British chancellor should offer innovation,not the usual suspects in Beijing

By Jon Geldart

This weekend (14th - 15th December) British Chancellor of the Exchequer Phillip Hammond will be in Beijing for bilateral talks with Chinese Vice Premier Ma Kai. It's an interesting time for these talks, coming as they do hard on the heels of Prime Minister Teresa May's widely acclaimed personal triumph over the first phase of the Brexit negotiations. Whilst there are a number of likely topics for discussion, such as the possibility of bond trading between the London Stock Exchange and Shanghai, which has been around in the wings of debate for the last two years, there will, I hope, be a discussion of the potential for wider trade links. 

As Britain readies itself for the divorce with Europe I have been talking to businesses as well as local political leaders in the UK, and specifically the North of England where I spend much of my life. Across the industrial and political spectrum there is a unanimity of view that Britain needs to look outside of Europe and away from the other usual suspect of the US for its exports and collaborations. I really hope Mr. Hammond is bringing a few surprises in the diplomatic bags. 

British Chancellor of the Exchequer Philip Hammond holds the budget box as he leaves 11 Downing Street to announce the spending budget in the House of Commons, in London, Britain, on March 8, 2017. [Photo: Xinhua]

Maybe it will be evidence of the widely known, tried and trusted expertise on governance from such organizations as the Institute of Directors, with its Royal Charter to support the personal development of better directors to run better businesses. I'd suggest this might be of interest to those growing, expanding, reforming and developing SOEs as well as anyone in the business of improving the governance of provincial government. Alternatively it might be some of the bright and burgeoning developments in High Speed Rail technology or Medi-Tech from the University of Leeds (also the home of the UK's National Health Service), High-Tech innovation expertise from the likes of Oxford and Cambridge or Marine Biology and renewable energy from my alma mater of St Andrews University in Scotland.

I hope the Chancellor will also remind his Chinese hosts, politely of course, that the British have a remarkably high number of cultural and other similarities to China which are often overlooked. From our long, and sometimes infamous, history to our strong sense of family. The notions of our ability to keep calm in a crisis, that our word is our bond and that we do what we say, modestly and quietly, are strong cultural connections with a China built on relationships which are patiently crafted over time. These cultural ties and links should not be forgotten. 

At a point in history when we are seeing Fortress America retrenching under President Trump and a rebalancing of global economics, it is worth remembering that our smallish island on the Western reaches of the European continent is a source of immense innovation, expertise and experience which might be of value to a growing, confident and economically stronger China which is rebalancing and refocusing its own sense of self. Britain excels in precision engineering too and is the home of most of the worlds' Formula 1 teams as well as Xtrac gearboxes, Cosworth engines and Prodrive motorsport not to mention the hand-made Morgan cars. We have always been good at innovation and invention and this is no different today than it has been throughout history. Putting British innovation and Chinese scale together could be an interesting and potentially 'game changing' economic winner. 

Of course I could go on, and on, about the new young textile designer from Leeds (West Yorkshire) daring to exhibit and sell in to China, the Birmingham (Midlands) company supporting the clean-up of contaminated land in Tianjin, the Harrogate (North Yorkshire) Spring Water now quenching the thirst of international air travelers on Chinese airlines and many other examples of British companies ready and willing to partner with China to create value and wealth on both sides of the world. 

The 'usual suspects' for governments are the big and already internationally famous corporates but I would encourage Mr. Hammond to open up the diplomatic bags with case studies from the vibrant and dynamic economy of the mid-sized corporates and education establishments of Britain, all of which have things which will complement the AI, High-Tech and Innovation+ ambitions of China, both at home and as it forges overseas along the Belt and Road to the West.

(Jon Geldart is UK Institute of Directors Chairman for Yorkshire and Humber, and Executive Director of a large professional services business in China. He is an author and regular writer and speaker on China.