 Shanghai - a conclusion We glibly say the word "globalisation" but until you've seen the full force of what this means it trips off the tongue. Shanghai was that force. The ten MPs on the trip saw at first hand what I would call the "changing of the guards". By 2020, sooner than experts anticipate, China will be the number one economy in the world. This is startling. It would mean a command and control central economy has managed to outscore the naked capitalism of America, its main rival. Given there is a Presidential election in the USA later this year, it'll be interesting to see how McCain and Obama handle this subject. McCain has said he wants a reduction in gas prices...and therefore the answer for him is to invade Iran and stay in Iraq. These two countries have the first and third largest deposits of oil.Whilst America concentrates on the old politics, China is hoovering up Africa's raw deposits in oil, iron, bauxite, timber et al.China is also seeking a more permanent relationship with Russia over the USA's plans for a defence scheme in Europe. The clock is ticking...and we heard it for the first time. There are a number of problems that the Chinese Communist Party has to resolve. At the moment, she subsidises energy use at about 35-40% below market costs. They simply cannot afford for this to continue unless they know they have found more deposits themselves, both off the coast and in the interior. Then, the Party itself has to maintain a discipline that has not be seen before...the USSR eventually broke up in front of us within months...can China stave off the demands of a more educated society? She is already the biggest luxury market in the world and can she accept the growing pains of becoming the world power all at once? Finally, as we failed to see the sun or the sky for seven days in Shanghai we noted that offices not only had air conditioning but since this takes in outside air (grim) they now have air humidifiers and the like cleaning up the air con...meanwhile the energy costs remain subsidised.In addition, seven of the ten most polluted cities are Chinese so their green agenda needs to be massively advanced. This presents a very big opportunity for UK companies. What were the lessons we learned? For starters, it is barking that in a country of 1.3 billion we can expect to run it through the old FCO model of a single embassy with sub committees doubling as consulates. This won't work. The whole system is creaking. We have endless RDA, Welsh, Scottish and Northern Irish offices separate from our embassy; this is crackers and a complete waste of public money. There should be three embassies serving China - a political one in Beijing and Business/Education ones in Shanghai and Hong Kong. We need to do things differently in China In terms of planning new towns, we should send parties from every planning authority in the land to visit Suzhou, fifty miles east of Shanghai. Started in 1994, almost the same time as the Thames Gateway, it now has a population of 10 million and hosts eleven universities. The Thames Gateway is toast by comparison. Either we "get" globalisation or we just go on celebrating being second rate... It was pleasing to meet a number of outstanding, indeed global, UK companies doing so well in China - GKN, BP, Arup, PwC, Marsh, Rolls Royce, Dulwich College, the universities of Liverpool, Nottingham and the Sino British plus, of course, Virgin Atlantic. All have taken their time to bed down in China and this has brought rich rewards in every sense. Good for them and the senior management teams ought to be congratulated. We also should give thanks to: Sally Muggeridge and Sarah Hutchison at the IPT (www.ipt.org.uk) for arranging the visit and finding the funding Rachel Shooter also from IPT for handling the website back home Virgin Atlantic for the flights Pearson for the Dorling Kindersley Guide to China books Shangri-La Hotel in Shanghai for hosting our "thank you" drinks and supper on the final evening Our many hosts, our interpreter, our photographer and especially our coach driver and finally Bill and Ben - that is Bill "Oddie" Olner, MP, Chairman of the IPT Trustees and Ben Chapman MP, Chairman of the All Party Parliamentary China Group and Author of the "Collected Speeches". ____________________________________________________ Monday 26 May 2008 Another frantic day in Shanghai Last night there was an aftershock in Yingxia in the Sichuan province killing two, injuring a further 359 and causing the demolition of 270,000 houses. This was on top of official figures released yesterday of 62,664 deaths, 23,775 missing (presumed dead) and 350,000 injured. Given that the whole area has been destroyed, I had to assume that this meant the IT system had gone down too and with