Liz Truss on the UK-China Trade Relationship

Politico hosted an interview today with UK Trade Minister Liz Truss. Anna Isaac of Politico asked Minister Truss about a number of trade issues. The following are the questions and answers related to trade with China.

Anna Isaac:

Let's start with China, and now you said last week, of course, that Britain had been too soft on China for too long. And I wondered if you could expand on that point and explain some of your thinking.

Minister Truss:

When the World Trade Organization was set up in 1995, China was a 10th the size of the US economy. We're now in a position where China is much more economically powerful, and yet it's still classed as a developing country, according to the self designation, but according to the World Trade Organization. And there have been many practices, whether it's forced technology transfer, IP violations or unfair industrial subsidies that haven't been transparently declared, where a blind eye has been turned, in my view, for too long, not just by the UK and the EU, but by the rest of the world. And I'm determined to work with like minded partners to make the rules of the WTO work, and also to make those rules tougher because if people don't have faith that the trade we're engaging in is fair, they will lose faith in free trade. And that's very important to me; free trade has been a hugely positive force, lifting millions of people out of poverty, improving everyday lives across the world, but we have to fight to make sure it is properly rooted in fair trade.

Isaac:

Absolutely, and as you're very aware some of your parliamentary colleagues are facing sanctions from China at the moment. And so would you say that that's toughened your stance as well, so the wider political situation as well as the important trade context because of course you have to pull together the trade strategy, but also a security focused mindset too.

Truss:

Well, I stand by my colleagues who have faced this appalling treatment by China. And of course we have seen horrific things taking place in Xinjiang. We've seen the issues over Hong Kong and my colleague, the Foreign Secretary, has been very much dealing with that and taking action on that. But to me, as well as those specific violations, there's a broader issue here about economic coercion and the use of economic power to achieve things, and it is right that democratic countries within the WTO, and our allies who believe in following the rules, do seek to get changes to the way the organization works, and I think now is the right time, we've got a new director general, Dr Ngozi, who's incredibly energetic, we've got a new administration in the US who wants to work with other countries, and we really do need to make the WTO work fairly. So yes, there are clearly issues with China, and with the sanctions that have been placed on my colleagues. Fundamentally, this is an issue about making the global trading system work and giving people faith that the rules are being followed.

Isaac:

That's really interesting points about how to address it at a multilateral level. I wonder though if you could address the point of the bilateral relationship, particularly looking at investment, and tell me whether or not you have received any pressure at all from number 10 or other Cabinet colleagues to try and pursue a more open dialogue with your trade counterparts in China.

Truss:

We believe in trade as a force for good, and of course, we continue to trade with China. It's an important market for our exports, there is Chinese investment in the United Kingdom. I think the key thing is about not becoming dependent and making sure that we have a multitude of trading partners, that's one of the reasons why it's so important that we're striking new trade deals with the likes of CPTPP, working with other parts of the world, I just recently launched a consultation on India. So it's important that we aren't dependent on investment or exports or imports from a particular part of the world. And it's also important, and this has been done recently by my colleague Kwasi Kwarteng, but we do look at investments through the light of security as well, and that we're not endangering our national security through the investments in the UK.