Working with China: five-year engagement strategy

Working with China

A Five Year Strategy for Engagement between Scotland and the People's Republic of China

Why China?

China's growth rate in 2011 of 9.2% ^[1] was considered exceptional by world standards. An annual growth rate of 9% over the last decade has tripled the size of Chinese Gross Domestic Product. ^[2] This meant that China is estimated to have contributed to one third of Global Growth.

China is the world's largest goods exporter and the world's second largest goods importer. China also has the world's largest foreign exchange reserves, reaching $3.29 trillion at the end of September 2012. ^[3]

Why Scotland?

Despite the obvious disparities in demographics, geography and total wealth, Scotland has much to offer China. In Scotland, China will see a country that:

• values and harnesses its knowledge and talent with a strong track record in creativity and innovation, especially in the development of new energies; life sciences; creative industries; financial services; and an abundance of premium food and drink
• possesses a distinct heritage, one that is proud of its history and culture
• possesses an education system that has a well deserved reputation for academic excellence
• has universities which are willing to engage together, and with international partners, to undertake joint research projects
• is open for business and is a competitive and strategically ideal destination for inward investment within Europe
• has a strong reputation as a world class host for major sporting and cultural events, such as the Ryder Cup, Commonwealth Games and Edinburgh Festivals

Scotland's Ambition

The 2012-13 once in a decade transition in national leadership in China presents every country with fresh challenges and opportunities for establishing broader and deeper links with China.

The Scottish Government is committed to developing a long-term relationship with China based on shared values, partnership and trust. Since 2006 when Scotland's first China Plan was published, Sino-Scottish relations have gone from strength-to-strength. In the next five years, it is our ambition to broaden and deepen Scotland's links and common interests with China.

We believe that strengthening this bilateral relationship will bring substantial benefits to both countries. China will continue to be offered assistance and support as it embarks on a new phase of its economic and social reform programme. And Scotland will be looking to China for opportunities to help support its economic recovery and future prosperity.

The UK Government and the Scottish Government have signed the Edinburgh Agreement which allows for a vote in 2014 on restoring the sovereignty of Scotland. This agreement legally binds both governments to respect the process and outcome of the vote. Scotland's engagement with China is expected to increase no matter the result.

Scotland's ambitions for its strategic relationship with China complements the Scottish Government's own Economic Strategy. ^[4]

The "Working with China" strategy has four guiding principles that will underpin all of Scotland's dealings with China and against which success will be measured. They are:

• Securing Sustainable Economic Growth - building Scotland's prosperity by strengthening links to China, through increased trade and investment, and more developed links in education, research, culture and sport.
• Respect for Human Rights and the Rule of Law - supporting China's process of modernisation and internal reform and the need to balance the demands of economic development with social justice. Scotland is justly proud of its reputation for ethical business practices, and knows that human rights and the rule of law are key to long-term economic success and social stability. We will continue to share our experiences and values in our dealings with China. For example through Scottish Ministers' championing of climate justice, a key issue for human rights in the 21st Century that is rising up the UN agenda.
• Understanding of Culture - attaching great importance to learning more about China - and for China to learn more about Scotland. Both countries through our Scotland-China Cultural Memorandum of Understanding have committed to developing a profound understanding of each other's country, peoples, history, languages, cultural expression and cultural differences.
• Increasing Scotland's Influence - extending Scotland's outreach and influence to other parts of China. The Scottish Government has established close relationships with the following areas:
  • Beijing
  • Shanghai
  • Shandong province
  • Shenzhen
  • Tianjin
  • Hong Kong Special Administrative Region

The Chinese Government has prioritised the economic development in its western provinces through preferential policies such as land credit, lower taxes and subsidies for manufacturers looking to locate inland. Subject to resources, we will consider how Scotland might look to further areas of potential growth in China, to identify early opportunities to enhance the mutually beneficial relationship already fostered with other parts of China.

Scotland's Priority Areas

The Scottish Government has identified 4 key priority areas to focus its activities and resources in order to deliver its China strategy:

• to increase trade opportunities for Scottish business in China and encourage more Chinese investment in Scottish industry and infrastructure
• to expand and deepen Scotland's education links with China
• to increase collaboration in research and development between China and Scotland
• to promote an innovative and creative Scotland through deeper cultural exchanges and sporting links with China and Hong Kong Special Administrative Region; and promoting Scotland as a destination of choice for Chinese tourists

Where appropriate and as Sino-Scottish relations broaden and deepen we will continue to identify opportunities for exchanges in other fields not specifically addressed by this strategy.

In the remainder of the strategy we set out the specific targets needed to deliver this 5 year strategy.

In the annex we set out an implementation and delivery plan and how we will measure our targets.