Former British chancellor says it is essential to pursue closer partnership with emerging giant

George Osborne, one of the principal architects of the "golden era" of relations between the UK and China, insists it is important for the West in general to build closer ties with the world's second-largest economy.

The former chancellor of the exchequer, who left office in July after Theresa May became prime minister, believes there is much to be gained from a closer partnership.

"Sometimes in the discussion about China in the West, people focus on the areas where we disagree and ignore the potential areas of cooperation. And I'm just saying, get them both in balance and see the positives as well as the negatives," he says.

George Osborne, former Chancellor of the Exchequer, says it is important that London's center position for the yuan's internationalization is not undermined by Brexit. Nick J.B. Moore / For China Daily

Osborne, 45, who was speaking in his office in Portcullis House in Westminster with a panoramic view of the Thames in what was only his second interview since leaving office, argues that the emergence of China as an economic superpower makes it impossible to ignore.

"It is a country that is a very big part of our world and will go on being so forever. And so we have essentially a choice in the West. Do we ignore that? Well, you can't ignore China. Do you confront China? Or do you work with China to make for a more stable world order and a more prosperous global economy?"

The new golden era of UK and China relations seemed endangered over the summer when May called for a review of the proposed Hinkley Point C nuclear power station in which there was to be substantial Chinese investment.

It was one of the key investments announced during President Xi Jinping's state visit to the UK in October last year.

May's chief of staff Nick Timothy had raised security concerns about Chinese involvement in nuclear projects. It has now, however, been given the go-ahead.

"I thought it was extremely encouraging that, after looking at the facts and the details of the Hinkley Point nuclear power decision, the current government decided to proceed with that deal that I'd worked on with China and with France, as a great example of how China and the West can work together," he says.

"It is not bad to judge a government by its actions, and this new Conservative government has basically come up with the same decision that we came to in government just a few months ago."

A current major concern is whether the UK's decision to leave the European Union will affect future Chinese investment in the country.

Almost one-third of Chinese investment into the EU was in the UK in 2014. In a recent survey by EY Global Capital Barometer, 53 percent of Chinese respondents were less confident about investing in the UK. "We now need to do everything we can to avoid some of the dangers and difficulties that Brexit might offer up to our country. And one of those things is making sure it doesn't deter foreign investment, including from China," Osborne says.

"So I think we need to redouble our efforts to attract that investment, make it clear to Chinese businesses that their investment is welcome here."

Osborne says he will argue for as close a relationship as possible for the UK with Europe while being outside the European Union.

"I strongly believe it is in Britain's interest, Europe's interest and, indeed, more broadly in the interest of the world economy, that our relationship with Europe is as strong as it can be outside of the EU. Exactly what form that takes we are going to see now over the coming period and I'll reserve judgment until I see what the options are," he says.

"But I will be advocating that close economic relationship because I think it is good for the British economy. I think it is good for Britain as a place to invest and a jumping off point for Europe and I think it is good for the European economy as well because Britain is an important trading partner for many European countries."

Osborne has had a longstanding relationship with China, having first visited as a backpacker in the mid-1990s.

He made a number of high-profile visits as chancellor, including the one in September last year when he made a speech to the Shanghai Stock Exchange in which he called for the creation of a "golden decade" for UK-China relations. That acted as a curtain raiser for President Xi's visit to the UK a month later.

"I have gone from traveling around China with a backpack and staying in a hostel to dining at the president's table," he laughs.

His connection with China now extends to his 13-year-old daughter learning Mandarin.

"She comes home (from school) and studies Mandarin characters, like I did French. Frankly, I think that gives her a greater understanding of the world she is growing up in. I want more British children to learn the Chinese language at school."

Osborne put great effort into developing London as the most important global center for trading the Chinese yuan. For this, he worked with his then-opposite number Wang Qishan, who is now Secretary of the Central Commission for Discipline Inspection, and Ma Kai, the current vice-premier.

"We really worked together to bring that business to the UK, to create clearing systems that would allow London to be a place where the Chinese currency could be better internationalized," he says.

"Now I would say that has been a huge success. Last year London overtook all other centers outside of China, including Singapore, for renminbi trading."

Osborne says it is important that this is not undermined by Brexit or an inability to pass financial services into the EU.

"Certainly, as we look at our negotiations for leaving the EU, one of the issues we should be focused on is making sure that Britain has as close as possible economic links with Europe, and that includes financial services," he says.

Osborne also wants British companies to do business in more remote areas of China. Last year he was the first UK minister to visit the Xinjiang Uygur autonomous region.

"It was a deliberate decision of mine to go there. I wanted first of all to explain to people that China is a very large country and that it is not all about Beijing and Shanghai. And, secondly, there is this very interesting Chinese ambition, the Belt and Road Initiative, and western China and Central Asia are a very important part of that," he says.

Osborne was also one of the first in the West to offer high-profile support for China's Asia Infrastructure Investment Bank, contrasting with the US, which failed to back it.

"I thought Britain could stay on the sidelines, or we can get involved and shape the organization," he says.

"I suspect the American response was driven primarily by the fact the administration was not going to be able to get any ratification through Congress - that is, it was realpolitik."

He says there is a danger of institutions like the International Monetary Fund and the World Bank not fully representing big emerging economies like China.

"Now, 70 years on from the creation of most of them, we can either see them become irrelevant to these big emerging economies, like China, India and Brazil, or we can say they are relevant to you. Although you were not fundamental to their creation, you can be fundamental to their future."

Osborne, who is firmly committed to remaining in Parliament - unlike former prime minister David Cameron, who resigned his seat - says he wants to play an active role in the Brexit debate.

The British people decided to leave the EU, but they weren't asked to decide what new relationship with Europe they wanted to have, he says.

"I suspect that issue will be an absolutely dominant one in Parliament and you can't be a member of Parliament without being involved in it."

He also remains firmly committed to his personal mission of developing closer links between the UK and China

"I am going to continue arguing for that strong China relationship and economic partnership for that golden era, and making sure that on a fairly regular basis I am getting myself to China to see what is happening in that remarkable country."

andrewmoody@chinadaily.com.cn

(China Daily European Weekly 11/04/2016 page32)