China-UK dialogue a sign of increasingly sincere ties

China and UK achieved positive results through the Fourth China-UK Economic and Financial Dialogue (EFD), which was held in London on Sept 8 and co-chaired by Chinese Vice-Premier Wang Qishan and UK Chancellor of the Exchequer George Osborne.

The two sides built a consensus on several issues, including coordinating macroeconomic policy development, demonstrating their common commitment against trade protectionism, deepening trade and investment cooperation, and promoting supervision of international finance.

The EFD, founded in 2008, is the only vice-premier level economic and financial dialogue between China and Europe.

Premier Wen Jiabao once said it was "carried out by both governments to develop long-term strategic relations between two countries, therefore its significance is far beyond economy and finance. It means that China and UK are both determined to further develop their comprehensive strategic cooperative partnership".

For the past four years, the dialogue has become an effective platform for two nations to discuss the "strategic, overall and long-term" issues that have occurred in bilateral economic relations, which has great importance, especially amid today's Sino-British ties.

The EFD's strategic significance is threefold.

First, the European debt crisis has pushed the global economy into a possible double-dip recession. The EFD is helpful for promoting communication, understanding and coordination of the macroeconomic policies of major economies in the world.

Second, the EFD reflects the "new mercantilism" of British Prime Minister David Cameron's diplomatic policies, which has strategic importance to his country.

British government has set following factors as priorities: the economy; highlighting the commerce function of the foreign ministry, with emphasis on promoting Britain's trade and economic development levels; and actively seizing trade and investment opportunities to quicken its economic recovery.

Cameron and Foreign Secretary William Hague have targeted emerging economies, including Turkey, India, China and Brazil, as their primary destination. The reform of Britain's overseas offices drawn up by Hague plans to send an extra 50 diplomats to Chinese cities and regions that have witnessed the change.

The UK government has established a "commerce ambassador" team, and China is their biggest public relations target. Trapped in flaccid economic growth but with a high deficit and high inflation, British government has launched a series of anti-austerity policies that society has lashed out at. The public has showed increasing discontentment with continuous protests, which have even devolved into riots.

The pressure on British government to rebalance its economic situation and embark on a road to economic recovery is rising. In the meantime, its traditional economic partner markets still stagnate. The recurring eurozone crisis and the staggering US economy have shifted Britain's economic focus to emerging nations.

Third, the EFD allows two governments to "strategically" develop their relations. Differing from traditional diplomacy, the dialogue is more concerned with comprehensive global economic and financial issues, and in several fields it is explorative and creative.

For example, the dialogue supports the establishment of an offshore yuan center to be established in London, and London agreed to play a constructive role in persuading the European Union to loosen its control on high-tech product exports to China and to acknowledge China's market economy status.

The dialogue is still rudimentary and faces a lot of difficulties, but if these are overcome, it might produce a historic and world–class contribution to global economy. Previously, Britain thought economic and trade cooperation should not be covered in Sino-British strategic relations. The economic dealings between the two sides did not reach the strategic level, but this situation has changed.

The success of the EFD has more or less reflected the mutual interests that require the two countries to strengthen their bilateral strategic cooperation. However, establishing a real strategic co-partnership should not only be based on interests, but also requires mutual sincerity.

Chinese government's support of an offshore yuan center in London and Osborne's austerity policies reflects China's positive attitude towards UK.

Although this support corresponds to China's long-term economic interest, it is much more urgent to Britain, because it is an expert in finance industry. Britain was hit hard by the subprime crisis, and Osborn's austerity policies are facing all kinds of pressure. China, of course, has sent a very positive signal to the market, which provides a certain level of support for British finance sector and even the whole UK economy.

Britain has resorted to "ingenious diplomacy" to maintain its ever-gliding international status since World War II. As an influential power, Britain is renowned for its rich international experiences and global vision. As a permanent member of the UN Security Council, an import member of NATO, the European Union and the G20, Cameron and Hague still emphasize Britain's unshrinking diplomatic ambition, despite its current economic predicament.

Bilateral relations, skillful diplomacy and practical interests are important, but mutual understanding and support is all the more an expression of sincerity, which to a certain extent safeguards the sustainable development of Sino-British strategic relations.

The author is associate research professor of the Institute of European Studies at the China Institutes of Contemporary International Relations. The views expressed in the article do not necessarily reflect those of China Daily.