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East Asia

I am pleased that we have secured this debate. The Foreign Affairs Committee report was published in August last year, and the Government’s response in October, but clearly the issues that we raised remain topical. Indeed, they will remain important for the rest of the century. The report is entitled ““East Asia”” and it deals with the region as a whole, but it focuses on the People’s Republic of China and its internal developments and neighbourhood. We tried to cover political, economic and military developments. Indeed, the growing importance of China presents the world with opportunities and challenges. The rise of China has been seen by some as a threat and by others as a chance to bring China into the world as an actor that can work alongside others to solve some important global problems. Our Committee visited the region in May last year. I remember that visit well because I had to miss the cup final—I am a West Ham fan, enough said—but I saw the match at the British Bulldog pub in Shanghai at 10 o’clock at night. As has become customary with our Committee, which has 14 members, we split into two groups for part of the visit. The group as a whole went to Beijing, then one group went on to Shanghai and rejoined the rest in Hong Kong before going on to Taiwan. Meanwhile, the second group left Beijing a little early and went, under the leadership of my Committee colleague the right hon. Member for Tonbridge and Malling (Sir John Stanley), to visit Tibet. That clearly covered an interesting and diverse range of the parts of China and the region. We had some problems with the Chinese authorities and political figures when they discovered that we were going to Taiwan. We were told that there would be serious consequences. However, as far as I can assess, the serious consequences were that members of the Culture, Media and Sport Committee had some difficulty getting their visas a few weeks later. We found the fact that we went to Taiwan important for our overall perspective on the cross-straits issues and the role of the region as a whole in investment and political development. I am conscious of the fact that a number of hon. Members wish to speak, so I want to concentrate on the aspects of our report that concern the People’s Republic of China. Perhaps my colleagues will be able to supplement that. With 50 conclusions and recommendations, as well as Government response to those, it is not possible for me to go through them all. China’s economy has been growing for many years at rates that would be regarded in Europe as phenomenal, with an annual growth rate of 10 per cent. and a massive growth in exports. Our Committee concluded, and the Government agreed, that the growth of China’s trade will continue to have significant impact on the world economy by providing consumers with cheap goods and by competing strongly with manufacturers in other countries. We all know the anecdotes about the fact that one can go into a toy shop anywhere in the world and find that the toys are made in China. The fact is that China and its economic rise pose a challenge. Will China play by the international rules or will it by various measures work to undermine the manufacturing industries of other countries and their export potential? We recommended that our Government should work both bilaterally and with our European Union partners to ensure that China works within the spirit, not just the letter, of its obligations to the World Trade Organisation. The Government told us in their response that they want"““to work together with China as responsible leading members of the international community and support its closer integration into the international system, including through multilateral institutions such as the World Trade Organisation””." It is of course important that China comply with its obligations and refrain from anti-competitive practices or dumping in western markets, but it is also important that the rest of the world resist the temptation to go towards protectionist measures that, although they are superficially attractive to some industries and some workers, will be self-defeating in terms of their wider consequences for the economy of the country concerned and the world as a whole. Various international forums involve the Chinese with regard to trade issues, including the bilateral annual UK-China summits, the EU-China dialogue and, of course, the WTO. I would be grateful if the Minister updated us on the position on those issues and whether we are satisfied that the Chinese are complying and working to the spirit, as well as the letter, of their obligations. We expressed concerns, too, about China and intellectual property rights. The Government say in their response that they believe"““that China has established a generally robust legal framework providing for the protection of intellectual property””." We were also told that the UK and China are co-operating on enforcement of that framework. Have any results come from that? According to the Foreign and Commonwealth Office, the UK is the fourth largest EU exporter of goods to China and the largest cumulative EU investor in China, but the Committee remains concerned that official support for British business in China is unco-ordinated and insufficient. The Government response stressed the importance of investment rather than trade, but also noted"““plans for a significant increase in our resource in China to achieve a step-change in our profile””" in the period up to 2008. Since the report was published, we have taken evidence from the head of UK Trade & Investment, Andrew Cahn, who told us last December that he was satisfied with the support given to UKTI by Ministers—he praised the Minister by name—and that British companies were getting support in general from the Government.