people visit China to see, for example, the Great Wall, the terracotta army in Xi'an and the forbidden city, which is superb and unparalleled anywhere in the world. I hope that that will lead to more Chinese people visiting this country, which must be encouraged.
Education has been mentioned time and again, and it is vital. At the university of Central Lancashire, which is in my constituency, more than 500 students are Chinese. 12WH China is its largest overseas market. The university is focusing on that and wants the numbers to increase, and I congratulate it on that. On 12 July, the Chinese ambassador, His Excellency Mr. Ma, will receive an honorary degree from the university, and I hope to be present to congratulate him on the recognition of his enormous work. He has been a great friend of the all-party parliamentary group on China.
I, too, congratulate the British Council on its work on English language learning and its investment in distance learning, which will have a huge market in the future. I also congratulate organisations such as the 48 group club, which is trying to improve trading relations between China and the United Kingdom. I have attended its annual Chinese new year luncheons, at which prominent people of all political persuasions have spoken.
No differences between the parties are involved. We want relations to continue to improve. We had a successful visit from the President of China, and the Vice-President came to London last year. That was superb, and we want to encourage such visits in future. I hope that we shall hear some suggestions from the Minister about how we can re-focus our attention and ensure that Britain has more than its fair share of the action in that amazing colossus of a country.
§ Mr. Roger Godsiff (Birmingham, Sparkbrook and Small Heath)I associate myself with the comments of my hon. Friends the Members for Wirral, South (Mr. Chapman) and for Liverpool, Walton (Mr. Kilfoyle). I was privileged to have the opportunity to be part of the delegation that recently visited China. It was hugely eye opening.
I have been very much involved in south-east Asia through my chairmanship of the all-party parliamentary group on Japan. Being in Shanghai and looking out over the city at night, I could not help but feel that Shanghai now will be the Tokyo of tomorrow. I have no doubt about that.
I entirely agree with my hon. Friend the Member for Liverpool, Walton that China is a massively key player in the world. It has an important role to play in exercising sanity in a volatile area of the world. I pay tribute to its recent work in trying to persuade India and Pakistan that conflict is not the way to resolve the problem of Kashmir, and that they must have dialogue on such issues. I envisage China playing that role much more in that part of the world, because it is undoubtedly a very stable country, even if we do not agree with the system that governs it.
I was also impressed with the concept of the socialist market economy that the Chinese say has developed—every time I look at my £2 Rolex watch, I think that there must be some merit in that new concept. China has a massive internal market of 1.2 billion people, which will grow to 1.5 billion. It has a hugely impressive growth rate of 7 or 8 per cent.
Travelling through the country, albeit only a part of it, was an exciting and interesting experience. The Chinese are adamant that their priority, above all else, is the unity of the country. Although all of us on the delegation voiced our concerns about human rights issues and about the political process itself, one can 13WH understand why unity is a priority. We must remember that, only 60 years ago, China was a continent at war with itself. It was ridden with civil war. Warlords were running riot and part of China was occupied by Japanese forces. Sixty years later, it is hardly surprising that unity is the first priority of the country and the ruling elite.
I had never been to China before, but looking out at Shanghai and seeing how that city has grown is breathtaking. As my hon. Friend the Member for Liverpool, Walton said, a by-product of the political system in China is that a city such as Shanghai can develop quickly without worrying about planning applications that might involve five years of arguments—although I do not offer that as justification. The Chinese tend to decide and then do it. It might not be democratic, but it ensures speedy decisions.
I will not take up any more of the House's time. It was a great privilege to have the opportunity to take part in the delegation that visited China. I thank my colleagues on the delegation for their comradeship and enjoyable company. Above all, I thank the Chinese people for their hospitality and for the opportunity to see a country that, in the normal run of events, I would probably never have seen. What I saw leads me to believe that China will increasingly be a powerhouse in the future. In the same way that we see the balance in world sport moving east—not least in football—the balance of economic power in the world will also move east.
§ Ian Stewart (Eccles)I was also part of the recent delegation to China referred to by the chairman of the all-party group, my hon. Friend the Member for Wirral, South (Mr. Chapman). As one of the vice-chairs, it normally falls to me to deal with human rights issues whenever we meet delegations from China. I do not want to say any more about that this morning other than that I associate myself with the chairman's comments. In a sense, the way in which we deal with concerns on human rights and other issues with our friends in China is a measure of the relationship between our two countries and peoples. I am an active member of the all-party Tibet group, and that is well known to our friends in China. Relationships are important, and we must understand that, in a true partnership or a marriage, whenever the partners fall out, they are not automatically divorced, otherwise there would be a great many divorces throughout the world. We must be able to put opposing views to each other, and realise that the wider interests of our two peoples are served by continuing dialogue.
