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UK economy needs to look beyond the eurozone for its solutions

The chancellor’s meeting with China’s vice-premier for economic policy highlights one possible route towards some fiscal stability

Labour may be calling on George Osborne to “bang the table”, and demand that US and European leaders gather together to fix the ailing world economy; but while eurozone ministers are tearing their hair out this week, the chancellor will be looking east.

Wang Qishan, the Chinese vice-premier for economic policy, will be in London for the latest round of the UK-China financial and economic dialogue, and Osborne will be hoping to score a high-profile trade deal or two, and to encourage China to think of the UK when it is looking for offshore centres for trading the yuan, which it is moving slowly towards floating on international currency markets.

It’s well worth Osborne devoting some time to burnishing links with the Chinese dragon, because there’s little sign, so far, that British businesses are managing to find much of a foothold in Beijing. Britain’s exports to China last year were worth £7.6bn. That doesn’t sound too bad until you compare it with the £11bn-worth of goods we sent to Belgium and Luxembourg, or the £16bn to crisis-hit Ireland.

If the UK economy is to drag itself out of the slough of despond, it will need to look well beyond the eurozone, where the sovereign debt crisis is still deepening.

This week alone, the International Monetary Fund is due to rule on whether Greece is hitting its budget targets (it’s not); Silvio Berlusconi hopes his parliamentary rivals will back his latest austerity package despite the fact that in an unguarded conversation last week he said he was planning to quit his job and leave “shitty” Italy; and Angela Merkel is praying the German constitutional court won’t declare the latest Greek bailout in contravention of the nation’s basic law.

Meanwhile, President Obama is due to announce his much-vaunted employment package – about time too, since the US economy created a sum net total of zero jobs last month – but he couldn’t even agree with Congress about when he would deliver the speech, let alone what he’s proposing.

Over canapes with Mr Wang, who’s expecting growth of 9% this year, Osborne may find himself thinking democracy’s not all it’s cracked up to be. © Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds