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Title	The Cost of EU Membership - English Law Vs E.U. Law
Author	Grace Fredericks
Date Published	05 August 2005

Part I English Law

One of the first conditions for any stable society is the maintenance of law and order. But to have them there must be some authority strong enough to maintain them. The problem then arises: how do we prevent those who have power from using it for their own selfish ends? In other words: how do the governed preserve their liberties when power is in the hands of those who govern? This is the main angle from which I hope to make the comparison between English and EU law. And it is at the level of the nation state and the larger federation, not the small tribal community, that the comparison will be made.

The solution found in England was to have not one, but three separate authorities, each with its own independent power. The three are law-making, government or administration, and enforcement of laws, that is the Legislature (Parliament), the Executive (Cabinet and Ministers) and the Judiciary (Judges and Law Courts). Each had its own separate sphere of action and its own independence. It took centuries to achieve this. It was won mainly in the Seventeenth and Eighteenth Centuries, had its heyday in the Nineteenth and early Twentieth Centuries, but has been badly eroded since then.

Separation of powers has not been complete: it is so inconvenient to have Parliament and Government entirely separate that the custom has arisen of appointing members of Parliament to form the Government. There was, however, a real separation of powers because the Government, when the system worked, could not force Parliament to make the laws it wanted or adopt the policy it wished to follow; nor could it prevent Parliament from securing its downfall by a vote of no confidence. Thus, our solution to the problem of controlling those who govern has been three authorities balancing each other so well that none can use its power tyrannically.

Until the Glorious Revolution of 1688 all these powers were on the whole wielded by the King. He could imprison at will those who opposed him; he could refuse to give his assent to laws made by Parliament (though he could not make new laws or impose new forms of taxation without the vote of Parliament), he commanded the armed forces; he appointed or dismissed judges, and he chose the men who assisted him in governing the country. He was head, not only of the State, but also of the Church, and appointed Archbishops and Bishops. There were many honours and well-paid posts he could give to those who supported him; since it was obviously the King who wielded power, it was his power that had to be curbed.

In a short essay like this, only a few of the achievements establishing and protecting our civil liberties can be described.

1. Imprisonment without trial

From the time of King John’s acceptance of Magna Carta in 1215 it has been the law that no man should be imprisoned without being brought to trial. Yet whenever the King was strong and could count on baronial support, he could do this with impunity. Even down to the reign of King Charles I this was the case: he ruled for eleven years without a Parliament, and during that time kept men in prison without bringing any charge against them. It was not until 1679 that an effective means of preventing this was found.

In that year Parliament passed the Habeas Corpus Amendment Act. The writ of habeas corpus is an order that a particular man be brought before the judge who issues it. It became much easier to obtain the writ – it could be applied for even when the courts were not sitting; and if one judge refused it, any of the other high court judges could issue it. In addition the jailer was made responsible for obeying the writ and bringing the prisoner before the judge, who would either set him free or fix a date for his speedy trial. If the jailer failed to carry out his duties he was tried and found guilty.

Naturally, there were many loopholes in this law: the King might give written orders for a man to be kept in prison. This was overcome in a surprising way – by saying that the King could do no wrong. It was assumed that he would not wish to break his own laws: if he appeared to have done so, it was because he had been given bad advice. The minister who had done this could then be tried and sentenced. Judges could be bribed – to make this unlikely they were given very high salaries. The King appointed and dismissed judges: a judge had to be honest and brave to defy the King by issuing a writ of habeas corpus, but to protect the judge the power of the King to dismiss judges was taken from him.

2. The Army

If there is a permanent standing army, it must come under some authority and in most countries, including England, the King was that authority. The army protected us in time of war, but the situation in Europe at the close of the Seventeenth Century was so uncertain that a good case could be made for maintaining it even in time of peace. How then, could the King be prevented from using it to increase his own power, and perhaps crush the liberties of his subjects?

We found a means, not through logic, not even through obvious justice, but by practical common sense. The army was placed under two separate types of law. In most countries it came only under military law, but in England it also came under the laws which applied to civilians, and no concession was made to the possibility that the soldier might be in an intolerable position if those laws conflicted.

