UK politician thinks China is one of the most innovative places

Liam Byrne believes China is set to be at the center of a new Age of the Enlightenment over the next 20 years.

The ex-British cabinet minister and author of a new book, Turning to Face The East: How Britain Can Prosper in the Asian Century, says the former Middle Kingdom is entering an exciting new dawn.

"If Adam Smith (a leading Enlightenment figure) was writing The Wealth of Nations today he would base it on Foxconn City (where Apple and products for other tech giants are manufactured) in Shenzhen because of its pace of production and world-class innovation," he says.

"I think China is one of the most innovative places on Earth right now. Many people believe that China will produce the next Silicon Valley."

Byrne, who was appointed earlier this month as shadow minister for higher education, was speaking in the lobby of Portcullis House in Westminster. He was hitting back at those such as Will Hutton, who argued in The Writing on the Wall: China and the West in the 21st Century, that China lacked the institutions to have its own Enlightenment period that defined Europe's progress in the 18th century.

Byrne actually had a drink with the former editor of The Observer newspaper when he bumped into him in a bar at Oslo airport, which he refers to in his book.

"I think it's a much overrated problem (lack of institutions). I think the Chinese leaders have been very adroit at making the right adjustments at the right time," he says.

Byrne was chief secretary to the Treasury in former prime minister Gordon Brown's Labour government and famously left a memo to his successor saying he was "afraid there is no money" left.

He decided to write the book because of a growing realization that China could be a vital market for the UK in the wake of the financial crisis just as a resurgent Europe proved after the end of World War II.

"My starting point was trying to answer the question of how Britain was going to pave its way in a world where China was the largest economy.

"I also felt that China is hugely misunderstood in Europe, in general - in Britain, in particular. As someone who has traveled a little to China now and has worked with Chinese politicians for six or seven years, I wanted to share what I had learnt."

Byrne makes the case that while countries such as Germany through companies such as Siemens have been successful exporting to China as it has developed its infrastructure, the next phase of the country's growth could benefit Britain.

"China needs to build a social safety net. China needs to become a world leading science power and China needs to diversify a lot of its foreign exchange away from US Treasury bills. Britain can help with an awful lot of that. We are past masters of soft infrastructure such as legal systems, asset management and we could help China build that social safety net."

He makes the case Britain has been left in Germany's trail in its dealings with China for more than a decade.

Byrne, who took a first in politics and economics at Manchester University, where he was also a student leader, first encountered China when he worked at Hong Kong Telecom for Andersen Consulting (now Accenture) in the early 1990s.

Then in 2006 as a minister of state in the Home Office, he visited China dealing with issues around asylum seekers and organized crime.

"Coming back (from that trip) I realized that as a British politician I knew nothing about this country that was soon going to become the biggest economy on Earth," he says.

The book, which provides impressive analysis on China for which he acknowledges help from some of Britain's leading China experts, including the UK foreign office's China team, is evidence he has since redressed that knowledge deficit.