Liang Qi-chao,enlightment thinker and reformist of modern China, once defined China’s triple identity as China in China, China in Asia, and China in the World. After the Second World War, the UK actively carried out its “Three Circles Diplomacy”, which also reflects the triple identity of the UK: the UK in the UK, the UK in Europe, and the UK in the world. So the China-UK relationship has 3×3=9 possible interactions. Of course, diplomatic relations emphasize reciprocity, so the three straight combinations of China-UK relations - the bilateral combination, the China-Western combination, and the international combination, are the ones with practical significance. These three combinations suggest that China-UK cooperation has three major strategic features:

First of all, it is a model of mutually complementary cooperation. The UK is the birthplace of the industrial revolution, but now its problems of aging infrastructure and shrinking industry are serious, and the financial service industry represents three quarters of its non-public economy, while China is a new industrialized country with late-mover advantages in high-speed rail, nuclear power, and other areas of infrastructure. According to the infrastructure outline released at the end of last year by the UK, 33 billion GBP will be added each year to investment in infrastructure, but under the pressure of the debt crisis and the financial crisis, this commitment will not be easy to fulfill. At the same time China is now facing over-heating in its domestic infrastructure market. The combination of these two factors represents a great opportunity for China to take its investment abroad.

With its developed financial service industry and its position as a world financial center, the UK is the natural partner for China to achieve the internationalization of the RMB and develop its financial service industry. To date 51 Chinese companies have gone public on the London Stock Exchange, with a market value of almost 30 billion USD. This June the People’s Bank of China and the Bank of England reached a currency swap agreement of 200 billion RMB, which is the first currency swap agreement between China and a major developed country. The UK is becoming the RMB offshore transaction center.

Secondly, it is a model of Chinese-Western cooperation. Before visiting China, Prime Cameron expressed in an article that the UK will be the strongest supporter of China in the Western world, and appealed to China to make a new free trade agreement with EU.

The words of Cameron will be put to the test by time and practice, and some of them have already been tested by reality. Against a background of European debt crisis, facing shrinking demand and imports, European countries are more prone to trade protectionism. In these difficult conditions, China-UK trade continues to increase. According to China’s statistics, in 2012, trade in goods between China and the UK was 63.1 billion USD, representing year-on-year growth of 7.5%, of which China’s exports to the UK were 46.3 billion USD, year-on-year growth of 4.9%, and China’s imports from the UK were 16.8 billion USD, year-on-year growth of 15.5%, ranking first among all China’s trade partners in EU.

A brighter area is investment. The year 2012 could be called “The Year of Chinese Investment in the UK”. According to incomplete statistics, in 2012 China launched 10 investment and M&A projects (including participation), with a total value of more than 8 billion USD, which exceeded the total investment and M&A value from 2009 to 2011. Several of these projects represent major breakthroughs in high-profile areas.

This confirms that powerful Chinese enterprises can make use of the UK’s strengths as a world financial center and seek to finance and go public in the UK. As a global capital, information, and logistics center, the UK can serve as springboard for Chinese enterprises to seek investment and M&A opportunities and expand into Europe and the rest of the world. China-UK cooperation, as the forerunner of Chinese-Western cooperation, is not currently distorted by the twists and turns of political relations, and this is commendable.

Finally, it is a model that sets an example of global cooperation. The British Empire once truly governed the world. There is a saying: see what the Americans do, and hear what the British say. Due to the special relations between the US and UK and the global wisdom of British people, cooperation with the UK represents a bridgehead for China to enter Europe, the British Commonwealth, and the wider world. Cameron pointed out that some countries are building walls against globalization, while the UK, as the mother of free trade, will actively support China’s participation in a new and more vigorous globalization. Indeed, for historical reasons English is the international language and London is the world financial center. With such advantages, the UK exerts a great influence in the making of international rules and standards and the pricing of staple commodities, and has obvious strengths in the new generation of information technology, advanced materials, photovoltaic industry, and high-tech services. The UK is an ideal cooperation partner for China in a new round of competition and globalization.

Whatever has happened in the past, in view of these three major strategic factors, cooperation between China and the UK has irresistible momentum. It would be a cause for regret if either China or the UK should miss the opportunity.

Edited and Translated by Kong Defang, People's Daily Online