Eyeing the future(2)

Pressing forward

Despite obstacles, China-Britain economic cooperation has seen substantial progress. At present, Britain is China's third largest trading partner and second largest investment source in the EU as well as a major destination for China's overseas investment. Annual two-way trade surged from $20 billion a decade ago to $70 billion last year. China's investment in Britain has amounted to $13 billion over the past two years alone, surpassing the total of the previous 30 years. Statistics show that China has a stock of investments in Britain worth around $19 billion. That compares with $9.2 billion in France and $5.6 billion in Germany.

Most observers believe that the economic cooperation achievements did not happen by accident. As the economies of China and Britain are highly complementary to each other, the two countries enjoy a sound cooperative foundation in trade and economy.

Ma Zhengang, former Chinese Ambassador to Britain, said that China, with a well-developed manufacturing industry, and Britain, which boasts highly developed finance and service sectors and advanced technology, have massive potential for cooperation.

"When I started my term as ambassador in London in 1997, bilateral trade volume was just around $6 billion. Last year the figure reached $70 billion. The progress has not been made by chance," Ma said.

In addition, the two countries have set up various high-profile exchange mechanisms in recent years to facilitate bilateral cooperation, including the prime ministers' annual meeting as well as economic, financial and strategic dialogues.

Now, Li's latest trip to London has injected new momentum into the China-Britain comprehensive strategic partnership, which celebrates its 10th anniversary this year.

The trip harvested a series of trade and investment deals worth over $30 billion, the highest in recent years, with cooperation areas covering finance, technology, education, energy and infrastructure. Premier Li also proposed that China and Britain expand two-way trade to reach a target of $100 billion by 2015, further consolidate the political foundation of bilateral relations, and promote common growth and inclusive development, so as to speed up the development of Sino-British ties.

Beyond all doubt, the mutually beneficial cooperation deals meet the practical needs of both sides.

Cui at the CIIS noted that the rich experience of Britain in industrialization and urbanization offers very valuable lessons for China. Meanwhile, China's further opening up provides British firms as well as China-Britain strategic cooperation with more opportunities.

Professor Wang Yiwei at the Beijing-based Renmin University of China echoed Cui, saying that seeking the opportunity of China's deepening reform and opening up might be very helpful for the economic recovery of Britain. Meanwhile, Britain's relatively aging infrastructure offers great opportunities for Chinese investors and exporters.

"China's low-cost and efficient high-speed rail technology and infrastructure construction technology can help Britain promote its urban development," Wang said. "London's willingness to develop itself into an offshore renminbi business center would be also conducive to enhancing its status as an international financial hub."

Under a framework cooperation agreement signed during Li's visit, Britain welcomes Chinese firms taking part in its planned high-speed HS2 rail network, a 42-billion-pound ($71.2 billion) project, with the first 192-km stage linking London and Birmingham.

In a joint statement, the two countries announced a decision to set up a renminbi clearing bank in London. The move will help the two countries realize direct trade between the renminbi and the British pound, which is conducive to completing the market infrastructure, reducing transaction costs and exchange risks, and facilitating the development of mutual investment and trade.

The two countries have also made great efforts to deepen people-to-people exchanges. During Li's visit, the British Home Office announced a new visa service for Chinese visitors to travel to the country. All Chinese visitors will be able to use a single form to process applications for both British and Schengen visas, which permit access to 26 European countries.

Observers noted that the new British approach, which streamlines the Britain's visa process, can help the country explore a much larger Chinese tourism market and contribute to people-to-people exchanges between the two countries.

Statistics from the UK-China Visa Alliance show that about 1.3 million Chinese tourists have been prevented from entering Britain because of the complicated visa process, and most instead went to Germany or France.

As both a traditional power and a financial center, Britain holds an important status in Europe. Analysts claimed China's strengthening economic and financial cooperation also adds up to a larger China-EU economic cooperation partnership.

"London could play a constructive role on issues concerning a China-EU investment agreement and a China-EU free trade zone, which are also to Britain's benefit," said former Ambassador Ma.