As global markets adjust to new geopolitical realities, Professor Kerry Brown, director of the Lau China Institute at King’s College London, believes European businesses and their treasurers need a more pragmatic and forward-looking approach to China. Talking to The Treasurer ahead of his keynote speech at an Association of Corporate Treasurers (ACT) event in London, Prof Brown outlines three key takeaways he hopes treasurers will act on.
“The first thing,” he says, “is that we must be proactive and forward-thinking about China emerging as a technology superpower. We are always five years behind the curve. We’ve got to basically embrace a world in which China is producing the technology that we need access to. That’s important. It is no longer about China being in technology deficit to us.”
Brown, one of the UK’s leading experts on Chinese politics and economics, argues that the old dynamic, one in which Europe transferred technology and expertise to China, has flipped. With China now driving advances in areas such as AI, clean energy and public health “Europe has to get its head around China’s technology prowess and how it can try to get some access to that”, he says.
His second message was about credibility. “We must think about being consistent,” Brown stresses. “It’s OK to have a sceptical line on China. It’s OK to have a positive line on China. You can even be negative about China, but you’ve got to be consistent. If you’re not consistent, then people don’t take you seriously. China will not take partners seriously if one day they say, ‘we’re friends,’ and the next day they say, ‘we’re enemies.’”
That consistency, he believes, is essential if Europe wants to maintain influence and shape a relationship that too often feels “transactional”. Political hesitancy, shifting policies and mixed signals, from welcoming Chinese investment to blocking it on security grounds, have created uncertainty for both sides.
In the long term, not engaging with the world’s second largest economy, second largest population and second largest producer of technology doesn’t make sense
The third takeaway, Brown says, is to recognise the scale of the opportunity cost in disengagement. “China’s the world’s ultimate opportunity cost,” he explained. “You can certainly say we don’t want anything to do with this place, but that is going to cost you quite a lot because it’s going to be opportunities that you will not get access to, and you won’t be able to influence the place.”
While he acknowledges the risks of engagement, Brown says: “In the long term, not engaging with the world’s second largest economy, second largest population and second largest producer of technology doesn’t make sense.”
Brown believes the next decade will define how Europe positions itself between the US and China, and whether it can build genuine economic autonomy. For treasurers, that means developing a “strategic mindset” that weighs risks against rewards and prepares organisations to operate confidently in a changing global order.
“The opportunities do outweigh the risks,” he said. “You’ve got to go in with the mindset of: we accept this, we can justify this and we’ll put up with the criticisms and some of the problems because the alternative is being left behind.”
Philip Smith is editor of The Treasurer