For example: if there was danger of a crowd rioting and looting, an officer might have to prevent this by ordering his soldiers to fire on the mob, so killing people. He could then be tried for murder under civilian law. On the other hand, if he did not give the order to fire and innocent people were killed, he could be court-martialled for failing to prevent unacceptable mob violence. In practice, this situation was not as unjust as it seems. It bred an army which developed a sound sense of responsibility, and in which a man was a civilian first and a soldier second.

3. Other checks on royal power

a) The King’s power was also limited by the Triennial Act of 1690 which required the election of a Parliament once in every three years (later altered to once in seven years and then to five years). Parliament emerged as the chief brake on royal power, especially when the custom of voting taxes for one year only was introduced. To govern at all, it became necessary for Parliament to sit every year.

b) The royal power has also been whittled away, not by new laws, but by custom (conventions) which developed over the years. One of these is that the royal assent to laws made by Parliament has never been refused. This has been the case for nearly three hundred years.

c) With the passing of centuries, the royal power has been so reduced that the Queen exercises little more than the right to be informed and the right to advise. The royal power has gone; who has it now and have we found the way to curb it? I would say it is the Prime Minister who has collared much of the royal power. He appoints and dismisses Ministers and can confer honours and political positions to those who support him. Human nature being what it is, this must win him many adherents. Do Parliament and the Judiciary act as a brake on him? Let us take Parliament first.

As far as my observations go, Parliament has put little restraint on recent Prime Ministers. This is partly due to a defective electoral system which no longer reflects the views of the electorate. One reason why it worked in the Nineteenth Century was because there were only two parties, Conservative and Liberal. A majority in Parliament did coincide with a majority in the electorate, and at the next election there could be a swing to the other side and another party come to power. The Executive therefore, even when it was backed by a good majority of MP’s had always to take into account the wishes of the electorate. This is not so today because there are not two but many parties; it is possible now for a government to be elected despite having polled fewer votes than the opposition parties combined. Only the votes of a minority count – the majority of them have been rendered worthless. So separation of power between Legislature and Executive no longer works.

This leaves us with only the Judiciary to act as a check on the Prime Minister and his colleagues. The present Government seems bent on removing the last restraint on their power and have already begun to do this; but the way in which they are achieving their aim is not obvious, and some knowledge of how our judicial system works is necessary to understand it.

There is a strong esprit de corps amongst not only our judges but also our lawyers. Though individuals may have strong political views, these usually come second to their allegiance to the law. Political considerations are far less important to them than to the judges of the American Supreme Court. We saw in the 2000 presidential election how politics destroyed obvious justice when many of the voters of Florida, through no fault of their own, cast their votes for the candidate they did not support, and the judges of the Supreme Court refused a fresh election because a majority of them were Republican and wanted Mr Bush to win. With an independent Judiciary, such as ours has been, such a decision would have been unthinkable.

In preserving the power of the Judiciary, the office of Lord Chancellor is crucial, yet to many electors the change from Lord Chancellor to a Minister of Justice may appear only a change in name. I do not believe it is; it seems intended as an all-out attack on the independence of the Judiciary in order to abolish its separate power, and therefore remove the last restraint on the power of the Prime Minister and other leaders of a political party.

In appearance the appointment of Lord Chancellor (the head of the Judiciary, and himself a member of the House of Lords) is a purely political one. In practice he does not serve the interests of any political party. Once appointed, the Lord Chancellor remains a judge, the highest in the land, and not a politician. The House of Lords has two functions –it engages in law-making, like the Commons although its powers are far less. But it is also our highest court, and the Lord Chancellor presides over it. When it sits as a court, only the judges attend, and thus political considerations should not enter into their discussion. This characteristic percolates down to lower courts. Thus the non- political nature of our Judiciary is preserved, and it can act as a real check on executive power.

If, and when, the Lord Chancellor is replaced by a Minister of Justice the last effective restraint on the possible tyrannical use of power will be removed. Then perhaps a rebellion of the English people will be their chief means of obtaining redress. Not many people would prefer that to the peaceful restraint exercised by the Judiciary until now.

In what way would a Minister of Justice differ from the Lord Chancellor? The Lord Chancellor is always a judge, imbued with the spirit of our judicial system. As was said before, his loyalty is to his profession, not to any party. But a Minister of Justice need not, and probably would not be a judge, but a layman, in the same way as a Minister of Education or Health need not be a teacher or doctor, and he may be guided almost entirely by political considerations.

