International perspective: April

The view from China

Net-zero ambitions

Yesterday marked World Earth Day and there were some encouraging outcomes from day one of the US hosted virtual Climate Change Summit. China has pledged to ‘phase down’ (not, unfortunately, phase out!) coal between 2025-2030 whilst the US has committed to reducing its annual emissions by 1.5bn to 2.4bn tons by 2030. And both countries released a joint-statement acknowledging the threat of climate change.

To have the world’s two largest emitters in conversation on this global issue has to be a significant step forward for the rest of the world given the geopolitical tensions that currently blight the US-China relationship.

Additional pledges by South Korea to phase out overseas coal project finance and Japan to reduce its emissions by 46% relative to 2013 levels by 2030 were also welcome announcements. And India’s commitment to build 450 gigawatts of renewable energy by the decade’s end has to be a step in the right direction for South Asia.

The automobile industry

April saw the annual Auto Expo take place in Shanghai (21-28 April) and for insights into CBI members JLR, BMW and Toyota and the latest e-vehicle tech and trends please visit here.

Interestingly China based Guangzhou Auto Corporation (GAC) has announced that its plans for opening a new plant in Yangon, Myanmar-Burma, remain ‘on track’ despite the complete collapse of business and society in the country over the past two months.

Banking, finance and the economy

We have also noted that US banking giant Wells Fargo has been reassessing its Asia Pacific strategy with Singapore emerging as a strong option to Hong Kong as the region’s leading financial hub.

China’s latest GDP figures for Q1 2021 were also released this month and whilst output may have been up by a record breaking 18.3% the economy only grew by 0.6%.

Underlying issues such as financial risk, exemplified by the collapse of Huarong Investments in 2018, continue to provide a fresh headache for Beijing’s regulators.

Trade tensions

Tensions between China and the EU, US, UK and Australia continue to worsen following sanctions imposed by both sides earlier in April.

Australia, it has been estimated, lost approximately $5.5Bn in bilateral trade with China, its largest trading partner over the past six months following tit-for-tat trade embargoes. Perhaps with this in mind New Zealand has, this month, disappointingly withdrawn from supporting a broader coalition of allies in confronting China’s treatment of its minorities, its crackdown on Hong Kong and increasingly belligerent wolf warrior foreign policy.

What the CBI is doing

Locally the CBI China team is hosting a CBI member breakfast on 27 April in Beijing, focusing on the importance of the UK’s soft power and UK-China people-to-people engagement.

Despite the very challenging geopolitical environment we continue to work behind the scenes with our Chinese interlocutors and have received visits from the Hainan and Qingdao city governments in the past fortnight.

Earlier this week the team also attended a half-day ‘2 Districts’ seminar promoting two high tech zones (Haidian and Changping) in North Beijing in partnership with the Beijing city government.

Additionally, the team has been supporting the Canton Trade Show (virtual), will attend as a delegate at the 20-21 May Central China Expo in Taiyuan, Shanxi and is a supporting partner at the upcoming Greater Bay Area (GBA) Summit scheduled for 17 June.

Whilst political relations are at an impasse business to business engagement continues unabated.

Get in touch

For more insights or to receive the team’s weekly China/NE Asia/Asia-Pacific email updates, please get in touch.

The view from the USA

Developing relationships with the new administration

As the new president races to expand vaccination access and promote a major infrastructure reform package in Congress, the CBI Washington office has been busy developing relationships with the administration. And while President Biden has yet to engage substantively on the future of the UK-US FTA negotiations, the CBI has privately lobbied for the agreement with Members of Congress. The team has worked with the office of Utah Senator Mike Lee to craft a resolution to express the will of the Senate to conclude a comprehensive UK-US FTA.

Trade and multilateral issues

For now, the trade negotiations are unofficially on hold, however, there is plenty of room to work the administration on multilateral issues. Given that the current US administration may not place a heavy emphasis on trade policy, closer links to state governments to promote services deals and closer investment ties will be crucial to expanding the US-UK economic relationship moving forward.

Mutual recognition

The CBI is engaging substantively at the state level to open up access to procurement markets and to build consensus for signing agreements on the mutual recognition of professional qualifications to make trade and investment more seamless.  News that the UK government has gained traction securing mutual recognition agreements for services with various state authorities is extremely welcome, we’re making strong progress here.

On climate change

Furthermore, on climate work the team has brought the Minnesota state government into the fold of the CBI’s Goal13 climate impact platform and hopes to expand participation with relevant state governments in the future.

Get in touch

For more insights, please get in touch.