In my last piece on this site, I discussed some of the
main themes in current Sino-British trade ,and began to look at some remedies
needed. In particular, I tackled one great area of complacency: the idea that
although Britain's services-focused economic structure was not as strong in the
emerging markets as manufacturing powerhouses such as Germany, we would still
benefit in the "next cycle", as those economies matured and required
services. I pointed out that there are precious few examples of any emerging markets
allowing as much foreign presence in services as they do in products – and that
this hope was most likely a fallac.
Following on from this, and partly in
relation to some of the responses I have had, both to the piece and more
generally, I want to tackle the second great area of complacency which I detect
in our British mentality: the idea that as long as we keep our own house in
order, things will be fine. This school of thought argues in essence that we do
not need such a thing as a "China policy", or an "India policy"
or anything else. We should remain true to who we are (possibly in conjunction
with an exit from Europe), and our patience will be rewarded.
For a start, this way of thinking
demonstrates a dangerous parochialism which prevents Britain from taking on the
challenges of globalisation head-on. It is instructive to note how far we are
from our American cousins for whom "China
is an overarching backdrop to almost everything" being discussed on
Capitol Hill. Naturally. we do not have their geo-political priorities But, ideally, our own discourse should resemble more closely that description than
the sad "black box" which currently exists. We need to talk more at
Westminster about China.
Moreover, this attitude does not recognise
the realities of our current relative position, or future trajectory. At some
point, Britain will have to embrace its position as an underdog rather than a
major player, and we have to understand that how we implement and conduct
government-to-government trade policy is totally different in each
circumstance. The days of corporate imperialism – when Britain could aim to
dictate trade with the emerging markets on its own or even equal terms – are
long gone. Instead, we must be flexible, and aim to shape ourselves to provide
what others need on their terms.
Let us be clear that it is not beneath us
to tailor ourselves in such a way. Yet a certain hubris seems still to be the
instinctive reaction amongst much of the population and in certain parts
of the Conservative Party. Although, in practical terms, much good work is done
by the likes of the UKTI and others on the frontline, in psychological terms it
strikes me that the critical sea-change has not been reached.
I make no apologies for the unashamendly
self-flagellatory tone of all this. However, to me it also offers the best
hope for Britain's future. When this mindset is changed, Britain will be
well-placed, with its natural creativity and enterprise, to benefit – indeed, it
will be better placed than apparently stronger performers of the moment such as
Germany who, cocooned in the comfort of their current advantages of quality,
will not adapt as quickly.
The mentality of the underdog is key. As a
student of history, it has always struck me that our "Imperial
Hangover" is not just unhelpful, but also completely misplaced. Britain
reached its decadent heights in the late 19th century, to be sure; but its peak
of achievement as a nation came well before that – before 1830. Britain at its
very best was not the land of mature industrial revolution, but a country of
pirates, privateers, entrepreneurs and hooligans who travelled the world –
stole, invented, sold and traded.
To return to the subject at hand, what
could such individually-tailored policies include? Taking but one example,
visas are just such an area. There is simply no reason for applicants from
China to be caught up in the general rhetoric of "reducing
immigration". Whether you are against immigration or not, it is patently
obvious to those who are familiar with the situation that very few Chinese
people younger than 35 have any intention of staying in Britain after they
finish being a student or their business. Why would they? There is far more
opportunity for them in China. The very ignorance of such a dynamic is
indicative of the parochial attitude which can infect policy-making even when
it does not intend do. But what is policy for China does not have to be policy
for India, Bangladesh, Indonesia or Mexico.
Therefore I come back to two principle
guidelines in response to these two great complacencies: first, engagement;
- Engagement, insofar as the British political
establishment must learn to treat China and other emerging markets as
distinctive and proactive policy areas, and try to understand them
individually. There can be no lazy, catch-all "Emerging Markets
policy"; nor a continued Anglocentric mindset which does not allow us the
knowledge or flexibility needed for the future.
- Humility, in the sense that we need to relinquish
the idea that we are dealing with such economies on "equal terms".
Yes, we have great things to sell; but they will decide what they need, and we
need to be humble about how to sell ourselves. This is particularly true since
foreign governments form such a large component of their consumption compared
to the West.
If these two ideas can be digested and
internalised, there is still a great future for Britain as an entrepreneurial
middle-ranking country which can punch above its weight in influence. Again, it
would put us in an advantageous position compared to our peers in Europe. If we
do not adjust, however, Britain will continue to slide down the path of
irrelevance for the likes of China.
This is the best moment for pre-emptive action
– and changing things whilst we can still catch up.