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13 Oct 2009 : Column 33WH—continued

11.34 am

Jo Swinson (East Dunbartonshire) (LD): I congratulate the hon. Member for Cities of London and Westminster (Mr. Field) on securing the debate and opening it with such eloquence, setting out the economic challenges that the UK and other countries will face in the context of China's growth and emergence as an economic powerhouse. It is an important subject and, as is often the way with 90-minute debates in Westminster Hall, we could spend much more time discussing it, because it
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has so many aspects. We have heard about the economic side and the hon. Member for North Wiltshire (Mr. Gray) has focused on Tibet.

The recent celebrations of the 60th anniversary of the People's Republic of China were well publicised. I share the concern expressed by both hon. Members about the fact that China chose to celebrate with cruise missiles, unmanned drones and nuclear missile carriers, because those are not what most people would think of as the main symbol of their country's pride. There is genuine concern about freedom of expression and the human rights situation in China, and I will touch on that in my remarks. However, it is important, when passing judgment on other countries, that we look to the difficulties that we face in our own country. It is particularly interesting to note that today The Guardian, a national newspaper, has effectively been gagged, preventing it from reporting on Parliament in relation to the Trafigura issue. It is important to recall that not everything is perfect here. However, it is also interesting to see how that matter has been taken up by the internet.

The hon. Member for North Wiltshire mentioned the huge number-in the thousands-of bloggers in China. Issues to do with freedom of expression in China will be dealt with by the increasing use of the internet. China spends a great deal of money trying to repress the internet, shutting down sites and so on: YouTube and a lot of other websites have had content from China removed from time to time. For example, if people in China google "Tiananmen square", they get information about the history of the landmark and about visiting it as a tourist attraction, but they will not receive any news within that web search on the atrocities that happened there. Ultimately, however, although China tries to repress the internet, it will end up being a tool for opening up democracy within that country.

Obviously, the huge economic growth of China has brought with it much greater political influence. China is becoming increasingly important in many different diplomatic areas, including nuclear proliferation in North Korea and Iran and human rights issues in Burma, Sudan, Zimbabwe and Sri Lanka. The challenge for the UK is to work out how best to engage with China across a range of issues, not least climate change, where it has a crucial role to play. I welcome the Government's strategy, published earlier this year, called "The UK and China: a Framework for Engagement." I will pick out some points from that in my remarks.

If anything good has come out of the global recession-it is sometimes important to look for silver linings-it is unprecedented international co-operation on economic matters. That will be important as we face global challenges, including a transition to a low-carbon global economy as we approach peak oil, for example. The fact that the G7 has recently decided to make way for the G20 as a forum for global discussion is welcome. It is vital that we recognise the importance in such talks of the emerging economies of China, India and Brazil. China's importance in the move from G7 to G20 is key. We need to go further and reform other international institutions, including the International Monetary Fund, to ensure that the realpolitik of the global environment is much better represented.

As the hon. Member for Cities of London and Westminster mentioned, there are differences in the structure of China's economy versus the economies of
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the west. China's saving rate in 2008 was more than half its gross domestic product. China requires a reduction in saving, but that is the opposite of what we need to do. It recognises that its people need to spend more to increase its stability. As it reforms its welfare state and health care systems, that will reduce the incentives for the Chinese to save so much of their income, which is in effect an insurance policy and safety net that they create for themselves.

The Chinese are having to change their mindset and culture with regard to their economic habits, and we need to do the same. The average adult in the UK owes more than £30,000. That personal debt is, as I am sure all hon. Members are aware, a huge burden that people are bearing within the difficulties of the recession. An essential task for the Government is to reform the regulation of credit and debt in the UK, so that it is no longer possible for people to get into such unsustainable personal debt. The hordes of junk mail that come through people's letterboxes urging them to take on thousands and thousands of pounds more debt need to be curbed.

Mr. Brooks Newmark (Braintree) (Con): In the same way as the hon. Lady is arguing that the Government should have responsibility with regard to how much their debt builds up, surely consumers themselves have a responsibility to decide how much debt they should be taking on.

Jo Swinson: The hon. Gentleman is right to say that consumers, too, have a responsibility, although I argue that there is a role for financial education because it is difficult for people to take on that responsibility if they are not well informed about the different products available and what APR means. There needs to be much more information in a very accessible format within the formal education system at school, but people who have left education should also be able to access such advice. Yes, people need to take responsibility, but that does not let off the hook companies that act irresponsibly by lending more than people can repay and by having sky-high interest rates that are just unjustifiable.

David Taylor (in the Chair): Order. The hon. Lady seems to be wandering a little from the main topic that we are debating.

Jo Swinson: I welcome your advice, Mr. Taylor, and shall return to the specifics of China.

China is becoming the biggest economy in the world, so we must ensure that we maximise the benefits for the UK. We are the top EU investor in China and it is right that that should continue to be the case. I welcome the Government's stated aim to equip British people with a much better understanding of China and Chinese language skills. Will the Minister enlighten us about how the Government intend to do that? On my visit to China, I was struck by how huge the language barrier is, because of course it involves not just a language, but an entire alphabet and different symbols. I am not convinced that it is necessarily an easy language to learn. None the less, we should be encouraging that to be happening to build better relations economically and more widely.

