The Prince of the Middle Kingdom

A word from the top works wonders in China and British companies have their own royal champion

Two hapless Chinese staff at Beijing airport learnt the hard way last week not to interfere in the Duke of York's tightly run travel schedule. "Tell them it's my bloody plane," he bellowed as they tried to check the documents of his entourage before they boarded the Queen's private jet on an internal flight. The entourage swept through the terminal towards the waiting RAF jet (complete with British culinary delicacies such as custard creams and roast beef).

Prince Andrew - as special representative of the Government's trade body, UK Trade & Investment - has no time to lose: he is on a mission to promote British business. It's a far cry from his 22 years' service in the Navy, where he was a helicopter pilot in the Falklands war.

The Prince now thinks it is primarily businesses, rather than the armed services, that represent the country's interests overseas. "When I was in the Navy, I was the pointy end of the sword. We wore a glamorous uniform and we thought that if anyone needed anything doing, we could do it," he says in his Shanghai hotel room. "It's quite clear now when you look at it from the business side of the fence, these guys are the engine of prosperity. They go out to places where the armed services are not. There are businesses right there at the forefront. It's them I was supporting as a military person, not the other way around."

He met some of the UK's swashbuckling entrepreneurs in China last week, as well as the Chinese ministers and mayors who ultimately determine whether their businesses succeed or fail. Among the Brits were representatives of BLP, a Doncaster-based, family-run business making laminated wooden kitchen cabinet doors for the likes of B&Q. It has invested £35m in building a state-of-the-art factory near Suzhou, a town 90 minutes' drive west of Shanghai. BLP's chairman, Malcolm Cohen, admitted jokingly to the Prince that the adjoining offices were far more lavish than at its Doncaster headquarters.

In addition to helping the company meet demand in the UK, the factory aims to supply the domestic Chinese market, as the spending power of the middle class grows.

After a tour of the shop floor (which the Prince seems to prefer to PowerPoint presentations), his motorcade swept off to the Sheraton hotel for a meeting with Liang Baohua, the Governor of Jiangsu province, where the BLP factory is based. In China, most businesses are state-owned or state-controlled and personal relationships with politicians are far more important to business than in more open societies.

William Ehrman, the recently appointed British Ambassador to China who accompanied the Prince on the trip, explains the impact royalty can have. "The Government in China has a much bigger say over business compared to Britain," he says. "A word from the top is very important. If a member of the royal family comes here, they listen."

And so the Prince delivered his carefully crafted message on behalf of the company from Doncaster. "BLP was at great pains for me to pass on their thanks for your efforts to overcome any difficulties," he said, adding: "In the same way, if Chinese wanted to come to the UK, there would be lots of people who would go out of their way to resolve any difficulties."

BLP would never have dreamt of expanding into China until recently. Just 14 British companies were in China 20 years ago, and in Beijing, foreigners could stay in only four hotels. Today, according to the Chinese Ministry of Commerce, 4,800 UK entities are registered, and the taxi drivers know the English names of the scores of international hotel chains in the city.

British businesses - and the Government - also seem to have overcome the tensions generated before the handover of Hong Kong in 1997. Brian Outlaw, a director at the China-Britain Business Council who has done business in the country for two decades, says: "Dealing with Hong Kong made things difficult for a while. Buying British was not exactly flavour of the month back then. But if you have gone through a difficult period and still like each other, it can only be a good thing."

Unexpectedly, State Councillor Tang Jiaxun, the head of foreign affairs for Jiangsu, praised the British Government's recent White Paper on Hong Kong as "positive and relatively objective", when only a few years ago the former colony's status was a thorny issue between the two countries. "I recall a remark made by Blair in your country when Hong Kong was returned," he told the Prince. "He said Hong Kong should be a bridge between China and UK relations."

The advantage of having Prince Andrew lobbying for Britain is that, unlike ministers, he can go beyond the boundaries of a ministerial brief, such as trade or foreign policy, Ambassador Ehrman says: "The Prince can press all of these buttons."

