by Alasdair Charnock
On Monday, £1.4billion worth of trade deals was signed between Chinese and British companies and was shown off by Prime Minister Cameron on a day of pomp and ceremony with the Chinese premier, Mr Wen.
The expectations are that these deals will help boost British companies’ exports to China and to give the UK a piece of the growing Chinese pie – a pie that is now worth almost 5 trillion US dollars. However there was a feeling that the deals mean a lot more to the UK than to China.
Nevertheless, what the day did underline was the importance of international trade deals, and that even countries with economies as large as the UK are working as hard as possible to maintain a strong global foothold.
This not only confirmed my belief that trade is one of the fastest routes for economic growth and to escape poverty (see China), but it also made me realise what a hard struggle least developed countries (LDCs) face in order to get fair deals with the global elites.
We already know that poorest countries face an even harder struggle to follow in the footsteps of the world’s development success stories that used trade to become what they are today. Those countries were able to break into developed countries’ markets initially on the basis of low labour costs. But they have now built up a critical mass of industrialisation. The latecomers now have to compete against the emerging economies which have already acquired some industrial sophistication but still have relatively low wage costs. So fair deals are even more important.
We would welcome seeing our Prime Minister on the footsteps of Downing Street meeting leaders from LDCs having just announced trade deals that will help them lift themselves out of poverty.
The trade deals signed between Chinese and British companies on Monday highlightd the importance of international trade deals, but served to underline the hard struggle Least Developed Countries face to get fair deals with the global elites.