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Climate change is a crucial issue in our relations with China. China has quickly become the world's biggest polluter, and we need to have its commitment at Copenhagen in December if we are to achieve a good deal. I was lucky to visit China last year with the Environmental Audit Committee. We were undertaking an inquiry into the international context of climate change post-Kyoto. I have to say that I was pleasantly surprised by the efforts that the Chinese were already making on that issue. They seemed to be truly committed to reducing emissions per yuan of GDP, which is very welcome, but the challenge that we face relates to the scale of the change taking place in China.

Industrial pollution was mentioned as a visible sign of that. I was struck by the huge motorways going through Beijing. They were eight lanes wide and absolutely gridlocked with the increase in traffic. The fact that hundreds of millions of Chinese are still without access to electricity means that, rightly, there is an incentive-an imperative-for the Chinese Government to improve living standards. However, the downside of that is that they are rapidly building more coal-fired power stations, so working with the Chinese on climate change is essential.

Mr. Newmark: The subject of the debate is UK relations with China, and the UK does have a particular expertise in carbon capture and carbon sequestration, which BP has been leading, I think, in Scotland. Surely we should be using that technology as a means to enhance our relationship with China, because it has about 200 to 300 years-worth of coal, particularly dirty coal. Working with the Chinese, perhaps using that technology, we can help to enhance our relationship and improve the situation with regard to climate change.

Jo Swinson: The hon. Gentleman is right to say that technology transfer is a vital part of the relationship, although again, one of the things that surprised me when I visited China was how far ahead the Chinese already are on technology such as carbon capture and storage. We met a collaboration of seven different companies-I think that they are mainly state companies, even though they have different names-that had come together in China to work on CCS. Given the speed at which we are progressing on the issue in the UK, there is a real danger that the Chinese will get the technology up and running before we do, although obviously we should be ensuring that we share that knowledge and information because it is an essential piece of technology. As the hon. Gentleman rightly says, China has coal; it will want to ensure that it provides electricity and it will do that through dirty-coal-fired power stations. We must ensure that CCS technology can be retrofitted to them.

There are other things that we could learn from China on climate change. Its stimulus package announced last November involved huge investment of $90 billion a year for two years in high-speed rail. The Maglev technology used there has been mentioned, whereas high-speed rail in the UK is lagging far behind, although it would provide a much lower carbon alternative to domestic flights.

The Copenhagen conference is only weeks away. I am pleased that the Prime Minister has decided to attend; it is right that world leaders at the very top should be meeting. I say to the Minister that failure is simply not
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an option; the issue is far too important. We need to ensure that we get China, the world's biggest polluter, on board.

Some human rights issues have already been raised. China is contributing huge amounts of development aid to developing countries, but that is often being used as a way to buy influence. The aid is being used in exchange for access to energy resources. Energy security seems to be driving a huge amount of what the Chinese do. That has resulted in quite a few problems in the international sphere when China has failed to use its influence to prevent human rights abuses-for example, in Sudan. I hope that the Government will continue to pressure China to use the leverage that it has in Sudan to end the support for the militias that are causing such destruction and committing so many awful atrocities in Darfur. It is vital that China, which has huge economic power, also uses its increasing political power. That is why the Government's aim of encouraging China to define its interests more broadly, as outlined in the framework document, is absolutely right.

The hon. Member for North Wiltshire spoke about Tibet. I welcome the recent visit by the Minister of State, Foreign and Commonwealth Office, the hon. Member for Bury, South (Mr. Lewis), to Tibet and his article on TheGuardian website about the general issue of human rights, including the assurance that

It is important that while we recognise the economic and political power that China has, there remains a variety of issues on which its record is, from a civilised society's point of view, unacceptable. We need to ensure that we-delicately and with the required balance-continue to raise those issues and encourage China to move.

Mr. Gray: A point that I forgot to mention in my speech is that when the Government slipped through this place-incidentally, without any formal ministerial statement-a change in policy with regard to Tibet, saying that Tibet was now understood to be a fully integrated part of the People's Republic of China, some of us felt that the Government failed to use that sufficiently well as a lever to persuade the Chinese to address some of the human rights issues in Tibet. I hope that the recent visit by the Minister, who raised 19 individual human rights issues, is a portent of the Government taking a stronger line with the Chinese Government on human rights in the future.

Jo Swinson: The hon. Gentleman makes his point very well and I hope that the Minister will respond to those comments in his reply. I hope that that visit signals a renewed commitment to finding solutions to the many ongoing problems in Tibet.

I welcome the publication of the UK national strategy on relations with China. Clearly, it is vital that we build strong ties as China grows in influence politically and economically. In recent decades, Britain's influence on the world stage has declined from what it was in the often-cited glory days. The best way for us to make our influence felt will often be to work closely with our EU partners and to be a strong voice in the EU. The Under-Secretary will be well aware of that, particularly given his new role, on which I congratulate him. Obviously, we have many points of contention with Chinese domestic
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and foreign policy, but we are increasingly learning to co-operate with each other on a wide range of issues from the economy to climate change. I look forward very much to hearing the Minister's remarks.

