China takes a dim view of British exports
Thursday 23 May 1996
As the Deputy Prime Minister, Michael Heseltine, left Peking for Shanghai yesterday, leading more than 270 British businessmen on the next stage of his trade mission, the consciousness of the ordinary Chinese shopper about British products and companies in China left some room for improvement. All the Chinese could name Wall's, whose Cornettos have been selling well for two years. But everyone thought the company was American.
A barber shop owner named Rothmans cigarettes, whisky and Rolls Royce. He added: "On television, in the British films, I saw that the British chinaware is quite beautiful. But there are not many British products in the Chinese market. Maybe that is because British businessmen are not interested in the Chinese market, or they are not as competitive as the Japanese, American or French businessmen."
Mr Heseltine, wrapping up the first hectic leg of his mission, would disagree. As he has repeatedly stressed this week, Britain remains by far the biggest European direct investor in China with cumulative investment totalling $2.2bn (pounds 1.4bn) by the end of last year. Less impressive is the trade performance; in 1995, Britain's trade deficit with China widened as UK exports slipped 2.4 per cent to pounds 824m.
The Chinese market presented "incredible potential" for British businesses, and British companies were well-poised to take a fair share of that business, Mr Heseltine said yesterday, describing China as "an immensely sophisticated country in the development of its policies". The only thing missing in the presentation was anything that resembled a new big contract. The largest signing so far during the mission has been a $80m pesticides joint venture by Zeneca.
Overall, however, Sino-British relations appeared this week to pass through a staging post. "Diplomatic relations between China and Britain have recovered from disputes over Hong Kong's future," pronounced the official China Daily. And the Chinese Prime Minister, Li Peng, who met Mr Heseltine on Tuesday, said bilateral relations were expected to "take a big step forward", especially business relations.
The question yesterday was, at what price? Mr Heseltine was on the defensive about why such a senior politician was leading a trade mission, and whether it would not be better for him to concentrate on politics, given the seemingly intractable difficulties in safeguarding future political freedoms in Hong Kong.
"The idea that you can stand back as a minister in a government and not support your companies would display a degree of naivete which would be absent in every other country in the world," he said. "The dialogue which takes place here about major contracts takes place with the government of China. The whole machinery about approvals of decision-making is a political decision-making process."
Nevertheless, subjects such as human rights and the disagreements over Hong Kong have so far been given a much lower billing than business, and the Deputy Prime Minister admitted "the major focus has been on commercial matters".
There was a time when any senior foreign government official visiting China would make a point of stressing how the question of human rights had been raised with Chinese leaders. Yesterday, Mr Heseltine did not even mention raising human rights issues with Mr Li, despite the violent crackdown on photographs of the Dalai Lama in Tibet. Asked earlier in the week if he would raise Tibet, he said: "I have private conversations with the leaders of the Chinese government, and I will maintain that confidentiality." British officials were not even allowed to confirm whether or not human rights had been raised in any form with Mr Li.
Mr Heseltine was similarly unforthcoming on discussions about Hong Kong and China's plans to scrap the elected Legislative Council (Legco) the moment sovereignty reverts to China on 1 July next year. "We have to work to deal with that issue," he said, asked about the unelected provisional Legco which Peking will install instead.
There was little talk of specifics. "Both sides have agreed on the need to strengthen our co-operation over Hong Kong in the remaining year before the transfer of sovereignty to China," he insisted.
Mr Heseltine will meet President Jiang Zemin in Zhuhai at the end of the week, and have a final stop in Hong Kong where 6 million people will be eager to hear if he has wrung any concessions out of the mainland government about their political future.
England in Peking, page 32
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