This has been the situation until recently but constitutional and judicial changes are happening so rapidly that it is impossible for an ordinary member of the public like myself to keep up with them. I understand that already changes are being made which will make the office of Lord Chancellor (or whatever new name is given to it) a more political one. What is not in doubt is that the Judiciary’s separate power is being eroded.

An important advantage we enjoy in our system of law is that all courts are required to interpret the law in the same way. One reason is that judges only take into account the law itself: they ignore anything said by members of Parliament in debates before the bill was passed. Nevertheless, ambiguity cannot always be avoided and it may happen that judges differ when there is uncertainty about the meaning of any particular law. It is through case law that this difficulty is overcome. If the application of any law is uncertain, the first judge dealing with this difficulty will state his interpretation and give judgement accordingly. Henceforth every court on that level and below is bound by the same interpretation. Only if a higher court gives a different interpretation can the earlier one be changed. From then on the new interpretation will be binding on all courts on that level or below. This is the way in which we have ensured that the law is the same in Liverpool as in London, in York as in Exeter. However good our laws may be, they are useless if they are not enforced. We saw this when we considered imprisonment without trial. The same problem occurred over the Slave Trade.

In 1807 we prohibited the Slave Trade in England, and the navy was given the task of seeing that no English ships engaged in it. The navy was efficient and powerful; it did not take long to get rid of the English Slave Trade. In 1815 we persuaded the other maritime powers to ban it, but as no-one was appointed to enforce the law, it remained a dead letter. But eventually the British navy, with some help from the French, was given the task, and the Slave Trade eventually came to an end, at least at sea. This is a good example of the importance of ensuring that some specific person or organisation is made responsible for enforcing the law. As with all institutions, there are sometimes human failings, but basically this system I have described works well.

Part II EU Law

We turn now to EU law (both as it is at the present and in the proposed new Constitution). How well does it compare with English law in protecting civil liberties through placing checks on the power of those who govern? We should also remember that EU law overrides English law. If we are part of a United Europe, our liberties will survive only as far as EU law allows.

There is no provision for anything resembling our writ of habeas corpus. It appears very likely that a man or woman who offends the government could be kept in prison indefinitely without being brought to trial.

Neither is there any provision for the army to be answerable to the law governing civilians. In fact there is more scope for it to be used tyrannically than there ever was in the past. Under the proposed new constitution, all national forces will be controlled not by national governments, but welded together into a single army under EU control. It will then be even easier to suppress discontent by armed forces. If there is unrest in any European country it is possible that, instead of having it put down by troops of their own nationality, units from another country will do so. This is a wonderful recipe for ensuring that tyranny can prosper. It might also cause friction amongst otherwise friendly countries.

We have seen that by means of case law all English courts interpret the law in the same way. No such concept is found in the European Union. A judge in one court can take the opposite view from one in another, yet the two are permitted. Since there are bound to be occasions when a law may not be clear, it is important that its wording be as precise as possible. Our laws used to be couched in very precise terms, but many EU laws and an increasing number of English ones are more general – for instance such laws as prohibit discrimination or protect human rights. This means there is still more room for uncertainty, and as a result even more occasion for different interpretation.

Year after year accounts of the Commission have been rejected by auditors, yet the European Parliament has accepted them. One could hardly say that a Parliament which accepts accounts in this way is in the least capable of acting as a check on the power of the Commission.

In both England and the EU, one branch of the Executive, the bureaucracy (our Civil Service and the Commission in Brussels) have achieved a virtual freedom to make regulations without reference to Parliament. In England, some statutes have been couched in such general terms that the Civil Service which administers them has been left to fill in the details. In theory these are still subject to Parliamentary control; in practice they are not, because they ‘lie on the table’ for a fixed number of days, after which, if there is no objection from Parliament, they have the force of law. Since thousands of regulations ‘lie on the table’ each year, MP’s have little time to read them and, as a rule, no objections are made. Something very similar happens in Europe. As a result we have been deluged with regulations, a few of them necessary and sensible but the vast majority burdensome, destroying not only initiative but many small businesses which cannot afford the expense they impose.