it, all the local stats. such that I wondered how reliable these figures were. It looks to me as if there has been some local party corruption in Sichuan, especially with regard to the building of all of the schools as they have all been destroyed, yet the Party's buildings largely survived. If this is the case, life might become a little uncomfortable for local party officials as the inquiry into what has happened gets underway. I woke this morning with the great news that Lewis Hamilton had won the Monaco Grand Prix, the first Brit since Graham Hill back in 1969. Then, I heard that Monty Panesar's 6 wicket haul had given England a chance of victory against the Kiwis. Not such good news was that the MP Anne Moffat from East Lothian had been mugged by a group of teenagers whilst out jogging and had lost consciousness but though bruised, has recovered. Over breakfast we caught up with one another's activities yesterday. Peter Luff went to a circus, David Amess made some room in his wardrobe for Mr Armani and Graham Allen and others took an evening boat trip. Monday may be a Bank Holiday at home but for us it was back to work as usual as we had another hectic schedule. It started with a meeting at Dulwich College, Shanghai with Alison Beale of the British Council, Fraser White the executive founder of the local Dulwich College, Sabrina Young of the Sino-British College and Professor Peter Buttery and Sue Bishop of the Nottingham University-Ningbo University complex, south of Shanghai by a couple of hours. Alison told us that the British Council has four offices in China plus Hong Kong (which I visited last July) and that at every level competition is fierce for school and university places. In 1998, 3,000 Chinese students undertook to study in a UK university but today that figure is 60,000. At the 15-18 age group here, there were 10.1 million applications for the German version of a "Gymnasium" yet there were only 5.7 million places. The UK Government has an annual Education summit with its Chinese counterparts (introduced in 2000) and John Denham attended the last one in October 2007 but there has not yet developed an equivalent of a "UKIERI" joint venture which Tony Blair put in place with Indian HE institutions in New Delhi in September 2005. Dulwich College, Shanghai was one of those great entrepreneurial stories of an ex-pat - Fraser White - wanting to find a local solution for his three children and ended up with him securing the franchise from Dulwich College, in SE London to develop schools first in China and then across the world. As in all these examples, the school was built in record time, to budget and ahead of schedule. It opened to 18 kindergarten children in August 2003; it now has 1,100 fee-paying non Chinese students which will rise to 1,300 soon, but it is already the top school in Shanghai. Sabrina Young told us about the joint venture between nine northern based universities in England including Bradford, John Moores (Liverpool), Leeds and Sheffield Hallam with the University of Shanghai for Science and Technology which started taking students in September 2006 and has a compliment of just under one thousand already! There is a pent up demand for the British system of higher education here. Finally, Professor Peter Buttery told us the story about the joint venture between Nottingham University and Ningbo University which started in 2004 and already has 2,777 students in many disciplines. We were all suitably impressed but noted that Oxford, Cambridge and Imperial had not yet ventured here or had decided it was not yet appropriate; soon it will be too late. I then went to see the British Council in Shanghai whilst the rest stayed for a tour of the College and lunch. After lunch at Zen with Alison Beale I met up with the others - minus Bill Olner who was absent visiting Rolls Royce. Larry Liu, Michael Johnson and Tony SH Lau from the insurance brokers, Marsh gave us an Idiot's Guide to the risk assessment market here in China which, given the earthquake, was prescient. We had a wash up with our Consulate before hosting our "Thank you" party to everyone for making this such an exciting visit. It was then back to our hotel to pack as we would be off early in the morning for Heathrow. ____________________________________________________ Saturday 24 May 2008 A lot of surprises outside of Shanghai On Saturday we ventured forth to Suzhou which is, as the crow flies, about 80km (50 miles) west of Shanghai. The journey was uninspiring and made most of us wonder why we were bothering. As usual though, our breath was taken away when we arrived in a new part of the province called Suzhou Industrial Park (SIP). The park is large, even by Chinese standards and was set up in 1994 following a visit by Deng