Remarks to the Institute Of Directors City Branch Chinese New Year of the Ox celebration on Tuesday, 16 February 2021:
新年快乐, 今天晚上我很高兴见到大家。Xīnnián kuàilè, jīntiān wǎnshàng wǒ
hěn gāoxìng jiàn dào dàjiā.
Good evening everyone and welcome. I am Professor Michael Mainelli, Alderman and a Sheriff of the City of London from 2019 to 2021. With my brother Sheriff, Chris Hayward, we are responsible for the Central Criminal Court in the City of London, the Old Bailey, for promoting justice and the rule of law, and representing the City in support of the Lord Mayor.
I’ve been asked to make some short remarks on my personal, not official, view of “What The Year Of The Ox Might Bring To The City Of London” and our Chinese friendships. So what is my horoscope for the year of the white metal ox – bái jīnshǔ niú nián白金属牛年?
The Ox personality is characterized as hard working, intelligent, and reliable, in the background but needing no praise. Head down, dependable, and practical, the Ox personality is much needed in a world where tensions have risen due to covid-19, but were already rising the past few years due to populists and geopolitics, as well as local Brexit tensions. It’s actually rather easy to give horoscopes in the year of the ox. I predict yet more talk of B’s & C’s, obviously Brexit and Covid-19.
So what is the impact of Brexit between the UK, China & Europe?
- China needs to expand its investment in Europe. China is rising as a power that needs sophisticated international professional and financial services. The UK should be China’s preferred offshore platform for Europe, and beyond;
- The EU needs to expand its investment in China. UK skills, combined with stability and independence, ought to make the UK the EU’s preferred offshore platform for China, and beyond;
- This trade role should be attractive to the UK, and done well should make the UK indispensable to both China and the EU.
As someone who travels the world advising countries and cities on establishing financial centres, what people value is stability and tolerance. Small nations often have outsize financial centres, think Singapore, Zurich, Dublin, or Amsterdam, let alone offshore centres around the world from Jersey, Guernsey, and the Isle of Man, to Luxembourg, Cayman Islands, or Mauritius. In the 1990s the Japanese coined a term for London’s financial services, the ‘Wimbledon Effect’. London hosts the Wimbledon tournament successfully, but rarely wins. Basically, the UK could thrive by providing the financial services ‘tennis courts’, highly successful whatever the state of native competition.
We have seen this Wimbledon Effect, most notably in London and Singapore. A French pharmaceutical company and a Japanese pharmaceutical company might structure a deal over a Malaysian plant, not in France, Japan, or Malaysia, but in London. To the contrary, I’ve never seen a deal in New York City or Tokyo, where there is no indigenous US or Japanese local business.
Think further back, some 700 years to the Hanseatic League. London thrived then. London connected – delivering financial, technical & business services to support trade. The UK needs to sell the virtues of that Hanseatic trade view – open borders, free capital flows, free markets, free trade, limited government interference, individual rights, freedom of speech, and protection of property. In theory this shouldn’t be hard, not least as these are traditional British values. Let the Imperialists structure their Empires as they will, but when they need to connect with each other then Hanseatic Britain is there.Connecting 8 billion people in commerce and trade is sufficient work for 67 million people.
Tip O’Neill famously pointed out “All politics is local”. Successful small countries are fair and open. If the UK ensures local politics put fairness and trade first, we have a mighty chance of success because Empires need fair Hanseatic ports for their own purposes.
Covid-19, until 2020 the City of London was the most intense physical meeting place for global workers. We know the numbers, 525,000 commuting workers with 9,000 residents. The Square Mile may have a genuine claim to be most intense open urban working environment with a daytime density of 180,000/km2 (Manhattan’s density is about 27,000/ km2, albeit that is an average).
Covid-19 hit cities in their core strength, the economies of scale that come with physical density and economic intensity. Given the City of London’s intensity, it is no surprise that the geographic City of London has had a torrid covid-19 year. Equally though, covid-19 has accelerated two unnoticed trends, business travel reduction and working from home.
International business travel patterns were already changing. In Scandinavia, in a boom year, 2019, flygskam, translated as ‘flight shaming’, reduced business travel by about 8%. This is an unprecedented drop. By way of contrast, in 2010 Eyjafjallajökull’s eruption generated much more coverage but only half of the impact. Flygskam showed every sign of spreading across Europe, until covid-19 reduced all travel by approximately 80% this year.
Likewise, video-conferencing is not new.& The big lesson is not that video-conferencing works; it has for decades. The big lesson is that great changes lie ahead for all office work. While the geographic City of London has had a torrid covid-19 year, the south-east England technical and financial services cluster has had a bumper year.
London’s unique position might allow us to expand our reach by grabbing a vastly larger share of a shrinking market, the need for physical interaction essential to cross-border trade and cross-border investment. Our built environment planning is already moving towards more ‘mall’ or ‘campus’ style business centres.
From another saying about an ox’s horn, 钻牛角尖/ zuān niú jiǎo jiān, London knows it must not be a mouse heading into a dead end of an ox’s horn. We must be at our most creative during this year, repositioning the City of London as the World’s Coffeehouse or Global Coffeehouse while adopting the personality of the Ox, head down and practical, delivering not flashing, meum dictum meum pactum, my word is my bond. The Ox gets on with the work.
The City of London is about continuity and change, conducting our rituals while seeking to renew our relevance. I believe we have a genuine opportunity to be the global centre for all deal-making, and I seek more discussion about that opportunity with our Chinese friends.
谢谢你们, Xièxiè nǐmen.