There are no longer 9 million bicycles in Beijing
As usual, the recent Jersey Finance visit to Hong Kong and China was an organised frenzy of meetings, events, breakneck travel and careful diplomacy. To summarise all of my impressions, of China in particular, would take more than a quick blog, but if there is one lasting moment that sums up the entire trip for me, it was not what I saw, but rather what I didn’t see - there are no longer 9 million bicycles in Beijing.25 July 2011
As usual, the recent Jersey Finance visit to Hong Kong and China was an organised frenzy of meetings, events, breakneck travel and careful diplomacy. To summarise all of my impressions, of China in particular, would take more than a quick blog, but if there is one lasting moment that sums up the entire trip for me, it was not what I saw, but rather what I didn’t see – there are no longer 9 million bicycles in Beijing.
Just 5 years ago, one of my most vivid memories of China, was sitting in a taxi at a traffic lights, while 100’s of cyclists jostled for position on the road. In a short few years, they are entirely gone, replaced in the main with the best cars that Europe can offer – there may well now be 9 million Audis in Beijing, and another few million BMW to boot.
Well ahead of the original Goldman Sachs BRIC predictions, China has its sights set firmly on becoming the world’s largest economy between 2020 and 2030. The Chinese equivalent of our industrial revolution is happening in decades instead of centuries. Economic progress of China is a well-accepted phenomenon now, accelerated by a whole new generation of consumers; the 300 million people (that’s more than the entire population of the US), who have been lifted out of rural poverty into an urban lifestyle, now have money to spend – and they want to buy the things we have.
So what does Jersey have that China wants to buy? Well they want sound governance and regulation, access to skilled non-executives directors, financial expertise, and tax integrity that won’t be challenged, because there is genuine substance. In contrast to some other, hotter, jurisdictions, Jersey is now recognised as a sensible, safe and high quality option. Additionally, as China becomes more integrated in international markets, things like cross border flows, integrity and good conduct are being greatly emphasised, making Jersey an ideal fit.
In fact, several Chinese cities, including Tianjin where we were welcomed with exceptional hospitality, have now been given a remit by the government to develop themselves as International Finance Centres, and there is a keen desire to learn best practice from, and work with, Jersey. Jersey’s modern finance industry has now been in existence for 50 years, thriving on a formula of deep expertise, reliable legislation and the highest regulatory standards. For Chinese cities desiring to build a sustainable future as a finance centre, I believe that they must employ the same formula, committing to skill development, a strong judicial framework, and signing up to things like Basel and IOSCO. While tax competition will always be part of the mix, it is relatively easy to copy, making it more of a ‘ticket to the game’ as opposed to the deciding factor as to whether or not an IFC becomes market leading.
This desire to work with Jersey was even more apparent in Hong Kong, and since we began market development in that region in 2009, I am pleased to say that many Jersey firms have decided to set up there; HSBC alone now has 30 people on the ground just promoting Jersey services and products. The ability for Jersey companies to list on the Hong Kong stock exchange has undoubtedly helped Jersey to gain recognition and credibility in that market. Three Jersey companies are now listed there, (Rusal, West China Cement, and Glencore,) and this has put Jersey on the map in Asia in a powerful way. I believe that there is every opportunity that Jersey will also become a partner for Chinese companies wishing to list in Europe, and that two-way flow of business will develop.
Apart from the 57 million Chinese tourists, nothing could be more symbolic or evident of this opportunity for two-way relations, than the recent visit of Premier Wen Jiabao to the United Kingdom, which coincided with our return from China. I was fortunate enough to be invited to a presentation by the Royal Society where His Excellency, Mr Wen Jiabao, spoke and was awarded the King Charles II medal.
Mr Wen Jiabao spoke about the Chinese views on human rights, specifically the right to the opportunity to have employment, education and housing. It reminded me of rhetoric from days gone by about the American Dream, but based in very different roots – freedom to live being the focus, rather than freedom of speech. When I consider our multi-party/person politics, in the UK and Jersey, where there are no longer clear “winners”, and decisions are often paralysed by endless debate and lack of agreement, I could not help but wonder what would happen if we all spoke a bit less righteously, and got on with things. As Mr Wen Jiabao himself pointed out, there is more than one way to look at things; nothing is for certain, the times of China’s exile during the Cultural Revolution are over.
It was very clear while we were in China that more than just the bicycles had changed – even the language had moved on, to be more inclusive, more international and more outward focused. The government attitude seemed to have become increasingly transparent, with more positions voted for within the official infrastructure. They also seem unusually and admirably able to learn from the mistakes of others, (namely the US), and while progress may be the priority, they are now also investing vast amounts of resource into developing clean energy technologies. The focus is always on incremental progress; it is said that a Chinese person feels they’ve discharged their debt to society if they have been a part of handing the baton of responsibility on over a 500-year span. As Jersey continues to work more closely with China, it is worth us remembering, while we may be driven by transactions, they are driven by relationships, and we must do everything we can to ensure our future relationship with China is positive, strong and mutually beneficial, and that we take the time to understand their perspective on the world.