Xiaoping, then President of China, to better understand what Lee Kuan Yew had done in Singapore. In essence, it is a new city which is simply staggering in size and ambition and which already houses 10 million people...but because the Chinese Government owned the land and because there were no planning issues, the Park could be built in record time (www.sipac.gov.cn). Its focus was initially on manufacturing so the UK's presence was slight but now it is branching out into science, media and IP, so there is a better chance of us being present. As it stands in China per se we are the second largest inward investor. Everything about SIP, including a 3D space module designed presentation suite where we were strapped in to our seats and virtually flown over the whole area (two special effects included being snowed on and having bubbles land on us), was impressive and made all of us question why we were bothering with such schemes as the Thames Gateway which seemed so second rate by comparison. We are in danger as a nation of settling for second best there. The local party congress members gave us a formal banquet for lunch - nothing exceptional - just eleven courses and two toasts! In the afternoon, we stopped by to see the new Xi'an Jiaotong-Liverpool University (Nottingham University also has a major presence here). This is another imaginative initiative between our two countries and gives Chinese students a chance to study in English and to experience the English tutorial system. This is brand new for local students and it takes them 3-6 months to acclimatise to the idea that they should contribute to the subject being taught: (www.xjtlu.edu.cn). The Chinese here are experimenting with three different models of higher education to see which is the most appropriate for the 21st century. Almost as an afterthought we were then taken to the Humble Administrator's Garden in old Suzhou; the city was famous for lace and Marco Polo dubbed it the "Venice of the East" when he visited in the 13th century. The city has many canals though the majority have also been built over. Next door to this Unesco site was the new Suzhou Museum (www.szmuseum.com) which opened last October and you could be forgiven for wondering why I am bothering to mention it...it's because it was designed by the 91 year old Chinese-American architect I.M. Pei who also built the pyramid over the Louvre, the JFK Presidential Library, and the soon to be opened, Islamic Musuem in Doha (which I visited last month) and much more besides. Being a bit of an I.M. Pei groupie, it was wonderful to meet his niece at the museum and to talk about his work and to again marvel at the simplicity of the structure he has designed here. Pei was born in Guangzhou and his family had an estate called the Lion Forest Garden in Suzhou. In the evening some of us ventured out to here the Peace Hotel's jazz band but as the hotel itself is undergoing renovation (Shanghai has EXpo in 2010) we couldn't relish in its own surroundings and had to make do with another glitzy hotel building which frankly didn't suit the jazz. The band though was something else, playing 30s and 40s big band sounds in a way - how can I put this kindly - which reminded me of another era. Still, we persevered, chatted to them, asked them to play some favourites and then we were off in search of a Thai restaurant for dinner. Sunday was a free day and so the group went its own way. A few us managed a little light shopping - nothing too adventurous - watches, jewellery, silk ties, jackets - that sort of thing...readying ourselves for our last day here tomorrow. It has been a very exciting and stimulating visit. ____________________________________________________ Friday 23 May 2008 Shanghai-ed by the Tories The news of the Crewe by-election caused some merriment by the four Tory members here in Shanghai. They asked the local peoples' party if they could declare an official Week of Gloating...and at every opportunity they sang a song I vaguely remembered called "Things Can Only Get Better". Otherwise, we had a sensational morning of lectures and discussions. However, because it was Shanghai's day to have the parading of the Beijing Olympic torch, traffic was awful and so we used our coach and then the metro to move around this frighteningly large city. We began with Andy Graham, President of BP China - who'd had a couple of years secondment in the Treasury, and Dr Stephen Wittrig, Director of Advanced Technologies (and much more besides). BP China is doing a stunning amount of work here laying down a series of joint ventures across the whole of their industry backed by a world class programme for research led by Cambridge, Imperial, PrincetonBerkeleyCal Tech and the China Academy of Sciences. They not only