• View from the Board - THE REVIEW INTERVIEW
In June, Barclay Forrest and Steve Gilman stood down as Board members of CBBC. The Review’s Humphrey Keenlyside spoke to them both about the changes they have witnessed during their periods of office, in China itself, in their businesses and in CBBC.

During your time as Board member what have been the most significant changes in China?
Barclay Forrest: I have been on the Board for a long time so I have seen many changes in China, but the most visible ones must be transport. On my first visit there were no cars other than black government limos and very old buses; everybody else was on bicycles. At the first breweries I visited, all the employees were still in Mao uniforms.

There were over 900 breweries then. That was a challenge, to identify the important ones. Today, there are less than half that number and, of those, half are owned by 10 multinational companies, which makes the picking and choosing that much easier. The same is true for the flour milling industry.

Agriculture has probably changed less than any other sector in China. Although millions of people have left the countryside to migrate to the cities, the average size of farm has stayed static. Without new varieties and ever increasing water, my feeling is that Chinese agriculture will not be able to feed the growing population.

The other major change is diet. There is now a demand now for chicken and beef, milk and bread which has totally changed the requirements of the countryside. The demand is now for wheat, not rice, and that is a major cause of the rise in world prices.

Steve Gilman: The growth and development in all cities (whether Tier 1, Tier 2 or Tier 3) has been startling. The rise in economic consumerism has been significant in all top 40 cities. The ever-improving legal framework has been significant, but needs applying equally throughout the country. The quality and educational background of all Party officials, whether mayors or party secretaries, has changed the landscape of doing business in China.

How has your own business in China developed over that time frame?
BF: Most of my business in China has been promotion of UK agriculture. To be frank, I have seen many more disappointments than successes. The biggest stumbling block was that everything in the early days of opening-up had to be done through joint ventures. Things have improved now that it is possible to set up wholly owned companies.

I have worked with CBBC to promote the livestock interests in China and negotiated the protocols along with the UK representatives. To say that it has been frustrating would be the understatement, as every time we were close to completion of a protocol, there would be an outbreak of some major disease, such as foot and mouth or swine fever, which put the job back another three years!

SG: As a retailer, the change from being a partially deregulated industry to a fully de-regulated industry [has been the biggest change]. This has allowed B&Q China to open swiftly and successfully across 28 cities. This de-regulation has been mostly advantageous, but combined with tighter laws affecting international retailers, has also caused more bureaucracy.

Are you optimistic about China’s future?
BF: I am extremely optimistic about China’s future. China will have a labour bank which will compete on the world scene for at least the next 20 years and keep the country competitive. China is also led and controlled by very able statesmen who certainly see the global stage and will work it to the best of their ability.

SG: In general, how can you not be optimistic about China’s future? The sheer scale of the GDP growth, the rise of consumerism in a significant part of the population, and the continuing growth in manufacturing in the country all bode well for the future. There will be hiccups along the way but as the 19th century was Britain’s golden age, and the 20th America’s, then the 21st will surely be China’s!

What are the key challenges facing China?
BF: The biggest challenge facing China in the future will be water and how to tackle water shortages. The second biggest will be keeping the rural population happy as the wealth of the urban population continues to grow.

SG: There are many challenges for China:
• How do you balance better wealth between rich and poor and east and west, and ensure there is not civil unrest?
• How do you maintain 8 per cent plus GDP growth and reasonable inflation when the US and Europe are entering recession?
• If China is to ‘grow old before it grows rich’, and I think that is the case, how does the country continue to be a manufacturing powerhouse, and look after its increasingly older population?
• Will there be a solution to the ‘Taiwan problem’?
• Will China take its rightful seat at the top table of world politics, and will the country exercise its increasing power and importance in a benign and positive way?

What changes have you observed in CBBC?
BF: CBBC has moved from being a very political company to a much more business-focussed company. Its strengths have always been its contacts and the fact that it can open doors that very few others have been able.

The great strength of CBBC since I joined has been the calibre of the presidents, each one with his own strengths but all have been fantastic leaders and diplomats.

SG: CBBC has changed significantly from being a “supporter” of British Chinese business and relationships to a instigator, shaper and catalyst for change with the new Board structure and remit. It will be interesting to see if the increasing commerciality of the CBBC moves British business and relationships further and faster than before!

What more would you like to see CBBC doing?
BF: CBBC will become a very powerful voice in China with its coverage of offices and its change of direction. It is still looked upon by the Chinese leaders as the British organisation which they can fully trust and rely upon.

SG: CBBC is now a ‘front foot’ organisation, leading the way on the commercial agenda of the UK in China. I would like to see an even more pro-active CBBC in the future helping to ensure UK takes an “unfair” share of China’s growth in the future, helping re-address the ever-widening balance of payments, but not forgetting that our heritage is as an organisation that has supported the ever-improving relationship between our two countries and needs to continue to be “expert” in this as well as taking a more commercial approach.