World / Economic Cooperation

Joining hands in business and culture

By Zhang Chunyan and Cecily Liu (China Daily Europe) Updated: 2015-10-16 08:13

After 43 years of full diplomatic ties, China and Britain are entering a "golden era of relations", with trade, investment, culture and education exchanges all on the rise, according to analysts. Leaders in both countries have used the term, including British Prime Minister David Cameron in his Chinese New Year speech this year, in which he predicted greater cooperation over the next five years.

President Xi Jinping's visit, from Oct 19 to 23, will be the first by a Chinese president in 10 years. In March, Prince William, the Duke of Cambridge, visited China carrying an invitation to Xi from his grandmother, Queen Elizabeth II. It was seen as the most important royal visit to China in nearly 30 years.

But what exactly does this mean for the countries and their people?

Joining hands in business and culture

Joining hands in business and culture

Joining hands in business and culture

President Xi Jinping meets with British Prime Minister David Cameron in Beijing in December 2013. Xi arrives in London on Oct 19. Xinhua

From a business perspective, industry experts say this signals a common interest in increased bilateral trade and more employment opportunities, stimulating further recovery in the British economy.

"The UK's trading partnership with China is of critical importance to our economic future," says Simon Moore, international director of the Confederation of British Industry, the UK's top business lobbying organization. "President Xi's state visit is a timely sign of the ever-deepening importance of that relationship, and will help further strengthen the trading bonds that link our two countries."

The nations already have strong trade links. China is Britain's fourth-largest trading partner. Britain is China's second-largest trading partner in the European Union.

According to the Chinese embassy in London, bilateral trade quadrupled between 2004 and 2014 from $19.7 billion to $80.9 billion. China-UK trade in goods totaled $36.74 billion in the first half of this year.

By last year, Britain's car exports to China had increased sevenfold since 2009, according to the British Society of Motor Manufacturers and Traders.

Bilateral investments also have boomed. By the end of last year, British direct investment had reached almost $20 billion in China with over 7,000 projects. Britain is the EU's second-largest direct investor in China. "The UK is the top destination for Chinese foreign direct investment in Europe," the CBI's Moore says.

China has invested more than $40 billion in Britain, according to the Chinese embassy. It went from $100 million in 2004 to more than $7 billion in 2014.

"Projects cover a wide range of economic fields, from infrastructure, commercial property, brand networks to research and development centers and high-end manufacturing," says Liu Xiaoming, China's ambassador to the UK.

More than 500 Chinese companies have businesses in the UK and, according to the UK Department of Trade and Industry, Chinese investment created more than 6,000 jobs in Britain during the 2014-15 budget year, ranking fourth among all foreign countries.

Telecoms giant Huawei Technologies, which opened its first office in the UK in 2001, contributed 956 million pounds ($1.4 billion; 1.3 billion euros) to GDP in the UK. It has supported 7,400 jobs directly and through its supply chain in the past three years, according to a report published in June by Oxford Economics, a British think tank.

Many Chinese companies are harnessing Britain's resources, industrial know-how and technology to produce quality products in the UK.

Zhejiang Geely Holding Group, which bought the iconic London Taxi Co in 2013, announced this year that it would invest 250 million pounds in a new facility.

"The investment is to develop and produce the next-generation, ultra-low emissions London black cab. We expect to generate up to 1,000 new jobs," says Li Shufu, founder and chairman of Geely.

Britain was also the first major country to agree to a currency swap with China, signing a deal last year worth 200 billion yuan ($31.5 billion).

Overall renminbi trading volumes in London rose 143 percent last year compared with 2013 as average daily volumes reached $61.5 billion, according to the City of London Corp.

In another sphere, hundreds of joint education programs, tourism promotions and cultural activities have brought Chinese and Britons closer on a personal level.

More than 150,000 Chinese students were enrolled at British schools and colleges last year, while in China, UK schools are running nine joint education institutions and 235 education projects.

The number of Chinese tourists last year was 230,000, and could reach 650,000 by 2020, according to British estimates.

"Chinese visitors have very positive perceptions of Britain. They already stay longer here than in our European competitor destinations and are high spenders," says Sally Balcombe, CEO of VisitBritain. "We aim to double the current annual expenditure in the UK by Chinese visitors to 1 billion pounds a year within the next five years."

So how might Xi's visit help cement a golden era in Sino-British relations?

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