Lord Ian Livingston, the UK’s Minister of State for Trade and Investment, is in Australia this week for the B20 conference.
One of the things he’s talking a lot about is the investment in Britain by China – Australia’s biggest trading partner.
Speaking in Sydney today, Livingston said the UK was just as interested in Chinese investment as Australia.
He said Chinese money was starting to flow into the UK’s economy at a growing rate and the G7 nation was taking notice.
Mainly thanks to the resources boom that has fed Chinese demand, Australia’s two-way trade with China dwarfs Britain’s, at $125.1 billion in 2012.
Britain, by comparison, had $US70 billion in trade with China in 2012 and is aiming to grow that to $US100 billion by next year.
“China has invested more in the UK in the last 18 months than in the previous 30 years in aggregate,” Livingston said today.
With Chinese investment growing in the UK, Livingston said its physical proximity to the Asian powerhouse is a big factor which Australia shouldn’t forget.
“Beijing is as close to London, if not closer, than it is to Sydney,” Livingston said.
“It’s not just your back garden, it’s very much a country that we deal with day-to-day.”
The economic reforms currently being rolled out in China, Livingston said “will take China through to the next phase of growth”.
“I think China has been remarkable for managing its economy,” he said, adding unregulated issues like its shadow banking system is one risk but “there is risk in any economy”.
Since 2005 Australia’s federal government has been attempting to strike a Free Trade Agreement with China. It finished the 20th round of negotiations in May.
Australia’s resources sector is also heavily reliant on Chinese demand and the country’s stunning growth has been the major catalyst for Australia’s recent mining boom.
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