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• The 48 Group holds a unique place in international trade history, writes Luise Schafer.
‘Equality and mutual benefit' or, in Chinese, pingdeng huli, the motto of The 48 Group of British Traders with China, echoes the words used by Zhou Enlai, China's much-loved premier from 1949 to 1976, who first used the phrase in public in 1953. He was setting out China's ‘five principles' of co-operation with the outside world to a visiting Indian delegation.
Honorary chairman of CCPIT, Bo Yibo, meeting The 48 Group chairman, Gordon Sloan, in 1985, with Jack Perry (second right) and Stephen Dreyfuss looking on
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By taking up such a principle from its earliest days (today we'd call it a mission statement), The 48 Group demonstrated how closely it would follow and seek to understand China's developments. In this way it would try to match China's development needs by introducing relevant British companies and their products to the market. This was often in the face of adversity and always with limited resources. As a result, Britain and The 48 Group earned a special place in the annals of international trade history – the first Western country to open trade with the new China, on a platform of mutual respect.
The strength and success of the group and its forerunners were not financial, but lay in the work of a few visionaries such as Jack Perry, ‘Tod' Sloan, Roland Berger, Percy Timberlake, Professor Joan Robinson and the British companies which formed its membership – a mutually supportive network.
Equally important was the very close relationship with Chinese counterparts, for example the China Council for the Promotion of International Trade whose chairman, Bo Yibo, became a firm friend. Fifty years later in spring 2004, his son, the dynamic Bo Xilai, took up the post of minister of commerce and so a happy continuity is realised.
Going it alone
As a privately constituted body which had led the campaign against the British government's embargo of trade in those earliest days of the new China, the group had no recourse to public funds, nor did this trouble them. By working directly with and for British industry they could keep their agenda sharp, pertinent and flexible to changing needs. To keep up with China's modernisation agenda it was always important to ensure group events were relevant to the membership. By focusing on China's requirements and introducing specific technologies/products in a timely and effective way, British companies were ensured an excellent chance of winning business and Chinese customers were satisfied - often returning for repeat orders because trust and quality had been established.
The small number of importers in The 48 Group were just as active as the exporters and gave China a chance to earn hard currency with which to buy further British goods - a virtuous circle was created and for many years Britain led the trade with China among Western countries.
This was long before China became the very popular business destination and major economic power that it is today. It took determination and hard work, but bilateral trade increased dramatically over the years so that Britain was China's premier Western trade partner up until the late 1970s. Companies joined, left and re-joined the group, but membership always grew steadily as business took off. By the 1980s when China's opening-up reform programme started, Germany, the US and others began to go to China in greater numbers. New challenges faced British industry.
Also on these pages, Percy Timberlake (an original "Icebreaker" from the 1950s, now a distinguished Fellow and vice-president of the 48 Group Club*) outlines in more detail the history of the "Icebreakers" who were the forerunner of the group. Without official government backing, the hostility directed at those who wanted to open trade with the new China cannot be underestimated, and many personal sacrifices were made. The hard-won breakthroughs were worth it in the end; the pioneers foresaw China's huge potential, they envisioned a world where China could take its rightful place among a community of peaceful trading nations, and predicted the benefits that would accrue to both Britain and China.
