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Cameron's Veto - just how might it look from Beijing ?

By Mike Loftus on Dec 13, 11 02:53 PM in


The events in Brussels last week with the British 'veto' exercised have had their well choreographed consequences among our own political classes - the spirited bulldog barking gleefully in one corner while toys are hurled liberally from a pram in another. It's interesting to speculate a little on how this is seen on a wider world stage and I have drawn on recent exposure to Chinese perceptions to draw some tentative conclusions.


As it happens I spent a couple of hours only last week with a group of Chinese officials who were gamely trying to come to terms with the intricacies of patent law and protection of intellectual property protection ( I don't quite know how I get these gigs - a mixture of charm, wit and my striking good looks I suspect). Among the more interesting aspects of a lively discussion was the clear assumption of Chinese colleagues, that the EU was already precisely the sort of prescriptive supra-national governmental body that the Euro-sceptics here so much abhor. Specifically, the notion that ( as things currently stand) protection of IP through a patent needs to be sought from each of the member states of the EU left them amazed.

This was not group of foreign or trade policy boffins - rather a delegation of middle ranking officials tasked with stimulating innovation and enterprise in their home province. Their working assumption about the EU would probably be shared by their counterparts in other areas if government and business - ie as a body which supervises and directs the business affairs of Europe much as the Beijing Government does across China.

Of course the UK ( and the Irish Republic) already stand clearly apart from the rest of our European partners in the eyes of prospective Chinese visitors - whether tourists or business people. While the rest of the EU looks to operates a common visa policy under the Schengen agreement, visitors to the UK need to make an (irksome ?) separate application to come here.

Its rather more than a moot point as to how a UK standing alone and with its relationship with the wider EU even more uncertain would be regarded in China. There is considerable value placed in China on matters of scale and, particularly, stability - they are essential elements of the national narrative ( or myth) through which China explains itself to itself and China likes to see reflected elsewhere.

The European Union collectively is now China's biggest trade partner - but significantly within Europe it is Germany that leads the pack with some 130 billion euros of business between the two countries - projected to grow by over 50% in the next five years. In fact Germany which accounts for about 20% of the overall EU economy already has more than 40% of the value of trade with China. And while Germany has and retains its own anxiety about protecting intellectual property in this process this hasn't inhibited a massive mutual engagement.

Given this its hardly surprising that on a recent visit to China I was struck by the way in which my Chinese hosts politely but firmly emphasised to me just how thoroughly - and for how long - Germany and German business has been cultivating appropriate Chinese connections.

Volkswagen perhaps provides the exemplar case study in this regard. They began their operations in China well over 30 years ago and formed their first joint venture - with SAIC - in 1984 entering then into a 25 year contract. This was followed by a second deal with FAW in 1991. As a result of this long game, VW is the largest foreign car manufacturer in China with some 1.9 million vehicles sold in 2010.

Although we properly preened ourselves at Premier Wen's visit to Birmingham earlier this year, pride of place in his brief European excursion - his last port of call - was to Chancellor Merkel in Berlin. ( And in an era where 'soft' power is seen a crucial lever in international relations, bear in mind that it's the upholstery of the FAW Audi ( now being challenged by the Brilliance BMW) that Chinese government officials recline into as they make their progress around the country).

China's most senior economic policy makers are in closed session this week in Beijing seeking to engineer a process that can continue downward pressure on inflation there without switching off growth. Jim O Neil of Goldman Sachs - the man who first coined the 'BRIC' acronym - views their efforts as vital to the international economy in the immediate and longer term.

If you are concerned that the UK is already a little too disconnected from the Chinese economic engine, further decoupling into the slower lane of a two speed Europe - further removed possibly from China's clear sense of where the real power in Europe lies - might not be the best bet ?

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