- Reuters/POOL New
All British eyes were on China this week as President Xi Jinping flew into Britain to forge a number of huge partnerships that will see £40 billion ($61.9 billion) worth of investment flood into the UK.
But the political pomp, the major deals sealed, and some significant developments in Sino-British relations have been marred by protest. On the first day of Xi’s trip this week, over 200 demonstrators booed his journey to Buckingham Palace with Queen Elizabeth II in protest over China’s humans rights record.
British businesses may lose out on some lucrative business opportunities because of their “phobia” over dealing with Chinese investors and the West’s habit of turning “everything into a human rights issue,” according to one of China’s most prominent media moguls.
“A lot of people in the City or even the UK are scared of investment in China,” said Dr Johnny Hon, an entrepreneur, venture capitalist and film, TV and theatre producer, to Business Insider in London.
“There is a phobia from some people but we have the capital, we have the investment and we are the right people to do business with,” said Hon. “With our investment, we’re able to help Britain grow new entrepreneurs and build up companies that are looking to expand overseas. It’s human nature for people to be fearful of people or cultures that are different to them but China partnering with the UK is a good thing.”
“There is no one universal formula for human rights”
- Lianna Brinded/Business Insider
Hon is is the Founder and Chairman of Global Group, which assists UK companies expanding into Asia and Chinese firms looking towards the UK and European markets through offices in London, Hong Kong and mainland China. But he is perhaps more famous for his media ventures.
He was an Executive Producer for the George W. Bush biopic ‘W’, directed by Oliver Stone, as well as the China and Hong Kong box office hit “Protégé.” He was also the Executive Producer of “Da Ren Wu” (2006-07), which was one of the most successful TV drama series of that year in China.
Coupling his investment and media experience, he is now also a director of Infinity Creative media, the UK TV production studio chaired by the former Channel 4 CEO, BBC chairman and ITV executive chairman Lord Michael Grade. He is there to help the business open up connections in mainland China and Hong Kong.
For example, he has already worked with Lord Grade to bring back the legendary musical Sunset Boulevard back to London’s West End and will try and take that show to mainland China.
But he says that many other businesses are not taking Chinese investors up on deals because of “the human rights issue.”
“I think it’s hard to talk about because each society is different and has different values,” said Hon. “There is no one universal formula for human rights and it’s wrong to judge one whole society based on the perceptions of one or two incidences. Every society has its own problems.”
“Discrimination can work both ways. For example, when some investors want to buy into an IPO in the UK, investment bankers ask ‘why are all these investors Chinese?’ Some of us have British passports too but they say they want more investors with the surname like Mr. Davidson, not all Mr. Chan or Mr. Hon. But we don’t blanket that type of treatment across all of the investment space in Britain. It doesn’t help how the Western media portray isolated events in China either.”
- Thomson Reuters
Hon used the example of when China got the news that it won the Olympics bid and one million people celebrated in the streets. 400,000 went to Tiananmen Square and he said the West’s way of portraying the event was a stark contrast to reality.
“There were Western reports that said that the crowds were being forced to walk in one certain direction and this was showing how the Chinese are not allowed to celebrate freely and that they didn’t have the freedom to celebrate how they want,” said Hon.
“But then, when I went to watch a Chelsea match with a doctor friend of mine in the UK, when the game had finished, we wanted to walk a certain way but police on their horses forced us all to walk in one direction and away from our route yet that wasn’t considered as a breach of human rights. It was just crowd control. It’s easy for everyone to make something into a human rights issue.”
China and Britain helping each other to grow
Hon is hoping that people will start focusing on business opportunities instead of the protests that surround China’s tour in Britain this week and talks about a country-wide slow down.
Official third-quarter GDP figures put growth at 6.9%, beating analysts’ expectations. But reports show that investors don’t necessarily believe the data. Hon says that the economy is so large and grown so quickly that “it is natural there is a bit of a slowdown” and “we can’t expect China to be growing at the same rate forever.”
While the economy seems to be slowing down, Hon was keen to point out that the booming middle class is creating major opportunities for Western companies seeking partnerships in the entertainment industry. China’s middle class has grown by more than 200 million in a decadeand Hon says that this is fertile ground to tap into.
“The growing middle class means brands, entertainment, and IT are really in demand and on the entertainment side – business is booming,” said Hon.
“China’s box office for first 9 months of the year was around $5.9 billion and in half a year China will overtake the US as number one in the world.”
He says the way Britain and the rest of the Western world can get a slice of the action is by bringing over higher quality services to bridge the demand from China.
“China has the money and the ideas but we lack the innovation and technology from Western companies. The middle class want better quality and trusted brands,” said Hon. “We may be able to make movies but we don’t necessarily have the right expertise or the special effects experience like in Hollywood to push entertainment to the next level. That’s why we need Western companies to come over and partner with us to make worldwide hits.”
“You look at how popular Kung Fu Panda was across the world. It’s not like China doesn’t know how to draw a panda, of course we do. But the animation and effects were on another level. We need that here.”
Hon talks a good game on why the West should partner more with China – after all, bi-lateral talent and monetary investments could help all economies grow. However, the political protest over human rights and a slowdown in the economy seem to be a couple of major issues for some investors.
But Hon is optimistic that attitudes are changing and this week’s governmental tour of Britain shows how China is opening its doors major foreign investment – we’ve just got to let them in.