A Chinese sanctions package is urgently required in the event of further military escalation around Taiwan, Liz Truss will tell G7 leaders on Friday.
The former prime minister will address a conference in Japan on Friday which has been organised by the Inter-Parliamentary Alliance on China, an international campaign group seeking to co-ordinate the response of democratic nations to Beijing.
The meeting will hear Ms Truss’s first public speech since her short and turbulent stint as prime minister ended last October, and she is expected to address growing concerns over China’s approach to Taiwan and the implications for free trade in the Indo-Pacific.
The Tory MP, who was also foreign secretary, is expected to put forward six policy recommendations, including a call for the G7 to agree urgently on a co-ordinated sanctions package to be used against Beijing in the event of further military escalation around Taiwan.
Ms Truss is also expected to recommend establishing an economic equivalent of the Nato military alliance for democratic nations should they need to respond to economic coercion, for democracies to audit and reduce dependency on China in critical industries, and to deepen economic ties with Taiwan.
Accepting Taiwan into international organisations and establishing a stronger Pacific defence alliance are also expected to be on Ms Truss’s wish list.
Liz Truss through the years — in pictures
“Some people say standing up to this regime is a hopeless task, that somehow the rise of a totalitarian China is inevitable,” Ms Truss is expected to say.
“But I reject this fatalism. And the free world has a significant role to play in whether or not that happens — and how it happens.
“It wasn’t that long ago that the UK heralded a ‘golden era’ of UK-China relations. We rolled out the red carpet for the Chinese president with all the pomp and ceremony that came with a state visit.
“I should know — I attended a banquet in his honour. Looking back, I think this sent the wrong message.”
On Taiwan, she is expected to say: “We must learn from the past. We must ensure that Taiwan is able to defend itself. And we must work together across the free world to do this.”
Taiwan has its own democratically elected government and is claimed by mainland China.
The island is not recognised as a sovereign state by the UK or US, but both have called for the dispute to be resolved peacefully, and the UK does support Taiwan’s participation in international organisations as an observer.
Truss unrepentant in final speech as UK prime minister — video
There has been growing international concern over escalating tension, with China recently having held large-scale military exercises.
Taking a tougher stance on China was widely expected under Ms Truss’s leadership, but with her time as prime minister ending so quickly amid economic and political turmoil, she did not deliver on an expectation to designate China as a “threat”.
Her re-entry into the debate comes as her successor, Prime Minister Rishi Sunak, is facing calls from some of his own backbenchers to take a tougher stance against Beijing.
This month, an ally of Ms Truss said her speech would be “hawkish”, and added: “She’s expected to address Sunak’s decision to brand China a strategic competitor rather than a threat.”
In November, Mr Sunak said the “golden era” of UK-Chinese relations was over but described the nation as a “systemic challenge” rather than a threat.
Former Tory leader Sir Iain Duncan Smith is an Ipac member, and this week criticised the government after it emerged officials were prepared to meet Erkin Tuniyaz, the Governor of north-western Xinjiang province. It is now understood that the Governor’s trip has been cancelled.
Ms Truss’s intervention will add pressure on Mr Sunak to take a firmer line at a time when her allies are also pushing for the party to reconsider her tax-cutting agenda.
Also expected to speak at the conference in Japan are two other former prime ministers, Australia’s Scott Morrison and Belgium’s Guy Verhofstadt.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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