The Telegraph:
The Prime Minister said China needed to understand what was at stake and he urged its leaders to open its markets.
In a speech in Beijing Mr Cameron explained that for the world economy to be able to grow strongly again – in particular the struggling Western economies – China had to start spending more and open its markets.
In a reference to the low valuation of the yuan, which has helped China’s exports and allowed it to build up massive reserves of foreign currency, he said: “The truth is that some countries with current account surpluses have been saving too much while others like mine with deficits have been saving too little.
“And the result has been a dangerous tidal wave of money going from one side of the globe to the other. We need a more balanced pattern of global demand and supply, a more balanced pattern of global saving and investment.”
Addressing students at Peking University, Mr Cameron admitted that China was already moving towards increased domestic consumption and looking at introducing greater “market flexibility into its exchange rate.”
But he added: “This cannot be completed overnight, but it must happen. Let’s be clear about the risks if it does not, about what is at stake for China and for the UK – countries that depend on an open global economy.”
Mr Cameron said if Europe’s openness to China is to be maintained, it must be clear that “China is open to Europe”.
And he said China can take a leading role now on dealing with economic problems as the world emerges from recession, but warned countries could retreat into protectionism as they fight unemployment and slow growth.
He added: “Countries will increasingly be tempted to try to maximise their own growth and their own employment, at the expense of others. Globalisation – the force that has been so powerful in driving development and bringing huge numbers into the world economy could go into reverse.
“If we follow that path we will all lose out.”
Mr Cameron will now fly to South Korea for a meeting of the G20 group of leading nations. There is will repeat his argument about the need for a more balanced global economy and hope to make progress with an international understanding.
Mr Cameron also today explained to the students the merits of the British democratic system in contrast to the Chinese one-party state, which lacks both a free media and independent judiciary.
And he said he was right to raise human rights issues because “the British people expect us to” and there are “sincere, and deeply held concerns.”
Last night, at a banquet with Premier Wen, Mr Cameron raised the issue of the Liu Xiaobo, the Nobel Peace Prize winner who has been sentenced to 11 years in prison because of his calls for political reform.
In his speech Mr Cameron made it clear that people should be able to speak freely, and it is understood that that message was conveyed to Premier Wen.
The Prime Minister told his audience today that with its new economic power, China has new “political responsibilities.”
The country could no longer stay on the outside of the biggest discussions going on in the world – whether it be climate change, terrorism or debt.
He said: “China has attempted to avoid entanglement in global affairs in the past. But China’s size and global reach means that this is no longer a realistic choice.”
In a question-and-answer session after the speech one university student – who was not Chinese – accused Mr Cameron of acting like other Western leaders by coming to China to deliver a “lecture” on how the country should be run.
Another student pressed the Prime Minister about last week’s Coalition decision to raise tuition fees. She remarked that it could lead to less foreign students being able to study in Britain.
Mr Cameron issued a surprising reply, claiming that raising fees for domestic students would help keep a lid on the sums being paid by foreign students.
Mr Cameron said raising tuition fees will mean ”two things”
He said: “’It will make sure our universities are well funded … and we won’t go on increasing so fast the fees for overseas students.
”In the past we have been pushing up the fees on overseas students and using that as a way of keeping them down for domestic students. We have done the difficult thing. We have put up contributions for British students.
“Yes, foreign students will still pay a significant amount of money but we should now be able to keep that growth under control.”
Posted By Pat Dollard
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