As China continues to open up on its own terms, the Western world must recognize the opportunities this will bring, a senior banker told a China business briefing.
In a keynote speech delivered on April 25 at Lancaster University, in northern England, Tim Skeet, member of the Executive Management Committee and Chief Institutional Relationship Officer, Bank of China Ltd London Branch, focused on China's opening-up since the country optimized its COVID-19 policies.
Skeet highlighted China's robust economic strength, the diverse development opportunities on offer, and emphasized the importance of human interaction in strengthening mutual understanding and business.
Despite the rather depressed global economic backdrop, China has set its annual GDP growth target at around 5 percent for 2023. Over the next three years, China is expected to add a further 71 million middle and high-income households, according to Skeet. "No other economy has consumers with such high spending power and desire for new products," he said.
China's ongoing opening-up is also reflected in the growing influence of the country's currency, renmenbi (RMB), he said.
Data from Swift, a global provider of financial messaging services, shows that the RMB's share by value of the market increased from less than 2 percent in February 2022 to 4.5 percent a year later.
In addition, the growth of China's digital fiat currency, the e-CNY or digital RMB, is indicative of China's opening-up and liberalization of its financial markets, strengthening the connectivity between China and international market infrastructure. "This is designed to facilitate interoperability, clearing settlement, and maximize investment opportunities," Skeet said.
However, in terms of geopolitical landscape, some challenges still exist, including how the West responds to China's opening-up. Despite voices that promote decoupling, Skeet said: "We have heard different things being said by different Western leaders".
For example, Britain's Foreign Secretary James Cleverly said recently that the United Kingdom should "engage robustly and also constructively with China". He argued that declaring some kind of new Cold War and isolating China would be a betrayal of British national interests and a willful misunderstanding of the modern world.
On his recent visit to Beijing, France's President Emmanuel Macron stated it would be a "disastrous error" to decouple and separate from China. European Commission President Ursula von der Leyen also expressed doubts about the viability and desirability of any "decoupling" strategy. During her visit to China in April, she called for dialogue in European Union-China relations to make progress and produce tangible results.
Similarly, when Germany's Chancellor Olaf Scholz made an official visit to China last November, he expressed firm support for trade liberalization and economic globalization. He also opposed decoupling and called for a multi-polar world, where the role and influence of emerging countries can be taken seriously.
"The challenge is not how and to what extent China opens up, as we discussed today in the theme of our meeting, but how and to what extent we in the West need to respond," Skeet said, "we need to better understand China, in order to better engage."
"That's what we need to be doing: looking for common interests, finding out what cultures (we) have in common, not what it makes us different."
Organized by Lancaster University's Confucius Institute, the China Business Briefing attracted professors and business experts from both China and the UK. The event delved into the insights, opportunities, and challenges of business cooperation between the two countries in the post-pandemic era.
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