I shall comment further on the historical perspective of the development of China as a very large country throughout history, to which my hon. Friend the Member for Birmingham, Sparkbrook and Small Heath (Mr. Godsiff) alluded. He said that there have been many periods of trouble in China. Our nation must have the maturity—as must other nations, including France, Germany and America—to acknowledge that our actions in China during our imperialist and colonial period greatly angered the Chinese people over hundreds of years. That is quite understandable.
Those of us who have been lucky enough to visit China on delegations know that the Chinese people have matured a great deal during a short time in a 14WH modern technological world. They have moved from a command economy to what they call a socialist market economy—I must admit that I am attracted by that concept—with a full understanding of the difficulties that that creates. They must deal with unemployment for the first time without an established social welfare safety net. They are astute enough to realise that they should look to countries such as Britain, America and other European countries. We have made our mistakes in those areas, and perhaps the Chinese people can learn from that, and from our good practice.
That is not a one-way exercise, because we can learn from China. Hon. Members have mentioned that China must address large environmental issues owing to its great economic growth during a short time. China is examining technologies and methodologies to ensure that its people gain the benefit of economic growth while dealing with the enormous ecological problems that such growth creates. China is investigating technologies that, to be frank, companies in Great Britain have sufficient finance to try. China is trying new technologies that we are not trying, although we would like to, and we can learn from its experience.
My hon. Friend the chairman of the all-party group alluded to the fact that China's economic and political maturity has been demonstrated. When the south-east Asian financial crisis hit the world—it was a world event—the Chinese Government showed real maturity by refusing to devalue the renminbi. That might not have happened in an earlier period; China might have thought that a short-term quick fix could earn it quite a bit. However, it played a mature and sincere role in that crisis. It has also played an excellent role in world peace through the United Nations Security Council, as well as unilaterally and bilaterally.
The future is bright, if only because China is talking to the world, and the world is talking to China and recognising that it is a major player in the world, and that it will increasingly be so. We should create a genuine partnership, which should include investment and social and political relations. I am optimistic about the future, although I am not uncritical.
§ Brian Cotter (Weston-super-Mare)I congratulate the hon. Member for Wirral, South (Mr. Chapman) on securing the debate, and I associate myself with his and other hon. Members' comments about the recent trip and the declaration of interest.
I shall concentrate mainly but not exclusively on the economy. China is a large country and has many facets, but we must use this occasion to look at the reality, which represents a challenge, but an opportunity. I have been told that the Chinese word for challenge also means opportunity; that draws attention to the Chinese character—and, I hope, the British character. I want us to see that China represents a great chance for us.
The hon. Member for Eccles (Ian Stewart) referred to maturity. I endorse what he has said about the Chinese economy: it is not a mature market economy, such as ours. However, the Chinese displayed great maturity by resisting calls for devaluation during the recent Asian crisis, and subsequent utterances from the Chinese Government suggest that they will continue to take that approach.
15WH We are talking about reality, and I was impressed by the way in which the Chinese Government are addressing their massive problems in respect of restructuring the job market and meeting new challenges. As has been said, Liberal Democrat Members stand back in amazement at developments in Shanghai, and at economic developments and the way in which they are being tackled.
The Chinese appear to be quick learners—and I hope that we will be too, because there is much that we can learn from China. The Chinese are setting up an economy by quickly learning things that have been done in our country and other countries. I offer one example of that: the remarkable scale of the stock exchange in Shanghai. One cannot fail to be impressed by the fact that after only 11 years the Chinese have established such a highly sophisticated operation, which can process transactions swiftly: more than 80,000 transactions per second can be handled at that single stock exchange.
The way in which the Chinese have dealt with the modernity of their computer systems so that they can deal with future needs is also impressive, as is their approach to regulation. When asked about what they will do to address future problems, they said that meetings are held almost daily to discuss what problems might arise and to find ways to solve them. Perhaps that is something that we can learn. In trading, their nationwide satellite communication network is also impressive. They are laying down lots of realistic foundations for the future.
Since its accession to the World Trade Organisation, China has had to meet change ever more quickly. That will give us and other countries greater opportunities for trade, because China's economy is likely to expand considerably. I hope that those few words on the economy will act as a backdrop to the most important element, which is that we should play our part in China's economic progress. Furthermore, a significant presence in China will mean a significant presence in the rest of Asia.
