Select Committee on Foreign Affairs Minutes of Evidence


Further supplementary written evidence submitted by the Foreign and Commonwealth Office

CHINA TASK FORCE: BACKGROUND

CHINA TASK FORCE MEMBERS

Rt Hon John Prescott MP—Deputy Prime Minister (Chair)

Lord Powell—President, China Britain Business Council (CBBC)

Sir Robin Saxby—Executive Chairman ARM

Mervyn Davies—CEO Standard Chartered Bank

Sir John Rose—CEO Rolls Royce Plc

Sir Stephen Brown—Group Chief Executive, British Trade International

Ian Pearson MP—FCO/UKTI Minister of State for Trade

Sebastian Wood—Director, Asia Pacific, Foreign & Commonwealth Office

Sir Richard Sykes—Vice Chairman, Imperial College

Professor David Norse—Pro-Provost, University College, London. Full Title: Pro-Provost for UCL's Co-operation with PR China & Professor of Environmental Management, University College London

Professor Sir Colin Campbell—Vice Chancellor, University of Nottingham

Dr Gary Dirks—Executive President and CEO BP China Ltd, Chairman British Chamber of Commerce China

Professor Elizabeth (Lisa) Croll—Professor of Chinese Anthropology of the University of London, and Vice-Principal of SOAS (the School of Oriental & African Studies)

Lord Chan—Chair of the Chinese in Britain Forum

Neil MacGregor—Director of the British Museum

  1.  The China Task Force was set up in November 2003, following visits to China by both the PM and the DPM in the second half of the year.

  2.  Originally asked to look at 4 areas: Science and Technology; Trade and Investment; Education; and Sustainable Development/Environment.

  3.  Series of recommendations presented by the DPM to Chinese Premier Wen Jiabao when the latter visited London in May 2004.

  4.  Further meeting of the task force in November 2004 to review progress, before DPM visited China at the end of Nov 2004 and presented a progress report.

  5.  Further meetings of the task force in July 2005 and October 2005.

  6.  Remit of the task force now expanded to include Culture, Health and Development issues, and new members recruited to add expertise in these areas.

7.  KEY ACHIEVEMENTS

  8.  The task force recommended that there should be annual UK-China summits at Prime Ministerial level. More than anything thing else, implementing this recommendation has given focus and impetus to our developing relationship with the Chinese.

  9.  On Science and Technology: the hugely successful British Year of Science in China has run all this year—incorporated a large number of events, big and small, across a range of scientific areas.

  10.  On Trade and Investment: bilateral programmes are making excellent progress in 5 key trade areas—Information and Communications Technology (ICT); Water; Financial Services; Energy; and Health.

  11.  On Education: first annual education summit held in February this year; new scholarship programme, Partnerships for Excellence, has been launched; Global Links scheme for schools has been expanded.

  12.  On Sustainable Development/Environment: Sustainable Development Dialogue being signed during this visit, which will provide a framework for further work with China on sustainable development, climate change, flood defence, and a range of other environmental issues.

ASIA TASK FORCE: BACKGROUND

ASIA TASK FORCE MEMBERS

Co-Chairs

  1.  Rt Hon Alan Johnson, Secretary of State for Trade and Industry

  2.  Bryan Sanderson, Chair, Standard Chartered Bank

Members

  3.  Brian Barwick, Chief Executive, Football Association

  4.  Karan Bilimoria, Chief Executive, Cobra Beer & Chairman, Indo-British Partnership Network

  5.  Howard Davies, Director, London School of Economics and Political Science

  6.  Prof Lord Desai, formerly at LSE

  7.  Baroness Dunn, Chief Executive, John Swire & Sons Ltd, Deputy Chair and Senior Non-Executive Director, HSBC

  8.  Clara Furse, Chief Executive, London Stock Exchange

  9.  Bill Gammell, Chief Executive, Cairn Energy plc

  10.  Sir Christopher Gent, Non-Executive Chair, GlaxoSmithKline plc

  11.  Dr Byron Grote, Chief Financial Officer, BP plc

  12.  Sir Digby Jones, Director General, CBI

  13.  Sir Peter Mason, Chief Executive, AMEC

  14.  Sir Tom McKillop, Chief Executive Officer, AstraZeneca plc

  15.  Dr Gerry Murphy, Chief Executive, Kingfisher plc

  16.  Sir John Parker, Chief Executive, Chair, P&O

  17.  Lord Powell, China-Britain Business Council

  18.  John Ridding, Chair, Pearson Asia

  19.  Tim Whiston, Chief Executive Officer, iSOFT Group plc

  20.  Willie Walsh, Chief Executive, British Airways plc

  21.  Sir Robert Wilson, BG Group plc

ATF Secretariat

31 October 2005

Minutes of the first meeting of the Asia Task Force held at 12:00 on Thursday 27 October 2005 at One Great George Street, London


