I’m backing China, says David Cameron as he arrives in Beijing

British prime minister, David Cameron, calls for new trade agreement as he flies into Beijing hoping to appease leaders angry at Dalai Lama meeting last year

PUBLISHED : Monday, 02 December, 2013, 12:06pm
UPDATED : Monday, 02 December, 2013, 12:24pm

Britain will act as China’s strongest advocate in the west, British prime minister, David Cameron, declared last night as he flew into Beijing pledging to lead a “dialogue of mutual respect and understanding”.

In a sign of the British government’s determination to appease Beijing, which was furious when Cameron met the Dalai Lama last year, the prime minister said that no country was more open to China as he called for a new EU-China free trade agreement.

Writing in the Chinese weekly news magazine Caixin, Cameron said: “Put simply, there is no country in the western world more open to Chinese investment, more able to meet the demands of Chinese consumers, or more willing to make the case for economic openness in the G8, the G20 and the European Union. And there is no country more ready to forge a dialogue of mutual respect and understanding that can address issues of concern and advance our shared interests in the world.”

The PM’s effusive praise for China came as he landed in Beijing at the head of Britain’s largest overseas trade and ministerial mission, designed to restore full relations after his meeting with the Dalai Lama. The delegation includes the architect Zaha Hadid, ex-England footballer Graeme Le Saux, Arts Council chair Sir Peter Bazalgette, the chief executive of Jaguar Land Rover, Ralf Speth, and Karren Brady, the vice-chairman of London football club West Ham United.

But Cameron came under fire last night from Labour for including figures close to him in the delegation. On the trip are his stepfather-in-law, Viscount Astor, representing Silvergate Media; the Conservative (Tory) peer Lord Chadlington, who helped to house the Camerons when the PM first fought the parliamentary seat of Witney; and the Tory donor and peer Lord Leigh of Hurley, of Cavendish Corporate Finance. Jon Ashworth, the Labour party Cabinet Office minister, said: “Whether it’s dinners for donors or jetsetting trips for his friends, David Cameron rarely misses a trick to favour those close to him. Meanwhile, everyone else is offered no respite from the everyday reality of the Tory cost of living crisis.”

Cameron will meet the Chinese president, Xi Jinping, in Beijing for talks and dinner today. He will then travel to Shanghai, China’s commercial capital, returning to Beijing tomorrow for talks with the premier, Li Keqiang.

Cameron will visit Chengdu on Wednesday before returning home in the evening before finance minister George Osborne’s autumn statement on Thursday.

The PM said he was best placed to champion China in the west, months after China and the EU came close to a trade war after Chinese companies were accused of dumping EUR21bn of solar panels at below cost price last year. An EU threat of punitive duties prompted China to threaten sanctions on German cars and French wine.

EU and Chinese leaders launched negotiations on a bilateral investment treaty at the 16th EU-China summit in Beijing last month to increase bilateral trade from about $580bn last year to $1tn by 2020. But there is deep scepticism in Brussels at the idea of an EU-China free trade deal amid fears that China would use it to flood the market with cheap goods. The EU is China’s biggest export market, while China is the EU’s second-biggest export market.

In his article for Caixin, the prime minister swept aside recent EU concerns over Chinese rules that mean Europeans must work with a Chinese joint venture partner and hand over sensitive technology. The European commission highlighted concerns over China in May when it said it was prepared to launch an anti-dumping and anti-subsidy investigation into Huawei, the world’s second-largest telecoms equipment manufacturer.

The prime minister, who said an EU-China free trade agreement would be worth GBP1.8bn a year to the UK alone, wrote: “Last year China became the world’s largest trading nation. Next year China is set to become the world’s largest importer of goods and later this century it will become the world’s biggest economy.

“We should be clear that there is a genuine choice for every country over how to respond to this growing openness and success. They can choose to see China’s rise as a threat or an opportunity.”

On the proposed free trade agreement, he wrote: “I now want to set a new long-term goal of a comprehensive EU-China free trade agreement. And as I have on the EU-US deal, so I will put my full political weight behind such a deal, which could be worth tens of billions of dollars every year.”

The Labour leader, Ed Miliband, is to warn that there is no point in trying to compete with China on low wages. Talking to staff at the VW National Training Centre in Milton Keynes, south-east England, today (1DEC) he will say: “David Cameron needs to understand a simple truth: we’re not going to win a race with China by winning a race to the bottom, by competing on low pay and low skills. And, if we try, it will be the people of Britain who lose.”

He will say the UK should “compete on the basis of high-skill, hi-tech, high-wage economy - encouraging small businesses who want to grow, helping young people like you who want to get on and businesses like these which want to train, backing the real wealth creators in our country.”