Measuring China's stuttering progress on reform can be surreal. One media executive, part of the burgeoning young, educated and fluently English-speaking Chinese elite, told the Prince that his television company still has to contact government censors to check the content of its programmes. One video package featuring youths with multicoloured hair styles was considered so subversive that the censors told him no youth could be featured with more than two hair colours. But he admitted that it would have been unthinkable to talk so freely about issues such as censorship with a senior foreign visitor 10 years ago. Yet there was still nervous laughter when the Prince teased his lunch guests about the important minister he would be meeting that afternoon, and whether he would pass on their complaints.

Foreign businessmen share the frustrations of their Chinese counterparts at the inconsistency of reform. Infringement of intellectual property rights is endemic in China, where manufacturers brazenly copy the design and branding of Western goods, despite a supposed clamp- down by the authorities. One Western lobbyist for a well-known European firm admitted sheepishly that he buys pirated DVDs from his local shop in Shanghai because cinemas are only allowed to screen 20 approved foreign films a year.

With the Chinese government's adoption of free market speak, it is easy to forget the huge cultural differences between China and the West. In his meeting with Wang Qishan, the Mayor of Beijing, the Prince began by congratulating him on the city's successful bid for the 2008 Olympics, and then asked if Britain could offer any help. The Mayor responded with a list of challenges facing the rapidly growing capital. Parking was a problem in the older quarters where streets are narrow and easily blocked, he said. Bird flu was also a problem, though the authorities had stopped it spreading by banning pigeon-flying competitions. Prince Andrew nodded politely. "You know when it's right to push and when to back off," he said later.

The time to push came with the Minister of Commerce, Bo Xilai, over a $3bn (£1.7bn) order for new engines for China's six state-owned airlines. Rolls-Royce is competing against America's General Electric for the contracts, which could be signed at the end of the month.

And while the Prince thanked the minister for letting Lloyd's of London apply for a licence to operate in China, he added that he hoped the authorities would also allow other UK insurers, such as Royal & SunAlliance, to expand into the country.

He also asked why Chinese companies were not allowed to join the British Chambers of Commerce in China, which the minister did not appear to be aware of. He said he would look into it, and the assistants flanking him nodded vigorously.

Prince Andrew has a lot of competition: he is one of hundreds of foreign dignitaries who go to China to strengthen trade ties. One Chinese diplomat, based in Xi'ian city, explains that last year alone he received 11 presidential or prime ministerial visits and around 70 ministerial ones. Asked how useful they are in forging relationships, he says: "Often they are not that useful because they are too short. Maybe in the future something will develop from a meeting, but you don't know."

An element of oneupmanship influences the itineraries of visiting dignitaries. Laurence Barron, the president of Airbus China, says the Prince was the first foreign luminary to visit its manufacturing joint venture with China's XAC, just outside Xi'ian, which was snubbed by French President Jacques Chirac when he came to China in October. Similarly, a former Canadian diplomat recalls that in 1998, Jean Chrétien, then Canada's Prime Minister, wanted to go beyond Xi'ian because Mr Chirac had already visited the town.

The Prince is realistic about the extent of his influence. "My role is to support, move, help, encourage and make a suggestion to another businessman or leader. It's marketing the UK." He sees himself as just one member of "Team UK", which includes the Prime Minister and other ministers and government agencies, each sent to countries were they can be most effective. "It's about being part of, for want of a better expression, the golf bag. Which club do you want to get out to play this particular shot?"

He does not have a commercial background, and might not have been the natural choice of business to head up the delegation. But the Prince's Chinese hosts seem impressed enough. When he first visited China two years ago and met State Councillor Tang Jiaxun, he was received in the general hall of the People's Palace in Beijing - an ante room where all dignitaries are received. Last week, he was taken to the "inner sanctum", the councillor's private room, for the meeting.

The Prince has not lost his boyish sense of humour, which has more hits than misses. In a front-page interview with the China Business News, the (translated) report starts: "After sitting on the sofa we gave him a copy of our current issue of China Business News. He showed interest but said, 'I'm sorry, I cannot read Chinese.' Then he deliberately turned the newspaper upside down and said, 'Is this the way to read it?' The atmosphere suddenly became lively and the interview started."