In the undemocratic way in which regulations are made, there is little to choose between England and the EU. But there is one big difference in the way the system works in practice. In England our Civil Service generally sees to it that the regulations are obeyed; in many European countries the bureaucracy is lax, and the regulations are ignored with impunity.

Part III Conclusion

There is much that needs reform in England, and many loyal English men and women must long to see their country one where peace and justice flourish, where they can make sacrifices to restore its good name and protect the weak and unfortunate. To embark on such a voyage we need to be masters in our own house, and what is true of us is also true of our cousins in Europe. A united Europe is so vast and made up of so many diverse nations that a united effort to redress inequalities and injustices is virtually impossible. I lived through the Second World War in London, and even in the darkest days there was a spirit of comradeship, a willingness to put up with hardship and deprivation which helped us to act with unity, in the common interest. There were relatively few black-marketeers. The enemy then was outside; now it is inside – yet just as we came through then, so we can come through now if we care enough. How much do we care? How vigilant have we been to preserve our liberties?

Freedom is worthless if it is not used. Those in power who try to force us to accept further inroads into our freedom know this well. To all appearances, they are doing their best to do this by frightening us with these unreal fears and concealing much of the truth. I will try to substantiate these statements by examining two of these misleading fears.

One is the statement that we cannot afford to leave the EU because it will ruin our trade with Europe and cause great unemployment. The suggestion behind this is, of course, that we prosper through our connection with Europe, but this is not said in so many words because it is demonstrably false. The plain fact is that we buy more from Europe than we sell to them and therefore we are paying out money through our trade with Europe. In addition, our annual contribution to the joint funds of the EU are set so high that we pay out far more than we receive back in grants. If we left the EU we would in economic terms be better off not worse off, because we would not have to buy expensive European products later which we can get more cheaply elsewhere. Europe is afraid of our leaving - there is no ground for us to fear the consequences of that act. In a "Memorandum Opinion Forum", of Get, 2004, Lord Pearson of Rannoch calculated that with the money we had lost in our economic connection with the EU we could have built and maintained 94 community hospitals! I do not see how that could cause unemployment.

The second statement is that we may again be plunged into war if European nations are not thoroughly bonded together. But what are the facts? The last war ended in 1945 and there was plenty of unrest then and later. How long has a united Europe been in existence? The first stage was the Common Market which we joined in 1970 confirming this in the 1975 referendum. If the Common Market was sufficient to prevent war why strangle ourselves with closer ties? Most people would, I think, say that it was NATO that contributed more to keeping the peace than the Common Market. I would also suggest that if we get a European army and the new Constitution we may find ourselves on a footing with super-powers and will be more likely to engage in war, not less. We need courage as well as knowledge to make the best of freedom - courage to face not only illusory fears but also evils of our own making. This can entail much hardship but the people of England have often faced hardship in the past to hold to their own way of life and independence. We did it during the war when in 1940 we stood alone, among European nations, but helped by other lovers of freedom, for instance free French, Norwegians, Dutch, and Poles.

We were helped too by the troops who came to us from the Dominions and other territories then ruled by us, and by volunteers from neutral Eire. But England was the base and mainstay for the war against Hitler. There were voices pressing for peace with Hitler, but they were lost in the general determination to stick it out however black the future seemed. It was not America that won the war, it was England. America helped, but there would have been no war for her to help with if we had capitulated. There were conscientious objectors but they also contributed to freedom with others by helping to grow food on every scrap of land, by saving food for pigs, keeping hens in back gardens and by such organisations as the Friends Ambulance Unit. They would not fight, but they were nonetheless in the thick of battle doing their work of mercy. What we could do then we can do now, if only we face our fears with courage, and demand and search for the truths that are being hidden from us.

If we look at the argument put forward by the Government and its pro-European supporters, we will, I think, find that they create an atmosphere of fear and pessimism - what will happen to us if we lose the support of Europe? Even opponents seem mesmerized by the government line. I would suggest that if more emphasis were placed on the benefits we would gain by recovering our independence, those who oppose the EU would thereby seize the initiative and the Government would have to follow their line. In addition, the opponents of the kind of institution Europe has become would be creating an atmosphere of trust and optimism. We might then recover not only our independence but also our confidence in ourselves.

