World Economy

UK Looking at Broader Picture in China

UK Looking at  Broader Picture in ChinaUK Looking at  Broader Picture in China

British Chancellor of the Exchequer George Osborne expressed his confidence in the slowing Chinese economy on Sunday, saying the country was going through a necessary transformation and was still a driver of global growth.

A string of downbeat activity data combined with wild price swings in the stock markets and a surprise currency devaluation in August have fueled fears that the Chinese economy may be slowing more sharply than was expected earlier, putting Beijing's 2015 growth target of 7% at risk, Reuters reported.

"China is going through a very necessary and challenging transformation which is essential so that China's economy can go on creating good careers and good jobs and higher living standards for your 1.3 billion people," he said at the start of a five-day trip to China.

"I think the message I would say to China is, carry on with the reform, carry on with the change you're making."

Osborne said he was "very deliberately" visiting the Shanghai Stock Exchange on Tuesday and would be talking about what had happened on the financial markets over the summer.

"Of course there have been ups and downs. We've seen that through the summer. In our estimation the spillover effects, the impact of that on other financial markets, has been relatively limited," he said, speaking to an audience of Chinese technology executives.

"And if you look at the broader picture in China, even if it's not growing at double digits the way that it once did it is still creating an economy at least the size of the United Kingdom in the next five years. So it's a massive source of global growth going forward."

Despite disagreements over human rights and the former British colony of Hong Kong, China values Britain's staunch defense of free trade and lack of obstacles to investing in Britain. Chinese President Xi Jinping visits Britain next month.

London has been especially keen to attract Chinese banks and encourage offshore trade in the yuan to bolster its position as the world's main center for foreign exchange trading.

"There is no economy in the west that is as open to Chinese investment as the United Kingdom," said Osborne, who is currently frontrunner to succeed Prime Minister David Cameron as Conservative leader ahead of the 2020 election.

"We welcome Chinese investment. There is huge amounts of Chinese investment coming into Britain at the moment. Indeed we are attracting more investment than Germany, France and Italy put together into the UK."

Best Partner in West

Britain must become China's "best partner in the West", Osborne said upon his arrival in Beijing at the head of a top-level business delegation.

The Chancellor is covering thousands of miles as he criss-crosses the country to promote UK trade not only in the Chinese capital  but also in some of the emerging cities of the interior which are expected to drive future growth.

Osborne said that China's summer of financial turbulence and the recent slowdown in its GDP growth should not divert the UK from its strategy of integrating with the world's fastest-expanding regions.

With the East Asian giant expected to be the world's largest economy by 2030, Osborne said: "There are those that say we should fear China's rise–that we should somehow guard ourselves against it. But we both reject such thinking, which would simply leave the UK slipping behind. Instead, we should embrace it."

"Simply put, we want to make the UK China's best partner in the West. We want to promote understanding between our two great cultures, which have arguably done more to shape the world than any other," said Osborne.

"Recent volatility should not and will not put us off. It should drive us forward so that we integrate China's new financial markets with our own so they are deeper and better able to absorb shocks," he said.