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International Trade: Open up!
- Published:
- 5 February, 2010
This week, I have attended several meetings in listening mode: hearing from those wiser and longer seeped in China; gleaning some insights; and wondering what it means for me and the task at hand.
My task: I’ve come out to China to work on market access issues – how China opens its market to foreign enterprises and continues to reform its business environment, so that businesses from the UK (and further afield) can operate and trade.
China’s current “five-year” plan describes its commitment to “opening-up,” seeing it as “win-win.” I’m not an economist, but the principle of open markets seems on paper to be exactly that – win-win. For a business, it creates new markets and new potential to boost the bottom-line.
It increases competition and therefore innovation. It expands its customer base, and gives consumers greater choice. It raises the bar for companies going to a market and for indigenous companies challenged by new companies coming in.
A key question for my task is what this all means in China in 2010? This week the commentariat seems concerned, amongst other things, about a rise in trade protectionism. Some of the language is pretty accusatory and heated. The challenge, for policy makers and leaders alike, is not to allow the rhetoric to snowball into real-world impact.
Part of the problem comes when the “creative destruction” of market liberalisation meets economic nationalism. Most economies around the world have taken a beating on the employment-front. In China, leaders and policy makers are trying to keep what I saw described as a “half-developed” economy of 1.3 billion people on the road of growth. It must seem pretty tempting to look for the route that gets you the jobs you need now, and to fight for comparative advantage for the future.
There are real gains for all countries to be made from openness, not just in terms of trade, but also development, if done sensitively, and done right. And, hopefully, for UK companies, continued openness will be new business, and new growth. We need to press the case.
Duncan Buchanan is commercial attaché at UKTI Beijing
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