Bilaterally, China and the UK have had their problems. On the Chinese side, the blowing up of the Chinese embassy in Kosovo did not help relations; and more recently the US spy plane crash could have led to a return of the cold war. Another concern, as the hon. Member for Liverpool, Walton (Mr. Kilfoyle) suggested, is the United States' ballistic missile defence system, which is apparently supported by our Government. My party is strongly concerned about that development and the worries that it has caused, in particular to China.
On the other hand, we are right to raise issues such as Tibet, which remains a live and worrying problem. It is also right to refer to dissent in China. We believe that countries that are confident of their status, like China, should not feel the need to suppress dissent, but should welcome it instead. However, just as we are able to make such points about China, so the Chinese are entitled to make points about us. On the positive side, we are remarkably encouraged by the way in which the Chinese Government have come alongside us in trying to deal with terrorism throughout the world since 11 September. Those events acted as a catalyst to bring the two nations together.
16WH We have a bilateral role to play in China because 30 years ago we became the first western country to give the country ambassadorial status. That has stood us in good stead, and in recent years it allowed us to settle the question of Hong Kong. Like many hon. Members, I feel respect and amazement when I see how China's Government have instituted the one country, two systems approach that they promised. Taiwan poses a similar problem, and I tentatively suggest that a similar one country, two systems approach could be used there—but that remains to be seen, and greater brains than mine will agree or disagree on that.
I spoke originally about the great importance of our economic relationship with China. Recent moves to create a free trade area involving China and the Association of South-East Asian Nations mean that our market will not be restricted to China, but will potentially be very much larger. Our bilateral relations will also cover those relationships increasingly being created within the wider trade area of the European Union community.
The UK is China's second largest trading partner and its biggest investor among EU countries. With China's GDP ranked sixth internationally, it has great potential, but we need to work harder to achieve our aim of increasing trade, particularly with regard to small businesses. As I have mentioned, of the EU member states, we are one of the top traders with China, but that position is not secure. We need to widen our trading base and make it more varied and diverse. I hope that the Government will continue to identify areas of current and future growth in China and focus on those areas where we lag behind.
I can speak for many when I say that we value our friendly relations with China, which are epitomised in many ways through Government, trade and other contacts. Reference was made to the many Chinese students in this country. The hon. Member for Liverpool, Walton mentioned twinning of schools, and the hon. Member for Banbury (Tony Baldry), who is no longer here, also talked about education. In my constituency, we have recently twinned four schools with schools in Beijing, and a programme is being fostered by the British Council to further such twinning. We want to engage people at an early age with a country a long way away.
The Chinese people are hard working, vibrant, enthusiastic, imaginative and innovative, and they have a long history and rich cultural background. Above all, like us, they are anxious to increase friendly relations between our two countries, and not only at Government level. As we saw when we went to China recently, the people are extremely friendly and welcoming. I thank them for their great hospitality.
§ Mr. Richard Spring (West Suffolk)I congratulate you on your knighthood, Mr. Deputy Speaker, which reflects your considerable contribution to our parliamentary life. I also want to express to the hon. Member for Wirral, South (Mr. Chapman) the gratitude of everyone who has spoken. He has great knowledge of the subject and is a distinguished chairman of the all-party group on China.
Napoleon once described China as a slumbering giant. The same could be said today, except that the giant has begun to stir. We ignore China at our peril 17WH because of its economic, political and cultural importance. Chinese civilisation and culture have made an enormously important contribution to the world. As the hon. Member for Liverpool, Walton (Mr. Kilfoyle) said, we have long had a Chinese community in our country. That community has been greatly enlarged, and I pay tribute to its entrepreneurial energies and commitment to family support and excellence in education—wholly admirable characteristics that are an example to us all.
The emergence of China as a major economic and political power and in other ways will bring about internal changes in the country. We can already see change taking place. That has an impact on our bilateral relationship. The successful handover of Hong Kong was in no small way the catalyst for improved and ever-improving relations between our two countries. The way in which China has since handled Hong Kong has been immensely to its credit.
We agree with the first conclusion of the 10th report of the 1999–2000 Session by the Select Committee on Foreign Affairs, and with the Foreign Office view expressed in it, which was that we should view as a priority the closer integration of China in the international system
in all fields, as a friendly and responsible partner in dealing with global and regional issues".The enhancement of British-Chinese relations over the past few years is extremely encouraging. Hon. Members have talked about visits by various politicians: only last year, my right hon. Friend the Leader of the Opposition had a lengthy meeting with Vice-President Hu Jintao in London, at which he affirmed the Conservative party's commitment to further its long-standing relations with China—an objective that the Government share. Our close relationship with the United States, which is appreciated and understood by China, affords us a special role in helping to act as a bridge between the two countries.Internally, modernisation in China continues. The way in which the Chinese authorities reacted to the Asian meltdown was a source of great stability in the far east and for world economic conditions. As the economy changes in China, we see civil unrest, and we note the tough action by the Chinese Government against pro-democracy dissidents, especially Falun Gong adherents. No doubt they are seen as something of a challenge to the monopoly of power held in China.
