Following is the transcript of a CNBC interview with Lord Sassoon, Chairman of the China-Britain Business Council. The interview was broadcast on CNBC on 21 March 2017.
All references must be sourced to a "CNBC Interview".
Interviewed by Eunice Yoon, Beijing Bureau Chief, CNBC at China Development Forum 2017.
Eunice Yoon: I just want to get your thoughts on the messaging or the G20 finance ministers meeting on protectionism. Could you give us your thoughts?
Lord Sassoon: Well I am here in Beijing at the China Development Forum as you know, so I haven't been studying in detail what's been going on in Baden-Baden. But it's interesting talking to, particularly to the Chinese that of course they're not happy with the dropping of the references to free trade and combating protectionism. So I think they very much stand where the British government stands as still wanting to champion free trade and investment consistent with President Xi's speech in Davos. And so there's been quite a lot of talk aimed at the US about what has being going on in the G20.
EY: And as you said there was a lot of talk it's been aimed at the United States a lot of people criticizing President Trump. At the same time, we know here in China, China has been accused itself of being very protectionist. So should China take some of the responsibility as well?
Lord Sassoon: Well I think of course there's a difference between the rhetoric and delivery in many countries. You know the great thing is that if we take, which we should do, President Xi Jinping literally from his Davos speech then as business people we take great encouragement from that. But we will be pressing very hard to make sure that the Chinese live up to that.
EY: It seems as though in the Western world we are hearing voices that are more critical of China that they're getting more concerned about trade and market access especially European companies, American companies. Do you think that's the right track to take?
Lord Sassoon: Well I still think China is continuing to open up to foreign countries. So I think it's that - foreign companies - so I think it's a question of, not the direction of travel, but the speed of travel. And from a U.K. perspective, as we leave the European Union, we now have the opportunity to start bilateral trade talks with China and other countries so we'll be pressing very hard bilaterally to see what we can achieve for our companies to speed the opening up process. So of course, business people always wanted to go faster. But I think the direction of travel remains in the right direction.
EY: So what is the best way to deal with the Chinese?
Lord Sassoon: Well I think it's a lot about who they trust for long term relationships. That's the start of it so that the companies that I see here at the China Development Forum, many of them, the individuals, have been doing business with China for 20 years or more. And I think that, this may be hackneyed but it's you know it's it still remains true, but they want to see people who are their friends and they trust that they get to know in conjunction with great companies that have something to offer in this market either for consumers or in technology or in professional services. So it's that combination.
EY: Right after BREXIT, we heard a lot of concerns that some of the investment from China wouldn't necessarily go to the U.K. that there could be some diversification to Europe instead. Have any of those concerns become a reality?
Lord Sassoon: We've seen absolutely no evidence of that yet. I mean the first, of course, a big endorsement of Chinese investment into the U.K. after the BREXIT announcement was the Hinkley Point nuclear power station. I can't think there's any big Western country that would permit investment of that kind, and I think that's a great strength of the U.K. and it indicates that the U.K. is still going to remain as open for Chinese investment and that Chinese investment is still flowing to the U.K.. We've since then, we've seen a couple of weeks ago a very large further real estate transaction in the city of London so I think the signs are that it's business as usual.
EY: So it does seem as though this current administration is not as welcoming of Chinese investment as previous administrations?
Lord Sassoon: Well I wonder what the evidence for that is, I mean Theresa May took a pause, reviewed the Hinkley Point investments, and then after a few weeks said that it should go ahead. So if you welcome investment in nuclear power I think you are as welcome as any country in the world. So I know there is a feeling around and we've heard it here from one or two speakers in the forum in Beijing this weekend that suggest somehow that the U.K. is there with the U.S. bracketed as retreating from globalization. Well it's not my role anymore to speak for the U.K. government but all I see from the government in the U.K. and from British businesses is more of a global outlook and that's two-way both welcoming further investments into the U.K. but also being even hungrier to invest more in countries like China.
EY: How do you stop BREXIT and any uncertainty around it from becoming a deterrent to Chinese investment?
Lord Sassoon: Well I think the one area in which clearly there are difficult issues around financial services. I mean we've seen for example in manufacturing and in the motor industry the Japanese investors have been announcing big new investments both Nissan and Toyota, so I mean and that's not one for the Chinese because they're not big manufacturers in the U.K.. So I think for China in the U.K. they've principally be making investments in high tech related industry, real estate companies, utilities, there's no reason why that shouldn't continue. That's not affected by BREXIT. Of course the Chinese banks and securities companies in London will be asking, they are asking the same questions that all foreign financial services firms are asking in London. And all I can say is I was out here in Beijing very soon after the referendum with Philip Hammond the chancellor, he answered questions for the chief executives, the chairman, of a whole range of financial services companies in Beijing very directly and made it clear that maintaining London's position with passporting access to the EU was absolutely top of his agenda.
EY: Theresa May has been invited to a conference here, One Belt One Road, which is very important to the country. What kind of role do you think the U.K. will play in that initiative?
Lord Sassoon: Well I think the U.K. will continue to play a leading role all on One Belt One Road. I mean we were very pleased at the China-Britain Business Council that we were able to produce the first national report on belt and road. And actually I presented it to President Xi Jinping when he came out from under his state visit so to U.K. British business belt and road is not a new topic and our government really understands the importance of this as you can see perhaps from the early membership of the AIIB. Now, belt and road is much bigger than that, but the UK government really understands this is win-win territory for British business. British financial services, professional services, engineering design married up with Chinese construction and engineering muscle. Fantastic win-win.