A snapshot of trade promotion highlights
Among the singular achievements of the "Icebreakers" and The 48 Group were:
1953: The £30,000,000 Business Arrangement: an unprecedented two-way trade deal signed in Beijing and followed up a year later
Fifteen years after the signing of the 1953 Business Arrangement, John Milner, Albert Poulden, Harold Spencer, Gordon Sloan and Roland Berger (left to right), look once again at the original document
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Mid-1964: British Mining and Construction Equipment Exhibition: largest display of Western equipment ever to be held in PRC until then. Stand sales alone reached £300,000
Late 1964: First ever single-industry delegation to China, by Mining Equipment and Port Installations, meeting China's priorities at the time
1970: First trade mission to China after Cultural Revolution. Chinese promise honoured: 48 Group first organisation to be invited back
1972: Automotive and machine tool delegations. Early technical group, 80 lecture-hours. Considered best ever mission by Chinese. Foreign Trade Vice-minister Li Jiang spent a morning with delegates
1974: Group's 20th Anniversary in China include groundbreaking talks. Manufacturers explain how to deal with price escalation and UK Ambassador Edward Youde takes interest in the group's contribution to trade
1976: End of an era; start of new business promotion models. Mao and Zhou Enlai die; new leadership looks to future. Group instigates new concept of frugal, but targeted, exhibitions with parallel technical symposia. Highly successful: £1.6m contracts concluded (£600,000 on stands)
Late ‘70s: High point: technical exchange programme. Most significant contribution in this period. Twice-yearly bilateral exchange covering aerospace/aeronautics, metallurgy, agriculture and communications
1978: 25th Anniversary. Turning point; new forms of trade explored. 48 Group recognised as ‘most potent force' in bilateral trade. Working party on technology transfer, buy-back, production know-how, presages China's new economic plans to attract foreign technology and investment
1979: Seminars in UK to brief companies on new forms of trade. Three seminars in 1979, e.g. ‘New Realism in Trade with China'. Twenty proposals suggested from working party resulted in business negotiations in China
1980s: 48 Group's unique influence used to assist British companies. Contract with Chinese corporation threatened due to lack of forex. Group puts case on behalf of UK company to ministry, Chinese Embassy and Import/Export Commission. Argument upheld, and UK wins the business 48 Group co-operation agreements. Between 1982 and 1989 agreements signed with Liaoning, Jiangsu and Guangdong provinces and with Dandong, Chongqing and Chengdu cities to share business information and provide local support to UK visiting companies
1984: 30th Anniversary. China's regions feature further in missions. Coal utilisation mission visits coalfields in Shanxi/Hebei; mixed mission visits Liaoning, Shandong, Jiangsu and Shanghai. Received by Premier Li Peng and relevant industry ministers Group receives delegations to UK. Quality control study mission from State Economic Commission and marketing methods study mission from Heilongjiang; meetings exclusively for members Seminar series: ‘Knowing China in the ‘80s'; ‘New Opportunities, New Problems'; ‘Interpreting Chinese Negotiating Techniques'
1985: First British Trade Office in China – Beijing. A groundbreaking initiative – a liaison office set up, funded and used by subscribing companies to develop business. Sir Richard Evans, UK ambassador, and Bo Yibo, State Councillor, attend opening
1986: Queen visits China; Group invited to Shanghai Trade Days. Twenty 48 Group members participate in trade talks which coincide with arrival of Royal Yacht. Soft loan facility negotiated around this time, five members involved
1987-8: Surge of delegations to UK. 48 Group received 20 ministerial, state commission and provincial-level delegations as well as those from CITIC and CCPIT for benefit of members
1988: Opening of Shanghai Office. Major dinner to celebrate "Icebreakers" anniversary held in London. The second liaison office opened; funded and used by subscribing members
1989: 35th Anniversary. Largest yet British trade mission to China. In October, five contingents, nearly 100 delegates, stretch north to south, east to west to look at opportunities in China's 8th five-year plan. Tragic events in Beijing in June meant no high-level contact was appropriate, but business contacts and the FCO posts welcomed the group warmly. As in 1950s, it was a time of adversity, but people-to-people contact was a hallmark of the 48 Group
1990s: Follow-up mission ‘Visit China with the experts'; new era begins. Activity generated by 1989's mission continued for months afterwards and two missions visited various provinces again in the autumn of 1990 to continue business.
Meanwhile, discussions began on a proposed merger with the Sino-British Trade Council to combine resources and effectiveness in trade promotion with China. The China-Britain Trade Group was born in January 1991 to continue the advisory and promotional work. The 48 Group Club* was formed later that year to maintain the spirit of the original pioneers. An informal and friendly outlet for networking and social contact between people from business, cultural, diplomatic and academic circles, the Club was established for anyone with interest in and association with China trade. The Club's motto provides a fitting continuity between the pioneers and the new generation: ‘equality and mutual benefit'.
Written with a debt of gratitude to Percy Timberlake from whose history of The 48 Group the substance of this article is taken. To enquire about the book The 48 Group - A History of the Icebreakers in China, please contact the 48 Group Club* at 31 Bellpit Close, Worsley, Manchester M28 7XH Tel: 0161 975 2945 email: the 48groupclub@jhms.net
Luise Schafer is vice-chair, 48 Group Club and vice-chairman of a British manufac-turing JV in China – Shanghai Abacus Lighting. © Luise Schafer 2004
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