Members present

Rt Hon Alan Johnson (Co-Chair)

Bryan Sanderson (Co-Chair)

Karan Bilimoria

Prof the Lord Desai

The Baroness Dunn

Clara Furse

Bill Gammell

Dr Byron Grote

Sir Peter Mason

Dr Gerry Murphy

Sir John Parker

The Lord Powell

Willie Walsh

Tim Whiston

ATF Secretariat, UKTI

Ian Fletcher

James Withers (Secretary)
Meeting opened by

Rt Hon Gordon Brown

Also present

Asif Ahmad

Caoimhe Buckley

Nikunj Khutti

Gregor Lusty

Frances Moffett-Kouadio

Kitty Parkes

Louise Proudlove

Apologies

Brian Barwick

Howard Davies

Sir Christopher Gent

Sir Digby Jones

Sir Tom McKillop

John Ridding

Sir Robert Wilson


Summary of action points

  1.  The Secretariat to arrange a date in March 2006 for the second meeting of the ATF.

  2.  The Secretariat to report back to the ATF on current Government activity on intellectual property rights.

  3.  The Secretariat to consider what can be learnt from the work of other countries on changing business attitudes to Asia.

  4.  The Secretariat to report back to the ATF on current Government policy considerations on student visas and international education initiatives.

  5.  The Secretariat to investigate a futures project on UK-Asia trade in 2020; to consider seminars and workshops involving members and their nominees; and to explore academic input on geo-political and human development.

  6.  The Secretariat to take forward work looking at mid-corporate companies' attitudes to and experience of trade with Asia.

  7.  The Secretariat to produce a summary of existing barriers and Government initiatives to overcome them from work already available.

  8.  The Secretariat to consider how ministerial visits could help deliver ATF objectives.

  9.  Members to inform the Secretariat of suggestions for further members of the ATF and to nominate a working-level contact for the ATF if they wish to do so.

DETAIL

Item 1: Welcome and launch of ATF

  The meeting opened with short speeches from the Chancellor and the two co-chairs. Gordon Brown thanked the members for their involvement in what he regarded as an important initiative. He indicated that he would welcome ideas and policy proposals for the Government to consider.

  Bryan Sanderson highlighted how different the Asian and Western markets are and said there would be challenges that the UK would need to overcome to grasp the opportunities in Asia. Alan Johnson described his objectives for the meeting: to look at where the ATF should focus its work and to develop an action plan for the ATF Secretariat to take forward.

Item 2: General issues

  The group accepted the Terms of Reference as a starting point for the ATF's work and its status as an informal stakeholder group to advise the Secretary of State for Trade and Industry.

  Alan Johnson thanked his co-chair, Bryan Sanderson, for his involvement and for providing a dedicated resource to work with the ATF Secretariat at UKTI. The group agreed that it would meet twice yearly.

ACTION: The Secretariat to arrange a date in March 2006 for the second meeting of the ATF.

Item 3: Themes for the ATF to consider

  Bryan Sanderson asked the group if they felt that the agenda captured the themes they wanted to focus upon. The following headings highlight the issues explored during the discussion.

General

  The group agreed that it was right to consider the barriers to trade with Asia, but also that the opportunities could be a good starting point. Sectors where there were no barriers and where it was easy to do business could be promoted, such as light industry and consumer products. Although there has been a shift in the UK to services industry, light manufacturing remains important to SMEs.

  Although there are many barriers to trade that originate in Asian countries, UK-based barriers, such as visa restrictions and lack of understanding of Asian business culture, should not be ignored.

  The ATF must not duplicate work already carried out elsewhere. It should be informed about other Government and business groups looking at barriers to trade with Asia and compliment and learn from their work.

Intellectual Property Rights

  Intellectual property rights (IPR) and their lack of enforcement is a huge problem. This is an issue on which the Government should take the lead on behalf of business. Areas that need consideration include lobbying for effective enforcement, help with capacity building and mechanisms to address specific infringements.

ACTION: The Secretariat to report back to the ATF on current Government activity on IPR.

Education

  Many Asian countries are cautious about allowing foreign education establishments to set up there. This presented a barrier to the export of education from the UK. Conversely UK-based problems, such as visa restrictions and high fees were likely to be responsible for the fall in numbers of students coming from Asia to study in the UK, despite the benefit of UK cultural links with Asia. UK universities do not give fellowships like those in the US, which means some Asian students can not afford to study in the UK.

ACTION: The Secretariat to report back to the ATF on current Government policy considerations on student visas and international education initiatives.

