Does China present a threat to British jobs or an opportunity for growth?

Emma Reynolds MP (Labour, Wolverhampton North East) is the shadow foreign office minister

Once the beating heart of the industrial revolution, the Black Country has seen its manufacturing base eroded over the last three decades – with jobs haemorrhaging to Asia’s low wage economies. This process of deindustrialisation hit Wolverhampton particularly hard as the retail and service sector struggled to make up the ground.

Last week’s unemployment figures were grim for our city. With 7.8 per cent of the working population looking for work, Wolverhampton has the second highest unemployment rate in the country.

However, this week, the town where I grew up, and which I now represent in Parliament, received a shot in the arm.

Jaguar Land Rover has decided to invest in a multi-million pound engine plant in Wolverhampton, creating hundreds of highly skilled manufacturing and engineering jobs – plus hundreds more in the supply chain and wider economy.

And when it comes to our relationship with Asia’s economies, the tables are turning.  Two years ago, the luxury car maker’s prospects looked bleak and one of the company’s three UK plants faced closure. However, due to increasing demand from emerging markets for their world-beating products, particularly from China and Russia, Jaguar Land Rover bounced back with a vengeance.

China is now the company’s second largest market after the US. So instead of losing jobs and opportunities to the East, growing demand from the Asian economic giant’s middle and upper classes is driving growth, opportunities and jobs in our country.

But we cannot be complacent. The competition from Germany’s luxury car market is fierce and its overall exports to China dwarf our own. And just as China’s economy moved from agrarian to industrial in the space of a few short years in the twentieth century, China’s leaders now want to continue up the value chain towards high-end manufacturing and precision engineering in the twenty-first. Britain has to invest in skills and innovation to retain a competitive edge.

A few short years ago British jobs were being lost as businesses relocated to the East. Now an Indian-owned, British-branded car maker is going to build new engines in the UK to meet rising demand in China. There could be no better illustration of how, for all the threats and risks presented by globalisation, there are also opportunities to be seized.

See also:

• Government may yet see sense and throw a lifeline to Bombardier – Matt Dykes, September 13th 2011

• IFS questions Osborne’s “short sighted” failure to invest in science and skills – Shamik Das, September 5th 2011

• Freezing of science budget could hit UK’s global reputation – Claire French, October 29th 2010

• UK’s “disappointing” R&D spending under fire from EU research chief – Shamik Das, February 7th 2011

• Making Britain an innovation nation – Nick Osborne, December 11th 2009