Wooing the Chinese is the easy bit. The challenge is to get the British to invest

On this occasion, there was a certain irony in Boris and George’s appeals for the Chinese to spend their money in Britain

London Mayor Boris Johnson faces the Shanghai media as he arrives in Shanghai on day four of his trade mission to China at Hotel Indigo Shanghai on the Bund on October 16, 2013 in Shanghai, China. (Photo by ChinaFotoPress/ChinaFotoPress via Getty Images) (Getty Images)

An all-too familiar ritual has played out this week. We’ve been treated to the sight of senior politicians heading to a faraway land, hand-picked captains of industry in tow.

Once there – this time it was China, before that India – a well-rehearsed choreography kicks in. There are clunky jokes about local customs and the language, and photo opportunities galore, as the politicians lark about for the travelling and local media.

There’s a press conference or two, some speeches, banquets, and plenty of handshakes and smiles. Deals are unveiled, despite the fact that, as they like to say on Blue Peter, they were clearly prepared earlier. Oh, and we and the Chinese must be told, repeatedly, that Britain is “open for business”.

The Chinese don’t need Boris Johnson to tell them that London is a world centre for banking or George Osborne to explain we’re handily located between Asia and North America. It’s a fair bet that all the accompanying business big-wigs had extensive dealings with China and maintained offices or representatives there. Likewise, the large Chinese firms they met almost certainly had a presence here.

And to put the whole thing in perspective: no sooner does our lot pack up and jet home than a delegation from another country arrives to go through a similar sales pitch. Next week, on Monday, a party arrives in China from Australia on what’s being billed as a “Super Trade Mission”.

It’s possible to argue that if we didn’t show our faces at all we would suffer, but is that really true?

On this occasion, there was a certain irony in Boris and George’s appeals for the Chinese to spend their money in Britain. Currently, our largest companies are sitting on more cash in their bank accounts than at any time in our history. According to a recent study from Capita Asset Services, the total gross cash balances of the FTSE 100 amounts to a whopping £166bn – up from £123.8bn in pre-crash 2008.

While Osborne yesterday heaped praise on the Chinese for agreeing to invest in new UK nuclear power plants, he cannot get his own people to do the same. The first major commitment is likely to be a new £14bn plant at the Hinkley C site. Leading the project will be EDF, the French energy firm, with the Chinese set to be co-investors.

As well as France and China, the government is looking to South Korea and Japan to back a new generation of UK nuclear power stations.

The Brits, meanwhile, prefer to keep their money in the bank. It’s not just nuclear energy: our biggest firms have stopped investing in Britain. When did you last turn on the radio and hear that a British company was spending heavily on a new project in this country, providing lots of new jobs? Such announcements used to be frequent and across all sectors. Now, they are rare and tend to concern a development of a shopping mall (which does not create employment but takes it away from existing stores) or a giant call centre.

They’re not dipping into their pockets, neither are they leveraging – using the funds they already possess to borrow in order to invest. They’re worried about the fragility of the economy, that the Eurozone crisis has not been resolved and the Middle East remains a powder keg. Fortunately, fears of a US default have receded.

They’re also afraid of taking a short-term risk. It’s much safer to stash the cash in the bank or even return it to grateful shareholders if you’re a chief executive than plunge down some expansionary route, placing orders for plant and equipment, and hurt the annual bonus.

This is a serious concern for the government, one laid bare in a new book by Andrew Smithers, The Road to Recovery: How and Why Economic Policy Must Change. The City listens to Smithers, one of its foremost analysts, even though it does not always like what he says. He blames the way management remuneration packages are tied to share-price performance as one of the main reasons behind the financial crash and now, one of the key factors in our slow return to economic health.

Put simply, there is nothing in it for UK corporate executives to gamble. If they announce a major acquisition or investment programme, their share price will fall – and hurt the yearly hand-outs. By not adding and developing, they might be fuelling problems in the long-term but they would rather take that chance than jeopardise their short-term bonuses.

Instead of hurtling off across the globe, Osborne and co might be better advised to stay at home and attempt to sort out executive pay structures, and persuade companies to part with their money. That, though, could take forever and may prove impossible.

It makes more sense to turn to those with money to burn, who are not restricted by short-termism, who play a determinedly long game and don’t have share prices or bonus payments to fret about. The Chinese fit that bill perfectly.

The fact is, as the Government knows, given the caution of our companies, we would be lost without them – and the wealthy Gulf Arabs, rich Indian entrepreneurs and all the other targets of our foreign junkets, sorry essential begging missions.