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Twenty years after he first coined the acronym, only China among the BRICs has so far lived up to its early promise. Despite this, the multipolar world Jim O’Neill envisioned feels just as relevant. He is doubtful that post-Brexit Britain is prepared for the change in mindset and practice this geopolitical transformation demands.

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After Huawei, Aukus and recent media reports that suggest China could be blocked from the Hinkley Point and Sizewell projects, have we reached an era-defining moment for the UK’s relationship with China? And in doing so, how rational is the UK being?

It is hard to entirely consider the answer in purely logical or commercial terms because a lot of this broader shift commenced with the Huawei decision, which itself appeared to be quite significantly influenced by the US and the pressure that came with it. In truly objective terms it's hard to consider because, of course, it's the same political party, in power under different leadership, which deliberately encouraged Chinese investment in Hinkley Point and Sizewell. So the decision making is due to different personnel and with it different nuances and perhaps the relative weighting of security matters versus economic matters.

What makes it especially hard to think about in terms of economic logic is the UK appears to want to be a much bigger producer of nuclear power as part of its climate commitments. When you say an "era defining" moment, I'm not sure because different political leaders and a different set of circumstances could easily result in a shift again. So all-in-all it’s hard to fathom but superficially it seems like a big shift now.

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It's argued that China’s actions and approach to the outside world is shaped by its experiences of the last century, its so-called “century of humiliation”. Does the UK and the West really grasp this and what difference could it make if they did?

Yes and no. Obviously, anyone that looks at how China has approached the past few decades realises their sense of history and the associated feelings of humiliation. So, those in the West who truly focus on these issues do grasp it. The problem is that those that do are very few and aren’t close to the centre of decision-making today. With this there appears to be a large number of casual observers that simply and often naively assume China “wants” to be like us, politically and in other ways. This has been a big mistaken judgment and it means that when China makes decisions that seem alien to western decision making and styles it shocks such observers.

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Greater appetite for public ownership and government bailouts, increased centralization and the rise of nativist populism, all sound like pages from the China policy playbook. What other lessons should the UK be learning from China?

The biggest things we should be trying to learn is that China sticks to a broadly clear path of what its priorities are and doesn’t tend to lurch from one issue to another. This applies to so many areas of policy, crucially including counter-cyclical monetary and fiscal policy but also infrastructure policy. Of course, this is definitely easier when you are not facing truly open democratic elections every few years. But it is something that we must see if we can adapt aspects of, as our own decision making seems very driven by the 24-hour news cycle and what will please the electorate today and tomorrow rather than what is necessarily needed to boost our productivity performance and growth.

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Why do you think China and the rest of the BRICs have been so cool about the idea of creating a Global Health and Finance Board? On the 20th anniversary of the paper that first proposed the group, what does this say about the ambition and potency of the BRICs?

This is something I am quite disappointed and confused about. I have been deeply involved in the creation of this idea, serving on the independent commission chaired by Mario Monti and set up by the pan-European arm of the WHO. It is confusing because the implementation of such a board could be structurally revolutionary in reducing the risks of similar devastating global health crises like Covid-19, and potentially especially important for the emerging world.

My impression is that China might not like the idea because, A: it's an idea embraced and endorsed by the US, UK and most of the G7, and/or B: because they think it could be another avenue for overseas observers to re-analyse the source of the Covid pandemic. Neither are in the slightest bit logical and it is disappointing.

Frankly, it coincides with a few months where the Chinese government appears to be introducing a lot of new policies at home which threaten aspects of growth, and I have some concerns that for the first time in over 30 years the Chinese outlook is less stable than I had presumed. I also worry whether the President is getting the soundest advice, as China needs to make more friends overseas not bring scepticism about its international openness.

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Further; In a TV interview during the BRIC meeting this summer in India, you said in the next decade India could overtake China to become the leading BRIC economy.

I think this perception needs nuancing. What I was really saying is that in terms of GDP growth rates India could grow by more than China in the next decade as its demographics remain very powerful, whereas China’s are turning less positive and, of course, there is more catch-up for India. In theory India should be able to grow faster going forward, but China is more than five times bigger than India so it can’t replace the global impact of China anytime soon.

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Could India replace China as a source of investment in the UK, for example in projects such as Northern Powerhouse? How important are both nations to the long-term interests of the North West region?

India needs to undertake much bigger true reforms to really reach its potential. If it did it could grow by close to double-digit growth rates in the next 10 to 15 years and easily become the world’s third-largest economy, probably replacing Japan. Even if it doesn’t, what happens to India in the coming years will certainly be one of the most important drivers of world growth, albeit less so than the US and China.

It should be remembered that when you’re a $15 to 20 trillion economy, even if you grow at half the rate of a $2.5 trillion one, or even less, you can still contribute more to world growth than the $2.5 trillion one. And of course, for India to be a really big source of net inward investment to the likes of the UK, India would have to raise its domestic savings rates and run balance of payment current account surpluses, like China has done for decades. It can and will become more important in global investment terms. But again, it’s hard to see it becoming as important as China in this and many other regards for the foreseeable future.

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How important is it that the UK gets its relationship with China right and what advice would you give on its engagement strategy?

This is both a tough and a simple question. On the simple part it’s a two-fold answer: Stop thinking that everyone wants – and has to become – a political structure similar to that of the UK to be important to us. It is very naïve and is not going to happen. Second, focus properly on what matters in terms of economic growth.

The tougher part derives from the fact that I approach this as an economist and in the real world, diplomacy, defence and security get in the way of economics. What is really needed for a sophisticated country is to optimize the goals between these complex points. Certainly stop lurching from one extreme to another because it’s hard for others to comprehend and seems to be driven by sentiment and fashion.

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