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• First Person - Hugh Davies
Hugh Davies compares and contrasts the state of British business in China in the 1960s and 1980s.
My first stint in the British embassy in Beijing (properly then called the Office of the British Charge d'Affaires) was 1969 to 1971, at the end of the frenetic phase of the Cultural Revolution, though that term is now extended to cover the whole 10 years 1966-76. The Red Guards had burnt out the British Office in August 1967. There was near anarchy throughout China. The atmosphere was not propitious for trade – except perhaps with Albania. But the annual Canton Trade Fairs still took place each autumn and a few tough souls braved political storms, waved regulation Little Red Books, chanted some Mao slogans and completed deals to buy Chinese commodities from state trading corporations. It was reminiscent of the foreign factories in Canton and the strictly controlled trade conducted with the Hong merchants before the Opium Wars.
But some contemporary touches impinged. One British businessman looking for bargain cotton undergarments reported he was unable to buy bras. He was informed by his straight-faced Chinese interlocutor that: "The whole question of brassieres is now under investigation and discussion in the ‘struggle, criticism, transformation movement'" (one of the countless political movements of those days). What exactly they hoped to transform is best left to the imagination.
As the political situation calmed, two UK trade delegations visited the embassy during my two years, one led by Sir John Keswick, the president of the Sino-British Trade Council, and another led by Roland Berger, the adviser to The 48 Group. Keswick was an old friend of Zhou Enlai and there are stories of late-night whisky bouts, but probably not on this occasion, as even Zhou Enlai had to watch his back. To be too close to the old imperial lion was not good for political health. The 48 Groupers blended better into the political background of the era, and were surprised to be invited to drinks at the British Office. We circled warily around each other.
Engineering a breakthrough
My next visit to China was as one of two FCO officials accompanying Peter Walker and Michael Heseltine to the opening of the 1973 British Industrial Technology Exhibition. This was the only large-scale UK trade exhibition ever mounted in China and introduced Chinese engineers to some of the UK's great engineering firms. Premier Zhou Enlai toured the stands. Both Lord Walker and Lord Heseltine now frequently cite their visit in 1973 as a groundbreaker. But China was still in the grip of political turmoil.
I returned to the embassy in January 1984, this time as commercial counsellor. What a difference a reform and opening policy can make! Suddenly everything seemed possible. "Four Modernisations" rather than "Never Forget Class Struggle" seemed a more encouraging slogan. Over the next three years the flow of visits by British ministers and business delegations was non-stop. The small commercial section under my direction was run off its feet.
The political background for us was dominated by the Hong Kong negotiation, which concluded in December 1984 with the signature by Prime Minister Margaret Thatcher and Premier Zhao Ziyang of the Joint Declaration. Once that was done, our Chinese friends decided that any hesitation about trading with the old lion should be set aside.
Early in 1985 Lord Young led what was then described as the most senior British trade delegation ever to leave the shores of the UK. Some decent business was done, even if (as the irreverent Daily Telegraph correspondent, inconveniently also named Hugh Davies, was quick to report) the value fell well short of Lord Young's incautious forecast of deals worth billions of pounds.
It was ever thus. One recalls similar expectation mismatches for subsequent trade missions - whether led by presidents of boards of trade or by German chancellors! And, to be fair, when Lord Young returned for his next visit in November 1986, ("the Second Coming of the Lord", as we called it), he was much more circumspect in advance. Lord Young visited China several more times and fulfilled the valuable role of a special minister for China, now occupied by John Prescott.
Down memory lane
Perhaps two other events during my tenure should be mentioned. First, the endless negotiations over the Guangdong Nuclear Project, which had commenced some six years earlier, were finally concluded with a grand ceremonial signing in the Great Hall of the People in 1985. This was a complex UK/France/China joint endeavour, to build a nuclear plant in Daya Bay, its foreign exchange costs met by selling electricity to Hong Kong. It involved the embassy in lengthy participation in the commercial discussions. At one point, the ambassador made the decisive commercial offer on behalf of GEC to Vice-Premier Li Peng (who was leading the Chinese side), not something ambassadors frequently undertake.
The other memorable event was the Sea Day that I helped to host on board HMS Britannia on the Huangpu river during the state visit by the Queen in October 1986. For our Chinese guests, this must have been extraordinary, and I suppose that none of them will forget it. Nor will I forget the view from Britannia of the floodlit Bund on the evening of the state banquet, and the whispered confession from one Shanghai guest that 50 factories had lost their power to allow the Queen to see the lights.
The great advantage of being commercial rather than political counsellor was that I met many of those at vice-minister level and below who were in due course to be senior leaders. I met Jiang Zemin as minister of the electronic industry, Li Peng as a vice-minister and later vice-premier, Zhu Rongji as vice-chairman of the State Economic Commission, and many others. So, never believe those who say that the embassy political officers have all the fun!
My time heading the commercial team ended soon after the ‘Second Coming'. It had been a great experience. And particularly pleasing that, over the three years, UK exports to China had actually tripled. Of course I take full credit for that!
Hugh Davies is chairman of the China Association and a CBBC Council member
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