At a recent launch to welcome a new TUC report — The Way of the Dragon: What can the UK learn from the rise of China and East Asia? — panellists and participants from trade unions, business and academia engaged in a long overdue discussion about the lessons and opportunities of China’s rise. 

Pointing out ways in which government economic intervention has been used in east Asia, and the strong role of state in planning economic activity in China in particular, the TUC report calls for a firm commitment to industrial policy, properly funded and resourced, to rebalance the economy away from finance to manufacturing. 

This is not advocating a return to the traditional industrial policy approach of “picking winners.” Instead it looks outward to global market opportunities. 

The first recommendation is for a major study to be carried out into where Britain could export to China, identifying growth areas in the Chinese economy whose needs Chinese firms cannot meet and where British companies have the skills, technology and experience to meet this gap in the market. 

China’s 12th five-year plan (2011-2015) provides the starting point. 

It lists seven strategic emerging industries which China intends to increase from 2 or 3 per cent of GDP to 30 per cent by 2020. 

China’s GDP is forecast to overtake that of the US in the fairly near future, so this constitutes a sizeable chunk of future global economic growth. 

As the TUC report puts it, “British businesses that seek to export to China need, as a first step, only to look at the (five-year) plans ... there are major business opportunities in China that are advertised years in advance and for which UK businesses could plan.” 

This is not just about opportunities for consumer goods. As the Germans know it is also about machinery, as China seeks to re-equip its existing industries, especially to improve energy efficiency, as well as to create the new industrial “pillars.”

To think only of maximising export opportunities would be a big mistake — Britain has to compete on R&D. 

China is now engaging in a “race to the top,” moving rapidly up the value chain to press at the heels of our core competencies. Aiming to become a leading power in science and innovation by 2020, China is scaling up R&D spending. 

South Korea now spends five times as much on R&D as most European countries in order to stay ahead. Noting Britain’s serious deficit here, the TUC report calls for an increase in the budget of the Technology Strategy Board as well as the creation of a state investment bank. 

The way forward has to be through partnership and collaboration. Given China’s considerable resources and application, it will be hard to compete. 

At the same time, China faces formidable challenges in development. Its need for assistance creates openings for others. 

The TUC favours hybrid public-private partnerships, rather than full-scale nationalisations, citing its visit to China’s Guangqi Honda Automobile Company.

The government, it argues, should be prepared to take strategic stakes in selected companies, for example in the green industry sector, where it is in the long-term interest of the national economy. 

Joint shareholdings may help to bring to Britain some of the $250bn (£150bn) of Chinese foreign investment likely to flow to the EU in the next few years.

So China’s rise offers new opportunities for the revival of manufacturing — so long as Britain invests in skills and innovation. 

Even more importantly, Britain’s industrial place in the world can only be secured by gaining strategic footholds in Chinese markets. 

As one panellist noted, Jaguar Land Rover’s recent investment in a plant in Shanghai is crucial for the survival of the company in Britain. 

Another panellist drew on the example of the Volkswagen plan, agreed in conjunction with the unions, to establish plants in China but with investment returning back to Germany.

As might be expected, the TUC’s report talks up the value of free trade unions, yet trade union co-operation with government and business is the essence of industrial policy. 

China’s trade unions should be bolder but their government links have some benefits. 

Unlike in Britain, union officials have the right to enter the premises of non-union enterprises in order to recruit. The rabidly anti-union Walmart has been compelled to recognise a trade union for the first time ever, and the 12th five-year plan commits to raising the minimum wage by 13 per cent on average each year. 

And let’s not forget anyway that it was the British who sought to destroy a young and very militant trade union movement in China, shooting at striking workers on several occasions in the 1920s.

Successful collaborations and partnerships involve mutual understanding. 

But Britain’s view of relations with China is rather a one-way street. Slow to learn Mandarin ourselves, for example, the expectation is that young Chinese will learn English. 

Panellist Martin Jacques put his finger on the nub, pointing to Britain’s difficulty in escaping its colonial mentality — the assumption that we are a leading nation and that it is up to others to change, not us. 

Britain needs to reorientate towards China and fast. 

Time is running out. The US, Germany and others are ahead of us as China seeks to fill the gaps in its plans. 

General talk about the need for industrial policy is just not good enough. 

The TUC adopts a robust interventionism, with targets and concrete commitments on jobs, R&D and economic rebalancing. 

Our thinking needs to focus more sharply on the specifics. 

In fact we need to think in a different way about the world. Endless ideological criticism of China is a fetter on the creative approach necessary to turn the challenge of growing Chinese prosperity into an opportunity.

Trade unions should do more through education to get the message into the wider movement about the positive value of partnerships with China in creating high-quality jobs and economic regeneration.