Bernard Ginns: Cities paying the price for China’s economic progress

THE industrial revolution might have created powerful great cities in the North of England and a legacy of lasting prosperity, but it also wrought devastating damage on the physical environment and the human beings that lived and worked in it.

Streets were filled with smog spewed out from filthy factories and the water pumps on which people relied often contained deadly chemicals.

We take for granted today’s environmental standards, which are blessedly high in many parts of Yorkshire.

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Elsewhere, others are far less fortunate. Consider those in China who are paying a price for all the economic progress being made. Earlier this month, I met Yang Guo Ping, a leading Chinese industrialist. He is chairman of Dazhong, a Shanghai-based conglomerate that spans taxi services, gas supply, construction, financial services and healthcare.

He told me that Shanghai and other Chinese cities are suffering the same air pollution that Britain experienced during the industrial revolution.

While a tragedy for those whose lives are ruined by the poisonous byproducts of economic progress, this situation also creates business opportunities for UK entrepreneurs in areas like energy and environmental protection, as well as transportation and logistics.

As Mr Yang pointed out, “there is a very large potential market here.” The actual size of the opportunity is difficult to comprehend at times.

Martin Jacques, a leading author, academic and authority on China, has a helpful illustration.

He said that the republic has grown from being one twentieth the size of the American economy in 1980 to more or less parity today.

He told me that by 2030 the Chinese economy will account for one third of global gross domestic product, making it twice the size of America and even larger than the economies of America and Europe put together.

“We are moving into such a different world to the one we are accustomed to,” he said.

Until recently, China was thought of in the West as being backward in terms of economic development, not to mention mysterious. As a consequence people put their noses up at it, added Mr Jacques.

Businesses now must grasp the huge importance of China, he said, ranging from investment in UK infrastructure, to the rise of the renminbi as the new global reserve currency, to markets for manufactured products.

“There are so many ways that such a diverse economy is going to impact on us,” said Mr Jacques, who is presenting a guest lecture at Leeds Metropolitan University on July 1. He added: “We need to step up to the plate. At the moment, Britain has been slow off the mark in Chinese trade. It is expanding quickly but from low base.”

The most advanced country in Europe for trading with China is Germany, unsurprisingly, which has a strong and competitive manufacturing base. Its leaders also recognised the strategic importance of China at an earlier stage than us.

British businesses need to start building up presence, understanding, knowledge and contacts in China if they are to succeed, said Mr Jacques.

The visit this week of Li Keqiang, premier of the People’s Republic of China, should help raise awareness.

Writing in The Times yesterday, he said: “The UK is a great country and an important partner of China.

“My visit has a threefold purpose: first, to discuss ways to deepen cooperation in various fields and thus spur the growth of our respective economies; second to present the real China so as to change misperceptions and ease misgivings; and third, to draw on British perspectives and experience. Drawing on our complementary strengths, there are many areas for collaboration. We look forward to win-win engagements.”

China is changing fast.