Sweet Chinese dreams
The 6th PAA Government Affairs Forum in Beijing saw 100 Chinese Government Relations professionals grappling with President Xi Jinping’s plans for global economic dominance.
Public Affairs does not exist in Communist China. What does exist is Government Relations or GR. Being a GR professional in China is more about getting the message defined, agreed and understood. It certainly is not about access and more about how you can get things moving according to the Government’s plan.
At the 6th PAA Government Affairs Forum in Beijing, which I attended, the 100 Chinese GR professionals grappled with President Xi Jinping’s China Dream and what the new normal really means for business, investment and growth. Xi has a dream – which many do not truly understand – but never the less it’s a sweet dream which works to deliver China’s global economic dominance.
China now tops the leader board and is the world’s largest economy – knocking the US off the top spot. The Chinese economy is worth $17.6 trillion. China’s new normal is a strange concept based on slowed growth and a new order. China is cleaning up its act. It wants to look and feel less dirty, address health and safety issues and tackle corruption. In brief the new normal is about looking more normal on an international scale and looking more like the leading economy it is. So the new normal is about slowing the economy to 7% growth.
Can you imagine 7% GDP in the UK – surely that would be George Osborne’s dream!
China has over $4trillion stashed away in foreign reserves and its investment in other economies will exceed $500billion in the next 5 years. Clearly George Osborne is keen and has been quick to support the China Dream. He wants the UK get some of the action and is clearly pinning his hopes on greater Chinese investment in the UK and specifically the North if he is to achieve his dreams of a Northern powerhouse and cancelling the deficit.
Osborne’s drive to get in the room is probably right but what I heard was not such a sweet dream. Everyone wants a bit of the China Dream. Crazy but the new normal makes it possible. If China is cleaning up its act and tidying up its health and safety rules the new normal can only be good for China and good for all.
When in China I was told by many that, in the grand scheme of things, the UK was not the number one destination for Chinese investment. Everything takes too long… China wants quicker results. Things move fast in China despite the slowing down of the economy.
High speed rail links and infrastructure emerge at break neck speed. The Chinese can’t comprehend the slow pace of decision making for investment and infrastructure projects. It doesn’t really work for a Chinese investor.
Germany looks far more attractive. The European referendum looms large and George and Dave will need to be more fleet of foot if they are going to make the UK look more appealing. On the upside the UK does have potential as a good manufacturing for Chinese investors but generally the UK needs to up its game.
The UK needs to work hard to get a piece of China’s new normal which will make it easier to trade both ways. The new normal is happening and George is not wrong to look to China as the solution but we need to be quicker and smarter if George’s dream is to become a reality.
Blog originally published in Public Affairs News