UK enthusiastic about opportunities to sell to Asia
HONG KONG : The rise of Asia offers western countries a chance to open lucrative new markets and prosper along with the region, says Britain's top financial policymaker.
‘‘I believe we can be bold in forging a new alliance between Britain and our Asian partners to . . . make global finance a force for good,’’ says Mr Osborne.
"A richer, stronger Asia is an opportunity for the world, not a threat _ we should be bold enough to say it and to explain it to our own populations," said George Osborne, the UK Chancellor of the Exchequer.
Addressing some 2,000 corporate leaders at the Asia Financial Forum, Mr Osborne said that if western countries are bold enough to take the right steps, then growth in Asia could mean growth for the West and for Britain.
"It is precisely as Asian economies become richer and become nations of consumers that hundreds of millions of people will want to buy the things that British companies can sell them," he said.
"They will want to buy modern medicines for the first time _ and when they do so, I want to make sure it is from pharmaceutical firms such as Glaxo SmithKline and Astra Zeneca, the largest employer in the constituency I represent.
"They will need modern insurance, banking, and accountancy services, and when they seek those services I want them to do so from companies such as HSBC, Prudential, Barclays and Standard Chartered. The wealthiest will become consumers of Rolls-Royces made in Sussex, and Bentleys made in Crewe, dressed in Burberry clothes manufactured in Yorkshire."
The Asian economic growth miracle, he said, was one of the most remarkable achievements in modern history.
He cited the example of the Chinese economy being 15 times larger than it was when he first visited China as a student two decades ago. South Korea in 1960 had the same income per head as Sub-Saharan Africa but today, South Koreans enjoy an average income of $23,000.
"What is the human story behind all these statistics? The desire of people to have a better life and to leave to their children more than they were born with," Mr Osborne said.
This desire, he said, was the most powerful force for progress ever known _ and in Asia it has driven an economic transformation.
But the transformation has not been that easy for the West as some countries believe the rise of Asia has been a threat. he maintains that it is in the West's best interests to adapt take the best advantage of the Asian growth story.
"If we are going to make the most of what the growing economies of Asia have to offer Britain, then we need make sure we have dealt with the problems in Britain's economy. And we are," he asserted.
While Asia will pull up world growth over the next decade, the global economic and geopolitical landscape will also change, and some economies may adapt to while others may not.
These adjustments are already visible with high unemployment across the western hemisphere while developing economies are scrambling for resources, which has driven up commodity prices.
The continued strength in the prices of the commodities despite the West's weakness is a clear indication but Mr Osborne says this is a good problem and not a bad one. "These problems are the problems of success _ the problems of a stronger world economy."
Therefore, he said, the opportunities are there but how one grabs them is the challenge. For Britain, exploiting London's strength as the centre of global finance is one obvious approach.
"It also provides huge opportunities to trade and invest for countries who seize them, and I believe that we can make Britain the home of Asian investment and Asian finance in Europe."
He acknowledged that the rise of the East and the decline of the West could have some negative consequences, such as trade protectionism.
"I believe we can be bold in forging a new alliance between Britain and our Asian partners to defeat the forces of protectionism and make global finance a force for good," he said.
He added that there was a need to look at new and innovative alternative approaches to taking forward trade liberalisation, consistent with WTO rules. That means continuing to push ahead with ambitious free trade agreements with key partners.
Britain, he added, was pushing hard to complete EU free trade deals with India and Singapore this year, as well as maintaining momentum toward an ambitious agreement with Japan.
Apart from this, Britain believes there must be a reformed and more representative IMF with the tools and resources to do its job.
The reforms agreed at the Seoul G20 summit in 2010, which the UK was one of the first countries to ratify, will ensure the IMF is more representative of its whole membership.
"The IMF does not belong to any one region of the world. Its role is to support countries that get into difficulty, not currencies," Mr Osborne said.
The risks faced by the global economy have increased significantly over the past year, while the capacity of the IMF may also need to rise to ensure those risks can be addressed _ "but this cannot be a substitute for action by the euro zone", he added.