Across the centuries Shakespeare's voice comes ringing to us in proud humility:

"This England never did, nor never shall,
Lie at the proud foot of a conqueror,
But when it first did help to wound itself.
Now these her princes are come home again,
Come the three corners of the world in arms,
And we shall shock them. Nought shall make us rue,
If England to itself do rest but true."

(Ending of “King John�)

Part IV Summary

In every country the problem is to make sure that those who rule do not misuse the power entrusted to them for the common good. In England, we have solved the problem by giving separate power to Parliament, Government (with the Prime Minister at its head), and the Judiciary, each with its own sphere of action balanced one against the other. In this way we won our freedom; freedom through the writ of habeas corpus from unjust imprisonment, freedom of speech and peaceful assembly, freedom to elect our representatives and many other hard-won liberties we take for granted. We have an army that is under civilian control (quite a rarity) and we have judges and courts which apply the laws in the same way in every part of the country and are not swayed by politics.

But circumstances have changed, and these freedoms are now in danger because one of the three separate authorities has become too powerful. This is the Government (especially the Prime Minister) which is no longer properly balanced by Parliament. It is well on the way to destroying the power of our Judiciary. In addition, there is no proper control of the mass of regulations streaming out from the Civil Service.

If we remain in Europe, we will most likely lose most of the safeguards that remain. In the EU there will be no writ of habeas corpus, the laws will be uncertain in their operation, the army will not be under civilian control, but the bureaucracy, like ours, will continue to flourish unchecked.

It will be difficult enough to remedy our own imperfections; as only one state among many it will be almost impossible to make changes in the EU. We need to inform ourselves of what is happening, in order to vote with wisdom when the Referendum is held.

Grace Fredericks

Published with kind permission of G. Fredericks

Title	China, Oil and Higher Rates...the Big Issues for the Next Four Years
Author	Hamish McRae, The Independent
Date Published	05 May 2005

What will happen to the world economy during the life of the new parliament -- the backdrop against which the next government will have to perform?

Of course we cannot know what the great geo-political forces will whip up whether, for example, there will be another war involving the UK. Not many people, four years ago, would have predicted a second invasion of Iraq. But if you focus on economics rather than politics there are surely some things that can be said, always bearing in mind politicians can derail economies if they try hard enough.

There are clearly at least three big forces that will dominate the next five years. Top of my list would be the continuing rise of China and India, the increasingly tight oil market and, in the early years, the need to increase world interest rates. We also need to remember there is such a thing as the economic cycle and that the world is some way through the growth phase.

China and India first. We don't have the figures yet but last year, in all probability, China became the world's fourth-largest economy, passing the UK. That calculation is made at actual exchange rates, not purchasing power parity rates. On that basis, China is already the world's second-largest economy after the US, while India would be the fourth, with Japan at number three.

There is always a debate as to which exchange rate matters more. If you are looking at clout in world trade, actual exchange rates matter most because trade is carried out with real money. If you are looking at living standards, purchasing power parity is better because that measures what people can actually buy.

However, on actual exchange rates, by 2009 China will be the world's third-biggest economy, while India will be securely in the top ten. These are projections that Goldman Sachs made in its famous BRIC (Brazil, Russia, India, China) study. They won't be precisely right but unless there is some utter catastrophe they will be broadly so.

That is a huge shift of power. From the narrow perspective of the UK, for the first time for about 150 years a developing country will have a larger economy than Britain. As we come to realise this, it will colour the way we think about the world. Some people will be frightened, seeing manufacturing jobs going to China and service industry ones to India. In the US there is considerable political resistance to the growth of Chinese imports and heading that off will be one of the big concerns of the present administration. In Europe there will be new calls for resistance against globalism - much of the support for a "non" vote in the coming referendum on the European Constitution seems to be based on this. But whether you welcome the shift in power as a proper realignment of the world's wealth, or feel threatened by it, something of this scale cannot be ignored.

The second big global change that may take place during the next five years will be that world oil production reaches its peak. The Association for the Study of Peak Oil (ASPO), a network of scientists studying this, calculates that production will peak next year and then fall. Its projections are shown in the second graph.

Now this is not the view of the oil industry, which thinks that peak production will be perhaps a decade away, maybe more, and certainly not next year. But we can test ASPO's prediction in the next five years. If it turns out to be right and production in 2007 is lower than 2006, the world economy will have to start adapting pretty fast. If it is wrong we will still have to adapt but have a bit more time to do so.