11.50 am

Mr. Keith Simpson (Mid-Norfolk) (Con): Mr. Taylor, we normally tend to meet at the parliamentary breakfast club, so it is a great pleasure to serve under you. I warmly congratulate my hon. Friend the Member for Cities of London and Westminster (Mr. Field) on introducing this important debate. He spoke with a great deal of knowledge and he was very thoughtful. Although he rightly concentrated on the financial and business side-not least because of the constituency that he represents-he also ranged widely.

The debate is about the implications for UK policy of relations between China and the west, but colleagues have not mentioned the fact that there is no unified western approach towards China. That is hardly surprising because, despite our close relations with some EU colleagues, some Commonwealth countries and the United States of America, there are differences. There are political differences and there are differences because we compete with each other, often over economic relations.

As the debate was proceeding, I was reminded of my time as a fresh-faced undergraduate studying history 40-odd years ago. One special subject that we covered was China and the powers, and one of the books that we were invited to read was "The Arrow War" by a young, thrusting mandarin at the Foreign Office called Douglas Hurd. Listening to our tutors, I was conscious of the fact that we often had a very different world view from our Chinese friends, given our history and culture, as well as the influence of the Chinese Communist party. In meetings that I have been lucky enough to have with her excellency the Chinese ambassador, visiting Foreign Ministers from China and visiting party officials-this is not an exact analogy, and colleagues will say that I am trying to set up China in a certain way, but that is not what I intend-China has reminded me to an extent of pre-1914 Wilhelmine Germany. The Chinese are incredibly proud of what they have achieved, they are very conscious of their history and they are very conscious and fearful of chaos and disunity. Perhaps they overcompensate for that outlook, because many of their policies are based on it. My hon. Friend the Member for North Wiltshire (Mr. Gray) talked about military deployments towards Tibet, and a lot of China's foreign and defence policy is based not only on Wilhelmine-style bravura, but on deep angst-a fear of chaos and of the fact that China could break up. That is not an excuse for us to pull our punches when we disagree with China, but it is behind a lot of the bravura.

I agree with my hon. Friend the Member for Cities of London and Westminster that the Chinese have a long-term strategic plan-that is how they think about things. The long-term strategic plan is to get themselves into a position where they have economic, military and political leverage. That does not mean to say that they want to fight large numbers of wars-I do not think that they do. However, they do want to get into the position that the old powers-Britain, France, Germany and the United States of America-were in during the 18th and 19th centuries and for most of the 20th century, and we should recognise that. In fact, we should inform the
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Chinese in our conversations with them that we know what they are about. They take a very hard-nosed and pragmatic view of finance, politics and military affairs.

I want to take up a point raised by the hon. Member for East Dunbartonshire (Jo Swinson), who speaks on behalf of the Liberal Democrats. When one talks to the Chinese, there is an innate contradiction in the fact that China is still a one-party state, although there are now elections in the Chinese Communist party, as the Chinese are fond of pointing out. As the hon. Lady said, however, China's population-particularly its younger population-is at the cutting edge of interest in technology, the internet and everything else. The Chinese authorities therefore face a major problem in squaring the circle between very limited democracy and political participation by the population, major problems with large ethnic minorities and education. The younger generation of leaders is aware of that, but they do not as yet know how to deal with the issue, and we might be able to give them some advice in our talks with them.

I forgot to congratulate the Minister on his new ministerial responsibilities. I have been a shadow Minister since 2005, and every time I blink there is a new Foreign Office Minister in front of me. Baroness Kinnock is now the new Lord Malloch-Brown, with responsibilities for Africa, but she will presumably also speak on Europe in the Lords. The Minister-like 007-will continue to deal with the rest of the world, although he will also speak more formally on Europe. However, we welcome him to the debate.

Let me touch briefly on a number of other issues. Conservative Members fully support my hon. Friend the Member for Cities of London and Westminster. We have major national strategic interests in having good, close relations with China, but we should not be afraid to tell the Chinese-forcefully at times-when we disagree with them, because the Chinese do that to us. At times, they seem to think that we should pull our punches, but there is an equivalence. We should not necessarily be rude or denigrate the Chinese, but there are times in formal discussions when they should be made aware of our views. They will perhaps realise that the more they are drawn into international organisations. That may happen as a result of China's membership of the G20 or of some of the contradictions that China will face as a member of the UN Security Council.

I want to touch briefly on four issues and four countries over which we have issues with the Chinese. The first, obviously, is Iran and nuclear proliferation. Iran is China's third-largest supplier of oil and it is crucial to China's economy. Earlier this year, China and Iran announced a $3.2 billion three-year natural gas deal. It is estimated that trade between the two countries rose from $400 million in 1994 to $29 billion in 2008. That means that relations between Iran and China are very close.

[Sir Nicholas Winterton in the Chair]

So far, the Chinese have been very reluctant to go along with any form of pressure or sanctions on Iran, but that is not to say that we do not need to continue to bring pressure and influence to bear on them. The Iranian regime might just listen-I put it no higher than that-to representations from China and Russia rather than to anything that we might say.

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