‘Auntie May’ clutches victory from the jaws of defeat in China

by Sam Turvey | 2nd February 2018

Had one chosen to opine about Theresa May’s visit to China at the end of day one, which was tempting, your author would have despaired at what appeared to be a serious missed opportunity. He would also have been wrong. It pays to hold judgement until the end.

The Prime Minister’s trip – which included one of the largest UK business delegations ever assembled for a Chinese tour – was preceded by troubling headlines about a determination not to endorse President Xi Jinping’s Belt & Road Initiative.

The Government had concerns and was being cautious, which is fine in principle, but any nation wanting to do serious business with China – and particularly a post Brexit Britain – needs to get fully on board with Belt & Road.

While Xi’s global trade initiative is bold there is no denying it has issues that make Western nations uncomfortable. For example: a predominance of Chinese companies on projects and transparency concerns for banks being asked to finance infrastructure in unfamiliar parts of the world.

Nonetheless, this is Xi’s flagship idea. The big one that underpins his entire philosophy of projecting a strong and confident China: a world leader, proud, and at the top table in terms of economics, trade, diplomacy and security.

Britain’s inability to sign an MOU and generously applaud Belt & Road’s considerable ambition, regardless of the underlying concerns, was honest and respectable. But, it is hardly a means of pleasing the world’s second largest economy, and potentially one of the most important trading partners Britain could have once adrift of the EU.

In truth, scepticism about Belt & Road represents a bigger issue: is Britain a friend of China’s or not? Fence sitting can only last so long, while lecturing – about Beijing meddling in Hong Kong affairs for example – will only serve to antagonise. The end result of such a combination will only ever be limited trade opportunities and reciprocity from the Chinese.

This script appeared to be playing out all too predictably when the first tranche of deals announced from the trip focused on some relatively lowkey education exchanges. These were smart, workmanlike agreements – typical of Theresa May’s style – but hardly the bold, news grabbing announcements the country so desperately wanted to see.

But, then we had Aston Martin’s news. The luxury carmaker will invest £600 million in China as part of a five-year investment programme. And we had Future Planet Capital’s collaborative agreement on commercialising technologies and promoting innovation, which included an in principal pledge from two investors worth $470m. These were much better examples of brand Britain on the global march.

Out next was an even bigger number – and probably the one that should have headlined the trip. May’s delegation had signed over £9 billion in deals that will create over 2,500 jobs in the UK. Now that’s a serious win if the figure stacks up.

Meanwhile, striking quite a contrast to the sentiment found in the UK press, the Chinese media were being surprisingly kind to the PM. They affectionately dubbed her ‘Auntie May’ and there was little negativity, if any, about the failure to sign the MOU. In fact, there was praise for the “intelligence and pragmatism” Britain had shown. Clearly, some behind the scenes diplomacy had been very effective.

A final meeting with President Xi, some positive noises about enhancing the “golden era” of UK-Chinese relations, and it is hard not to score Auntie May with anything less than a B+ for this visit. The challenge now is to keep it up.

About the Author

Sam Turvey

sturvey@maitland.co.uk

A globally-minded advisor, specialising in building strong corporate profiles and guiding senior leaders through critical situations including M&A, fund raising, market entry, crisis and internal change

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