Involvement of the European Commission

  The European Commission (EC) looks at barriers to trade. The ATF should involve EC experts to help inform their work. The ATF could present its findings to the EC to highlight the issues that need tackling. The European Chamber has produced a series of papers looking at barriers to trade with China and Indonesia. There were likely to be similar barriers in Malaysia and other Asian countries.

Business culture

  The lack of knowledge of the culture of and approach to doing business in Asia was an area that needed particular improvement in the UK. Interpersonal relationships and how business people approach their opposite numbers in Asia were key. There was a lot of expertise within Asian communities in the UK, in UK universities' Asian studies departments and in British diplomatic posts abroad that could be used to help improve this. Asian studies as a discipline has declined in the UK: business sponsorship of these courses at universities might be a way of reversing this trend.

Business attitudes to trade with Asia

  The ATF could look at the attitude of UK industry to international trade and how UK businesses engage with Asian markets. The Germans were currently much better placed due to their better cultural understanding of Asia.

  The UK must demonstrate why Asia should chose the UK to trade with, rather than France, Germany or the US, for example. We should also look at how we can learn lessons from what these other countries are doing, for example the US in India.

ACTION: The Secretariat to consider what can be learnt from the work of other countries on changing business attitudes to Asia.

Focus of the ATF

  The group identified that determining the coverage of the ATF was a challenge. Asia was not a single place, and different regions had varied needs and presented different problems. Single themes that covered the whole of Asia were difficult to find and to work with. Country-focussed initiatives would be very important. The group suggested that the ATF might consider China and India, and two other countries, such as Thailand and Indonesia, when carrying out specific pieces of work. Korea was also worthy of study.

  The ATF should not confine itself to the items on the agenda. It was the view of the group that UK manufacturing industry should not be ignored when looking at UK trade with Asia.

  SMEs are well-placed to grasp the opportunities presented by Asia. Anything that Government could offer to help them would be valuable.

  It was important to encourage the interest of UK companies in Asia. Workshops or seminars could help to spread enthusiasm about Asia around the UK. Using SMEs with experience of the markets could be useful and has been successful in recent seminars related to India.

  It was also suggested that the ATF concentrate initially on Asian markets beyond China and India, as much work was already being done there. The counter argument was put that not enough work was being done to encourage UK trade with India or China. It was agreed that specific work could be done to target ATF countries other than China and India.

Item 4: The work of the ATF

  The group recommended that the ATF not only consider the barriers and obstacles to UK trade, but also look at how it could equip UK companies to deal with the opportunities presented by Asia. The following areas of work were recommended by the group.

UK-Asia Trade 2020

  Work to look forward to 2020 at the future demand of the Asian economies and the UK's ability to supply it would be valuable. This could help to identify the future threats and opportunities for UK companies.

ACTION: The Secretariat to investigate a futures project on UK-Asia trade in 2020; to consider seminars and workshops involving members and their nominees; and to explore academic input on geo-political and human development.

Involving mid-corporate companies

  A survey of the medium- to long-term practical difficulties that successful companies doing business in Asia have faced would be useful. This could also consider the opportunities. The lessons learned could then be communicated to companies to encourage trade with Asia. A suggested starting point was to understand the competitive environment in Asia and its future.

ACTION: The Secretariat to take forward work looking at mid-corporate companies' attitudes to and experience of trade with Asia.

  The group suggested that large and small companies have different requirements for help to enter Asian markets. It was important for UKTI to look at its capacity for dealing with mid-corporate companies within the UK and in selected hubs in Asia, possibly using secondees from UK companies as a way of developing this capacity.

Current barriers and work to lower them

  Work was being done in many places throughout the UK Government and in Europe to identify trade barriers with Asia. A useful first step would be to identify and weigh the importance of these barriers and highlight the mechanisms already in place to address them.

ACTION: The Secretariat to produce a summary of existing barriers and Government and other initiatives in place to overcome them.

High level visits to markets

  The group wished to consider how best to use ministerial and other high-level visits to markets to promote business objectives. Participants noted that some European and US businesses had a sustained level of support from senior political leaders in Asia. Positive references were made to the impact of the visit in September by the delegation led by the Prime Minister to China and India.

ACTION: The Secretariat to consider how ministerial visits could help deliver ATF objectives.

Item 5: Summing up and action points

  Alan Johnson asked the members to consider who else might be invited to be a member of the ATF. He thanked the members who had nominated a working-level contact for the ATF and asked other members to inform the Secretariat if they wished to do so.

ACTION: Members to inform the Secretariat of suggestions for further members of the ATF and to nominate a working-level contact for the ATF if they wish to do so.

  The group agreed that the minutes of their meetings should be published on the UKTI website and that publicity should be explored to highlight its work.

  Bryan Sanderson and Alan Johnson thanked the members for their contributions and closed the meeting.

ATF Secretariat

7 November 2005





 
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