We have heard about the large gap between the rich and poor in China, which appears to be widening, and about regional differences. That is a great challenge to China. How it addresses the needs of its people and adapts to the modern world, raising the living standard of all its people, will be one of the yardsticks by which its success in the 21st century is measured.
There is no doubt that recent economic growth in China has been absolutely unparalleled. Further economic liberalisation, utilising communications advances and the internet age, combined with China's access to immense human resources and the political will to make it work, should make such growth sustainable. Before the Asian meltdown, China used to attract about 30 per cent. of inward investment into the far east; that figure is now 70 per cent. That is one of the reasons why China is likely within eight or nine years to 18WH become the world's fourth largest economy. China's accession to the World Trade Organisation represents an important step in establishing future channels for trade and prosperity for both nations. As the WTO director general Mike Moore said,
With China's membership, the WTO will take a major step towards becoming a truly world organisation.Economics is just one aspect of China's complex place in the world amidst the challenges of the 21st century. Since 11 September, we have seen new-found fluidity and changing relationships bring China into the fold of key world players. That is extremely important. We value China's support for the war on terror and its willingness to work with the west in that respect. We must all work together to face such challenges, and as China continues to emerge as an economic power, its political importance will grow.We do not want to over-simplify the problem of the status of Tibet. We urge our friends in China to respect Tibetan culture and identity. China must recognise the rights of the Tibetan people to live in peace and security and to live their lives free from unwarranted pressure and discrimination. It would be inappropriate, as this is a matter for a longer discussion, to get into the issue of Taiwan, but it has an impact on US-China and UK-China relations in that Chinese sensitivities on Taiwan have to be recognised. All we can hope is that the two entities will work together to resolve the matter. As a third party, we should be wary of coming between the two principal players, but we should also look for ways to facilitate dialogue.
It is important to note that there are signs of US-China relations and UK-China relations improving. President Bush's visit to China in February 2002 was important, as was that of Chinese Vice-President Hu Jintao to Washington. The normalisation of relationships between those two countries, in which we can play our part, is very important.
Also, as has been noted before, China's relationship with Pakistan and its more fledgling relationship with India have been helpful in cooling passions over Kashmir during the past few weeks. We have also touched on the vexed question of human rights violations. Some progress has been made there, but, as my hon. Friend the Member for Ribble Valley (Mr. Evans) said, we would not be good friends of China if we did not point out that that was an area of concern in the UK and in other parts of the world. On a more positive note, we very much welcome the fact that the Beijing Olympic games will take place in 2008 and will undoubtedly be a great success.
In its long history, China has suffered from wars and invasions by foreign powers. It is at last effectively united and confident, and it will undoubtedly be a major global power in the 21st century. There is a lively debate in China about how to marry economic liberalisation with a monolithic political structure. The 16th party congress in September is an important event and we hope that it will be a considerable success. Ultimately, however, no country can operate a free enterprise system without political plurality. That is China's greatest challenge as it emerges as more economically successful on the world stage. We shall watch developments there, confident that overall the forces of reform and modernisation will prevail.
§ The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Denis MacShane)Sir Nicholas, Mr. Deputy Speaker, what a pleasure it is to address you by your new title and to be a member of a Government under whom you have been properly rewarded and honoured for your long service to Parliament. This has been a remarkably good debate and I ask our friends in the Chinese Government, in Chinese business and Chinese non-governmental organisations and human rights organisations to read hon. Members' words in Hansard. They spoke not just for themselves and Parliament but for the British people, and there is virtually nothing that I, on behalf of the Government, would disagree with in the contributions of almost all hon. Members.
Britain has a long-standing relationship with China. As had been noted, we exchanged ambassadors 30 years ago, having maintained diplomatic recognition at the height of the cold war. In passing, I pay tribute to Sir Edward Heath for his constant work in maintaining good relations between the United Kingdom and China. I congratulate my hon. Friend the Member for Wirral, South (Mr. Chapman) on having obtained the debate, on his powerful and cogent speech and on his tireless work as chairman of the UK all-party group on China. The House and the Government owe him a debt of gratitude.