Remember too that irrespective of concern about supply, the rise of China and India puts pressure on the demand side of the equation. Given this, a sensible judgement would be that oil will remain quite expensive - and tend to become more so - not just for the next five years but for the foreseeable future. That will be an inevitable drag on global growth.

The third thing that will happen is the end of free money. We are towards the end of a long period when interest rates have been so low that money - for any organisation that can borrow at the best rates - is virtually free. Interest rates here have always been positive but in much of the eurozone and the US they have been below the rate of inflation. The US Federal Reserve is gradually tightening policy, though the European Central Bank - facing very weak conditions in most of the eurozone - has so far failed to do so.

You cannot have free money for long. If you do, you encourage people to invest in crazy projects. When many of these go under, as they inevitably will, the bad debts threaten the banking system. There is a good argument to be made that US policy in particular has stacked up some really bad problems for the future. That is certainly what a lot of bankers think. The trouble is, neither they nor the rest of us know what will burst the bubble and when it will happen. History does suggest, though, that the tightening of US monetary policy has a long way to go.

That leads to the final point. There is an economic cycle and the world economy is already slowing. A combination of high oil prices and rising interest rates might tip it into recession.

It is hard to know how to judge this one. If you read the headlines in the papers in the UK it seems that we may be heading into one already. Retail sales are very weak, the housing market has stalled and we face higher taxes. I was at the OECD in Paris this week and heard some grade A pessimism about the eurozone's prospects from its chief economist, Jean-Philippe Cotis, who has, by the way, a good track record in predicting such matters. If you want to add to the gloom quotient, note too that the imbalances in the US remain as wide as ever and that China, Japan and the rest of east Asia may not want to carry on lending the US the money to cover its trade and budget deficits.

On the other hand it is equally plausible that these tensions noted above will merely provoke a mid-expansion pause. Growth worldwide will slow sharply this year and inflationary pressures will ease. This will allow interest rate increases to be put on hold and growth will carry on for a while yet.

My instinct, for what it is worth, is that the "pause then grow again" outcome is more likely than the "recession round the corner" one. But it would be mad to ignore the existence of the economic cycle and I would be astounded if there were not some sort of downturn - maybe a serious one - in the next five years. A combination of tough reforms in the Eighties and good economic management by Gordon Brown enabled the UK to come through the last cycle in very good shape.

We are still in not too bad shape when compared with other large developed countries and at least, unlike the countries in the eurozone, we still have control over our interest rates and hence are able to adapt policy to meet shifts in demand. It is only gradually becoming clear how difficult it is proving for the ECB to frame policy to suit the entire region and I fear for the eurozone if the next downswing really bites.

Getting through the next downturn will be more difficult even for Britain, as I think we all intuitively accept. I'm not sure our politicians have grasped this yet, but they will before the next parliament has run its course.

Hamish McRae

Title	Chinese railways in America?
Author	Keith Hudson, Futurologist
Date Published	09 December 2004

About a year ago I suggested that China would be buying into America sooner or later on a large scale in order to keep the value of the dollar (to which the renminbi is fixed) reasonably high -- because it can't afford to keep too many eggs in one basket by continuing to buy only US Treasury Bonds as now. The Chinese don't want the dollar to go too low in case it brings about a deep recession in America -- a consumer market it will depend on for at least the next decade or two -- and they don't want the renminbi to get too low either because the rest of the world would undoubtedly start raising tariff walls if Chinese good became too cheap in dollar-renminbi terms.


About three months ago, the Chinese government intimated that it would soon allow Chinese companies to invest their dollar profits in American companies.


This morning, on the Financial Times and New York Times websites, it was announced that the first of these private commercial acquisitions has been agreed. The Chinese company Lenovo is buying IBM's PC business. Various critics in the electronic and computer press had previously been doubting this on the grounds that many of IBM's big corporate customers will be unhappy about Lenovo making their PCs. But IBM's PCs are already made by other manufacturers. And, besides, many of IBM's big corporate customers, such as General Motors, are themselves investing deeply in China. What Lenovo is buying more than anything is IBM's brand name in order to sell into hitherto unsatisfied markets around the world. Even though competition between PC makers such as IBM, Dell and HP is fierce and the profit margins on PCs are now very low, the Chinese are well used to ultra-mass production and ultra-low pricing by now.


