HAVE COACH, WILL TRAVEL
By John Willman
Friday, December 08, 2006
When Henry Fitz-Ailwyn became London's first lord mayor in 1189, Chinese civilisation was already about 3,000 years old. The population of England's largest city was fewer than 30,000, while Hangzhou, capital of the Southern Song dynasty, was home to more than a million people. China's standard of living was well ahead of Britain's, and in the following century European traders began travelling the Silk Road through central Asia to buy its luxury goods such as silk and porcelain. They also carried back a stream of inventions, including the compass, gunpowder and printing.
Under later dynasties, the Middle Kingdom slipped into decline, while London rose to become capital of a global empire and then a leading international financial centre. But now Europe is again sending its emissaries and traders to the east in search of wealth and opportunity.
One of them is David Brewer, who, until last weekend, when he was succeeded by John Stuttard, was London's 678th lord mayor. In September he led a 60-strong delegation on a 10-day trip around China to sell the City of London's services to Chinese businesses. The lord mayor's rather medieval office is at the forefront of the drive to promote the UK's financial services industry around the world - despite concerns in the City about whether this 800-year-old institution is capable of filling that role.
On a warm Sunday morning, I join the delegation of senior City figures, professional advisers and investors on a coach trip to Hangzhou, south of Shanghai, in the centre of China's entrepreneurial heartland. Marco Polo described it as “the city of heaven, the most beautiful and magnificent in the world”, and tourists still come from all over the world to see the beautiful West Lake with its traditional Chinese pagodas and temples. But Alderman Brewer and his party are making this three-hour journey to persuade its fast-growing businesses to come to London to raise capital - from its venture capital investors or through a listing on its stock exchange.
The lord mayor, a stocky 66-year-old dressed in smart casual jacket and trousers, leads his party into the Hangzhou World Trade Centre hotel, an anonymous concrete block facing on to a three-lane highway choked with traffic. On the ground floor, manufacturers of bathroom products are holding a trade fair, but we head up several floors to a conference centre, where more than 20 local businesses are represented. The host is London Asia Capital, a UK-based merchant banking group that has brought seven Chinese businesses to the London markets and hopes the Lord Mayor's presence will encourage others to follow suit.
It should be easy, with Tokyo's stock exchange moribund after more than a decade of economic stagnation and New York's markets made increasingly unattractive by the new layers of post-Enron regulation. But the session appears to start badly when Jin Shengshan, Hangzhou's deputy mayor, steps up to the podium under an enormous red banner welcoming the delegation in English and Chinese. Plenty of western investors have come to the city in search of opportunity, the sharply suited deputy mayor says, but British companies have been scarce.
“More than 8,000 businesses in Zhejiang [province] have received investment from outside China, but none have received investment from the UK,” he says. While 13 local companies had floated on overseas stock exchanges, none had gone to London.
Brewer is an old China hand, however, and has a well-rehearsed speech that presses all the right buttons. “I first came to China 25 years ago and this is my 105th visit. I am the 678th lord mayor of the City of London, and you will all know that eight is an auspicious number.”
Then comes the sales message. London has become the largest international financial centre, he says, because it can handle transactions on well-regulated markets with transparent and efficient operations. Companies that come to London from China will benefit because the City's high standards of corporate governance and accountability make them attractive to international investors. Finally, the personal touch, with a presentation to the deputy mayor of a model of Mansion House, the lord mayor's official residence in the City. Pointing to the front door, Brewer says he looks forward to welcoming Jin when he comes to see for himself what London has to offer.
The next business is the presentation of certificates to London Asia's Chinese branch managers, to encourage them to seek out the most promising Chinese companies in their regions. Each of the 32 comes up on stage to the thumping beat of Johann Strauss the Elder's “Radetzky” March, is presented with a framed document confirming their status and poses for a photograph with the lord mayor.
“These will have pride of place in their offices and will inspire them for years to come,” says Simon Littlewood, the Oxford-educated accountant who is London Asia's chief executive.
Next Mi Dengfeng, the youthful-looking head of London Asia's operations in Xi'an, harangues the conference on the challenge ahead - and the opportunities. To demonstrate its results, he introduces Zhang Jianguo, chief executive of China Biofoods, which manufactures food supplements. He proudly tells them it had been listed on London's Ofex Plus market two days earlier, under the tutelage of London Asia.
Finally, a shaven-headed Buddhist monk in saffron robes is invited on to the stage, to be introduced as the company's spiritual adviser and to endorse the product.
“The essence of Buddhism is goodness to people,” says Shi Yan Zhuo, kung-fu master of the famous Mount Songshan Shaolin temple. “Mr Zhang's company makes good products, using a Shaolin temple formula.”
Then he poses for photographs with the lord mayor and, in exchange for a model of Mansion House, presents him with a collection of CDs of Buddhist meditation routines.
