00:00Well, I'm delighted to say I'm joined now by Stephen Lynch, Director of International Trade at the British Chambers of Commerce.
00:06Stephen, you're very welcome here. Thank you so much for joining us.
00:08So, a really landmark visit by the British Prime Minister to China.
00:12The view in China seems to be that his visit was an act of economic pragmatism, business taking precedence over politics.
00:20I mean, what do you think? Has the Prime Minister struck the right kind of tone for the British business community?
00:26I think it has been a success in regards to the objectives that he set out with.
00:30I think it could be a historic visit if we get the next part of this right.
00:34I think the priorities of this visit have been engagement and re-engagement at the highest level of diplomacy,
00:40which seem to have gone very well, a two-hour meeting almost with President, with Keir Starmer and Xi Jinping.
00:48And then the second part of this, which is not landmark, I wouldn't say, but is around that economic security, the trade and investment deals.
00:54So, for the business community, this has been about stabilisation and giving clarity to what comes next.
01:00And so, we've had secured market access, lower tariffs, investment deals.
01:05What about this visa-free travel arrangement with China?
01:09Is that the biggest coup in some ways, would you say?
01:11So, visa-free travel for Britons to visit China for under 30 days, that will allow holidays and business trips.
01:17Is that significant?
01:18So, I'm going to use the Chinese proverb here.
01:20The best time to plant a tree was 20 years ago.
01:22The next best time is today.
01:24So, yes, this is really important.
01:26And we really welcome the fact that we have visa-free travel.
01:29It would have been nicer if it came a few years ago.
01:31But we've got it.
01:32And that's really important, because that will reduce a lot of the practical frictions and logistics.
01:37So, it will allow more businesses to go in and out of the country, more students, more tourism.
01:41And that's really, really important.
01:42And that will genuinely help the people-to-people relationship, which is the bedrock, the foundation of this relationship.
01:48Well, absolutely.
01:49And let's talk about investments.
01:51Not a huge bundle of investments worth billions of dollars by Chinese or British firms.
01:56Kirstoma, though, of course, securing this Scotch-Whiskey tariff cut with China worth more than $300 million.
02:01I mean, good news, but it's not really a big deal in the big scheme of things, is it?
02:05Well, whiskey's symbolic, right?
02:07Everyone can hold a bottle of whiskey.
02:08They know exactly what it is.
02:09So, that is why this has been put front and centre.
02:12The other aspect of that is it's global.
02:14And the reason it's global is because 90% of whiskey is exported.
02:17So, any little kind of tariff has a big impact.
02:21It was previously 5%.
02:22It went up to 10%.
02:24It's now back down to 5%.
02:25That's really welcomed by the industry.
02:28I think, again, I go back to the priority for this visit was engagement, setting that stable relationship for a lot more trade and investment to flow.
02:36And it's all built upon trust.
02:38And that really is the key to this visit.
02:40We heard AstraZeneca is set to invest $15 billion in China.
02:43Do you think UK businesses are likely to feel much more confident investing in China following this visit?
02:51I think yes.
02:52I think the major businesses have been in market 50, 60 years.
02:56AstraZeneca, a key player in that.
02:58I think where this visit needs to translate to is these small, medium businesses that actually do want to engage with China.
03:05Sort of the knowledge is not there.
03:07That's the challenge.
03:08It's not the willing.
03:09It's the knowledge.
03:09And so I think this sets a layer of stability, a layer of credibility and clarity that these are the areas that we can engage and these are sort of the guardrails that actually we can't.
03:19And I think that helps the relationship.
03:21So the Prime Minister, for the first time, has been talking about trade-offs, the areas we can work together and the areas where it's slightly risky.
03:28So I do really welcome this layer of credibility and clarity for the business community.
03:34Credibility, clarity, absolutely the center of this.
03:37Let's talk about services, UK services.
03:40They're an absolutely massive export for the British economy, aren't they?
03:44Worth something like $13 billion.
03:48What would you say about this feasibility study that's been announced?
03:52I mean, could that really open up this as a major new market in China or how important is that?
03:57So we're a serviced superpower.
04:00You know, that's 80% of our economy.
04:02You know, our financial professional services, the City of London, everything we do around services is our opportunity for the next 15, 20 years moving forward.
04:10That's the exact inverse in regards to our relationship with China.
04:13It's 20% of our bilateral relationship.
04:15So the opportunity is genuinely enormous if we can get this right.
04:19So feasibility study is really welcomed.
04:22If that means we're sort of moving closest around capital markets and Chinese businesses being allowed to list on the London Stock Exchange, that's actually genuinely very important.
04:31What the clarity is, what this means, you know, the details have to be played out.
04:35But the opportunity is there.
04:37And then the opportunity for the UK and financial professional services is also support Chinese businesses going outbound into other third markets.
04:45So, again, I do welcome this.
04:46We'll see the details in the coming months.
04:49Well, do come back and talk to us about those details as we get them.
04:52Really great to have your input today.
04:53Thank you so much, Stephen.
04:55Stephen Lynch, Director of International Trade at the British Chambers of Commerce.
04:59Many thanks.
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