Having previously visited China way back in November 1978 when I was still President of the MLP, this time round I was able to gauge the massive changes underway as well as the great strides forward that this country has made.

Although a week in China does not make you a China expert, our visits to Beijing, Xian and Guangzhou helped us deepen our understanding of why and how this massive country is shaping up its own economy and that of the rest of the world with the same dynamism and force with which the American economy, as well as its industrialisation process and expansion, did over past decades.

Our visit to China coincided with various interesting China-linked developments :

• the passage of the anti-secession law

• the China visits by US Secretary of State Condoleeza Rice and the DPRK Prime Minister

• the EU’s approach to the 15-year-old ban on selling weapons to the mainland

But definitely the core issue that constantly lurked in the background in our meetings and discussions with our hosts was Beijing’s growing diplomatic and economic influence – as well as the folly of those who might attempt, and are attempting, counter-productively to surround and isolate China, possibly out of fear of its emerging clout and muscle.

I personally think that the over-reaction to the anti-secession law was misguided and pushed forward by pro-Taiwan interests. This was particularly so when it came to the link with the lifting of the EU arms embargo, and even more so given that only hours before resorting to its flip-flop policy, the EU had Solana claiming that it was only fair that such an embargo should be lifted – sentiments which were also earlier echoed by British Deputy Prime Minister John Prescott.

To my mind, the anti-secession law was not as portrayed in certain sections of the media as a blank cheque for the Chinese military, but a mere codification of a position that had long been adopted by China to safeguard its sovereignty and territorial integrity. It was also to enforce the One China policy by refraining from allowing “Taiwanese independence” or allowing Taiwan to secede from China under any name or by any means.

This was an issue which I personally raised during our meeting with the Chinese Foreign Affairs Committee on the first day of our programme at the CPPCC National Committee headquarters.

They felt that the embargo was both politically unfair and not consistent with the high level and strategic relationship that they had with the European Union.

Although they disagreed with the US over-reaction to their anti-secession law, they were still interested in consolidating their relationship with the US authorities since they believed in a strong sense of stability in relations with their major political and economic partners. They felt that there were still areas where the two sides could cooperate together, such as in the case of the war against terrorism and the DPR of Korea de-nuclearisation issue. I personally suspect that America’s greatest fear is that China’s growth and emergence could threaten or impair US “hegemony” in the Asian-Pacific region as well as that the US is still interested in selling weaponry to Taiwan.

What struck me most during our China visit was the manner in which they have managed their transition from a command economy to one driven by market forces without reducing the importance they attached in the past to balancing income distribution, as well as focusing intensely on such key sectors as education, health and research and development.

Our visit to the Lenovo IT factory coincided with the Chinese take over of the IBM business computer section of the company in spite of initial negative reaction from certain lobbies in the US. We were provided with a state of the art presentation by their Officer for Government Affairs in which we came to learn of how they have secured for themselves 30 per cent of the whole Chinese market. They even have a Silicon Valley office which, although described as a mere “window” office was overtly intended to constantly see which way the wind was blowing in the IT sector!

The company prided itself that it has been chosen among the 12 top suppliers for the Olympic Games in China. Talking of the Games one can tell how many projects are currently underway. And yet I do not have the slightest doubt that the Chinese will manage to meet their deadlines on time.

While Xian gave us the opportunity to witness the marvels of the Terracotta Warriors, which was a breathless experience in its own right, Guangzhou proved to be the economic power-house that many described it as being.

The Guangdong province gave us a particular welcome, since we were reciprocating their very successful visit to Malta last year at Foreign Affairs Committee level.

One thing that struck me about the Chinese is that they talk about their problems and limitations with frank sincerity. A case in point was an article in the Good Doctor series of their That’s Guangzhou magazine which spoke of the seasonal depression that a lack of sunshine often induces. One particular line ran as follows: “Some of my best friends, especially those who have only been in Guangzhou for a few months, keep asking me: ‘Do you actually have sun in Guangzhou?’ The stock reply to which is: ‘Ask god and the polluters!’”

Although China has pollution problems in various towns and cities, particularly those which are experiencing heavy industrialisation, the environmental issue is stealthily rising higher up their political agenda, which is a good and positive development in its own right.

What impressed me most in Guangzhou was the visit to their Economic and Technological Development District which comprises a hi-tech industrial development zone and a free trade zone as well as an export-processing zone. Maltese businessmen should seriously consider visiting this district not merely to consider it as a possible site for investment but also to learn about their methods and operations. When I asked about the investment flows into the district, I learnt that although some 27 per cent hails from such offshore locations as the Virgin and Cayman Islands and another 34 per cent from nearby Hong Kong, there is considerable investment from the USA, Germany, Singapore and Taiwan. Notwithstanding the fact that China has a communist government, the management of the district made it clear that they believed in a “small” government with high efficiency. Last year their gross industrial output increased by 16.3 per cent while their GDP rose by 6 per cent plus in real terms. They have so far managed to attract 87 of the top Fortune 500 companies world-wide. In electronics, one finds anybody that matters – from Sony to LG, in chemicals – Du Pont to Colgate, in iron & steel – Nippon Steel, in the automobile industry, anybody from Toyota to Honda and in the foods and beverages sector from Pepsi to Nestle.

The tax regime in this Chinese province is quite impressive. Apart from having corporate income tax pegged at 15 per cent, there is a tax free period in the first two years after profit-making, 7.5 per cent in the third to fifth year of profit-making operations and 10 per cent in the sixth to the eighth year of profit-making.

They are even developing a biological island in the neighbourhood – a science city – as well as probing the area of genetics.

While we in Malta continue to make a sham of the one-stop-shop concept, in Guangzhou they practice it to the letter!

Talking of investment in China, it was pleasant to meet Maltese entrepreneur Colin Tabone, who is now successfully managing WET’s operations in China, to learn first hand about the challenges and opportunities that running a production plant in China entails. It was equally interesting to meet socially some of the Maltese members of his top management team.

Next week I intend to write further about China, particularly about how it has grown into the most influential geopolitical force in Asia – if not also in the world.

e-mail: [email protected]

Leo Brincat is the main opposition spokesman on Foreign Affairs and IT.