This week I will be in Xi’an, in China’s Northwest Shaanxi province to attend the Silk Road Expo. The Expo is a significant, rapidly growing trade event which will see companies across the world attending in an attempt to seize the growing commercial opportunities offered by the Belt and Road Initiative (BRI).
The Belt and Road Initiative (BRI), for those unaware, is at the heart of China’s drive to continue its rapid development. BRI could turn out to be the largest ever infrastructure project since the Marshall Plan with close to a trillion dollars being invested across the globe. It involves investing in infrastructure projects throughout Asia, and central and eastern Europe, which are expected to be significant drivers of global growth and economic development across Asia and beyond for generations to come.
For the UK, BRI offers enormous commercial opportunities, because our country has a strong track record of delivering excellent infrastructure that supports economic growth and development; increasing connectivity and trade, reducing costs, and improving access to public services like education and health. These principles lie at the heart of China’s plans.
We can also offer value in a range of other sectors vital to make the Belt and Road Initiative a success. Through our leading financial institutions, we can add real value in a way few, if any, countries can match. For example, the UK exported £63.7 billion worth of financial services in 2015 – the largest exporter of financial services in the world.
That’s why we intend to position London as the premier global centre for funding and facilitating BRI projects. Year after year our financial and professional services sector have been judged to have the most impressive infrastructure, the best skills, and the top overall reputation. We want our financial services sector to use its emerging markets expertise to ensure projects along the Belt and Road routes are bankable, legal and sustainable.
It is not just the Belt and Road Initiative which lies behind our optimism for future UK-China trade ties. Today, technological advancements are creating a new more seamless world with global supply chains meaning that simple labels such as “Made in China” or “Made in in the UK” are becoming redundant. We need to re-think our concepts of global trade and take advantage of the opportunities created by this change.
Both the UK and China recognise the value of globalisation as already reflected in the record levels of UK-China trade ties – currently worth more than £59bn, with UK exports to China growing by over 25 per cent last year alone.
And there is no sign of that growth stopping; China’s middle class is expected to number 600 million by 2020 – greater than the current entire population of the EU.
This too offers fantastic potential for UK businesses looking to sell their goods and services in China, as illustrated by the £9.8bn worth of trade deals signed by the International Trade Secretary Dr Liam Fox’s visit to China and the Prime Minister earlier this year. These deals covered a range of sectors, including energy, education and financial services, and included major new investments into the UK.
Securing these deals was a great way to kick start 2018, but they are just a taste of the feast of trade opportunities in the years ahead, as a result of technological advancements opening up an ever-more connected world.
This, of course, presents opportunities for UK businesses in markets that wants our goods and services. This month I helped lead a delegation of hundreds of UK businesses to the GREAT Festival of Innovation in Hong Kong. Entrepreneurs and businesses of all sizes came together for a festival that was a shop window for the best of British creativity and innovation, and a golden opportunity for British companies to create new business relationships with China.
As China rebalances and reforms its economy, with the Belt and Road Initiative as its flagship initiative, UK companies, technology and services can support its development and help it achieve its ambitions.
In Xi’an today, it is abundantly clear to see the array of global opportunities which are on offer for UK companies, in a whole range of sectors. I am determined to make sure the Department for International Trade is supporting efforts to help businesses export and trade more, in doing so securing jobs and growth back home.