I first visited Canton, now known as Guangzhou, 20 years ago. At that time, there were bicycles, the odd, rather large, ugly black car and a few lorries. I was dumped back in my hotel at 5.30 for a dinner, given a vacuum flask of green tea and put in my room, where I remember watching the unfolding of the Falklands conflict via Chinese television. It seemed a lot clearer than the gentleman who was reading our news bulletins at the time.
I revisited Guangzhou recently. What a difference. Like Shanghai and Beijing, it is an extraordinarily strong, confident city of skyscrapers and apartment blocks, new cars and lots of people engaged in successful businesses. At the end of my stay, two young lady interpreters asked whether I could disco dance. I gave the first lessons at the Mao Zedong memorial agricultural institute. I may be responsible for having introduced disco dancing to a nation that has made it so much its own.
My message to business people, backpackers and gap year students is: go east young men and women, the future of the 21st century will be found in China. A two-hour flight away from Shanghai are 60 cities with more than a million people residing in them. In 10 years' time, the area stretching to Korea and Japan will produce 25 per cent. of the world's GDP.
As has been noted, China is rapidly becoming an economic power. It is also becoming a political power. Our relationship at diplomatic and political level is positive and good. The inward flow of visitors, including President Jiang Zemin and other senior officials, is strong and constant, and we regularly send top officials and Ministers to China. My right hon. Friend the Foreign Secretary will visit later this summer and I have been three times, having visited China more often than any other country for which I have ministerial responsibility. I hope to return in September.
20WH There has been an eightfold increase in students—some 20,000 now study in the UK—and we are witness to a new phenomenon: a remarkably successful capitalist economy controlled by a communist system. Young Chinese people are studying overseas in rising numbers, more than 3,000 British projects are being undertaken in China, and there is an increasing level of inward investment from Chinese businessmen in the United Kingdom. We need to sustain the rhythm of economic contact.
The human rights issue remains a pebble in the shoe—or perhaps a thorn in the side—of our relationship. There is no ducking the need to refer to it. We do not seek to preach or impose our norms; all we ask of the Chinese authorities is that they obey their own laws and respect their international obligations under the international covenants that they have signed or ratified. We do not attempt to impose a western or United Kingdom vision on China. We request that every country in the world obey its own laws and international laws to which it has put its name.
I am positive about China, as are the rest of the Government and the hon. Members who have spoken, but we need a little dose of corrective realism. The extraordinary economic growth that has taken place in China has happened through the classic method of rapidly developing industry. The impact on the Chinese environment from rapid industrialisation, especially the increase in desert areas, must be taken into account. My hon. Friend the Member for Birmingham, Sparkbrook and Small Heath (Mr. Godsiff) was gaily contemptuous of the Chinese ability to bulldoze through the planning norms that feature in this country and others. Planning laws appropriate to each society are a mechanism for containing industrial development so that it has some relationship with nature. However, we see positive signs from China in that regard, as it reduces its use of fuels emitting CO2 and works constructively with other Governments to tackle the problem of global warming.
We must also take a reality check on the issue of corruption and the need to develop the rule of law in the commercial field. A separation is needed of business from Government. I agree with the hon. Member for West Suffolk (Mr. Spring), who spoke for the official Opposition, that a fully functioning open market economy is incompatible with a closed, secretive and unaccountable political system.
We need to deal with the theft of intellectual property rights. My hon. Friend the Member for Birmingham, Sparkbrook and Small Heath was of course joking when he referred to his £2 Rolex watch. When I am in China, I get no pleasure from seeing Burberry coats and other rip-offs from British firms on sale for £2. The lack of respect for intellectual property rights is no laughing matter, and those who return from China with their cheap Mont Blanc pens, fake Lacoste shirts or Rolex watches are doing a grave disservice to the companies and the employees of companies who make those products in Europe and elsewhere. China also needs to consider the need for trade union reform, to allow an authentic and autonomous voice in its labour market.
Mention has been made of human rights in relation to Tibet, which is an issue that I have raised with Chinese Ministers and officials. I have requested them to have a dialogue with the Dalai Lama. Mention has also been made of Taiwan. Of course, we recognise the one- 21WH country system, but increasing commercial contact between Taiwan and China seems a better way forward than mutually reinforcing military systems.
China is a huge source of culture. I cite Gao Xingjian, the Nobel prize winner, whose book "Soul Mountain" I have read and commend to hon. Members, and the highly important work being done by the British Museum and cultural institutions in China.
In the end, however, our policy must be one of engagement, engagement, engagement. For too long, China was isolated, as the west adopted a policy of isolation. The British Government's policy is one of constant engagement with a view to China entering the world, living under the rule of international law and enjoying peace and stability with its neighbours and partners everywhere.
§ Mr. Deputy SpeakerExcellent Deabate