think their industry must be global but they have put in place a global spread of smart thinkers. In this, BP is someway ahead of our own university sector. Next up, via Shanghai's amazingly clean and beautifully proportioned metro, were the good people of Arup. Ove Arup founded this company back in 1946. We were treated to lectures where the substance of the arguments put forward by Michael Kwok and Alex Mitchell were as stimulating as our earlier session with BP. Arup is all over China (including a 550 strong office in Hong Kong) and they too have the measure of the place. Their work includes both the 2008 Olympic stadium known as the birds' nest and the swimming pool known as the ice cube. In Shanghai they are busier than the bulldozers and have project work including a very sensitive eco town of 88,000 just to the north of the city which also doubles as a Site of Special Scientific Interest. We were fortunate to be in the company of two such outstandingly led organisations. Of the endless stream of statistics, the one that worried me the most was that as 440 million rural Chinese move into the metropolitan areas over the next 10 years 80 new cities, each of 5 million people will need to be built. This will have a staggering impact on the price of steel, bricks, energy and human resource. It is not surprising that in Beijing they are already beginning to worry about the quality of the buildings in SichuanProvince which collapsed so easily causing 55,000 deaths. After a scrumptious lunch in a very private club, we were guests of the ShanghaiMuseum which has just made entrance free (the queues last Monday were twice round the block). I took in the bronze age shields, the sections on the Greek Olympics - a travelling road show from the British Museum, calligraphy and ceramics (the best galleries by far). Tonight we are being hosted by Virgin for supper. No doubt the Tories will have some more fun at our expense. It was ever thus... ____________________________________________________ Thursday 22 May 2008 The time here is just short of 6pm; I missed the Man Utd victory over Chelsea because kick off time was 3.45am though we caught Barack Obama's victory in Oregon and loss in Kentucky but he looks set to win the nomination; of much more importance is the Crewe by election result which I will hear over breakfast tomorrow morning! Where am I? I'm in Shanghai with nine other MPs as part of the IPT China Fellowship to "Understanding Business - the Chinese way". Alongside us are representatives from Virgin, PwC, BP, Arup and GKN. We arrived yesterday (courtesy of Virgin) overnight from Heathrow. Once settled we had a briefing from Carma Elliot our Consular General. First impressions are always important and I thought that we were seriously under represented by both the FCO and BERR. We moved on to a local Foreign Office building for a solemn but moving occasion where we all signed a condolence book for the thousands and thousands of Chinese killed by the earthquake in Sichuan province last week. Finally, we had a long session with officials from the Shanghai Municipal People's Congress where we exchanged views on politics (there's a surprise), relations with Beijing, Higher Education, IP and other subjects. We were due to be hosted by them that evening but because of the three days of official mourning for those who died in the earthquake, this was understandably cancelled. Shanghai is a boom town: a Manhatten married to CanaryWharf ten times over. Fifteen years ago much of the northern part - Pudong - was nothing more than paddy fields…it is bigger in size and population than London. This morning (Thursday) we visited two outstanding parts of GKN, one of our great global companies in Pudong, including their manufacturing plant in Kangqiao - one such building could have housed three Wembleys.GKN is an automotive (65%) and an aerospace (35%) company and first came here with a JV 20 years ago though the business was first started back in England 249 years ago (not a lot of people know that!). After lunch we had a fascinating series of presentations with PwC stretching over 3 hours.Here is one set of statistics to remember: total population of China is 1.3 billion made up of 300,000 millionaires, 50 million middle class on salaries of $7,400 to $14,800 p.a., 482 million urban population on an average salary of $2,600 p.a. and wait for it, 769 million rural poor on $400 p.a. Pay attention as there'll be more stats. Tomorrow! But already, China is the largest luxury market in the world and Shanghai boasts most of the shops...paradise for some. Otherwise, we've a British Chamber of Commerce dinner tonight and visits to BP and Arup tomorrow. Until then: "Wanshang Hao".
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