Undoubtedly, this will be only the first of what will now be a long stream of purchases of American firms by Chinese companies with dollar profits. What are they likely to buy into? Except for the purpose of buying brand-names for the same reason as Lenovo did with IBM they're unlikely to buy into many consumer goods manufacturers. Increasingly, consumer goods are being made in China and transported cheaply to America. It's unlikely, too, that Chinese firms will be able to buy into banking, insurance, medical or legal services because, in these more personal services, there are too great cultural differences (as American banks have found trying to move into Japan). In the case of services, American customers are likely to be more conservative than when they buy DVD recorders. (Though Americans will certainly fly to China in their tens of thousands for organ transplant treatment in the coming years if American legislation prevents the development of stem cell techology.)


However, there are two sectors where Chinese purchase and development in America might not be strongly resisted because they are largely passé industries. However, they are industries which the Chinese have probably put a great deal of thought into in recent years compared with American companies.


The first is coal. Most of China's energy needs and electricity generation is still derived from coal despite the fact that the country scouring the world for more oilfield contracts, just like America. But Chinese coalfields are rather like those of Europe -- largely mined-out leaving only deposits with deep and dangerous seams. However, the Chinese lead the world in experiments into the gasification of coal in situ -- something the National Coal Board in this country gave up 30 years ago. And, of course, America has immense relatively unexploited coal fields because, ever since the discovery of domestic oil, US power stations have become increasingly oil-fired rather than coal-fired.


The second sector is railways. China, like America, is a large country but, unlike America, it has not yet developed its railways to anywhere near its full potential. China is, in fact, building several long-distance tracks and is importing locomotives from Siemens in Germany.


Something else to put in the equation is Maglev (Magnetic levitation) rather than conventional railway technology. At present, although China only has a 20-mile Maglev track at present (to serve athletes for the 2008 Olympic Games), it is very interested in long-distance uses of the new technology. Accordingly, on the back of German technology, it has been developing its own form of Maglev which,it is said, is cheaper to run than ordinary railways. China is now seriously considering Maglev for a 1,200 mile rail from Guandong province in the south to Beijing in the north.


Something else to put in the equation is that the Chinese have been studying car commuting into the cities very closely and are well aware of the costs of pollution and congestion that we in the West have already experienced. In fact, Chinese car exhaust standards are already more stringent than anywhere else in the world, traffic control in several of their largest cities is draconian and the growth in car production is already being eased back relative to other development.


In short, China is probably very close to building substantial Maglev commuter tracks for its metropolitan workers. Furthermore, as fossil fuel costs rise everywhere in the world in the coming years, then Maglev commuter railways will become increasingly profitable. And, being able to travel safely at 300-400 mph, commuters would be able to travel huge distances -- even further than many Japanese commuters do in their bullet trains every day. Maglev can also be double-ranked, need far less land purchase, are economical as short units (unlike normal railways) and, finally, they can be braked quickly. The last two characteristics mean that a very high density of traffic would be possible -- and with many side spurs to dormitory areas.


In my view, the development of Maglev is a certainty for China. But, equally, it would also be a practicable possibility for America, too. Thus, combining these three factors -- China's need to invest large sums in America for the next 10-20 years, plus coal gasification (and thus gas-fed electricity generation) plus Maglev commuter transport -- makes for a great deal of sense.


As well as saving energy -- and even more comuting time -- a Maglev system might also have other important consequences. Given the still rapid development of the internet Maglev could also stimulate small town/village development far from the metropolises -- without actually isolating their inhabitants completely. Once a week or so, office workers could re-engage face-to-face with headquarter supervisors in the main cities, families could quickly travel long distances for shopping bouts, children could attend distant specialist schools while still living at home and teenagers could travel to and from city social attractions in the evenings.


All this makes sufficient sense to me to suggest that something along these lines -- and probably Chinese-led -- will be happening in America, and possibly Canada, too, before too long. And, for the Chinese, it will be a far happier circumstance than 150 years ago when tens of thousands of Chinese coolies were used (and many died) in building American and Canadian tracks in steam railway times.


Maglev would also be of great advantage in England and I've little doubt that someone somewhere over here must be thinking about this very seriously even now...


Keith Hudson