Nations such as China and India are surging ahead, but the West should be careful not to overestimate, misinterpret the changes or “become paralyzed by fear of our own decline,” the British ambassador to the U.S. told a UW international studies class on Wednesday, Sept. 28. Sir Nigel Sheinwald said the response to Asia should include better partnerships, ones that fit 21st-century challenges and opportunities.

As part of a visit to the Seattle campus, Sheinwald spoke to several hundred students in “States and Capitalism,” a 200-level course taught by Professor Anand Yang.

The Asia-Pacific region buys almost a quarter of EU exports and is one of its fastest-growing export markets, Sheinwald said. Almost 50 percent of world shipping, measured by tonnage, crosses the South China Sea, making good diplomatic relations in those regions very important. “A terrorist attack in Mumbai can affect businesses in Silicon Valley or London,” he said.

China alone will account for more than one-third of the increase in global energy demand to 2035, Sheinwald said. Factories in China and India take on work for prices western countries struggle to compete against. Chinese and Indian colleges and universities are graduating thousands of students.

It’s made westerners feel threatened, Sheinwald said. China will indeed become the largest economy in absolute terms over the next decades. But he added that China’s GDP per capita is only $7,500, as against the EU average of $31,700 and the U.S. figure of $47,100 – and China may not reach Western levels for many years, he said. It also faces demographic problems, environmental degradation and resource shortages.

“We cannot compete on the basis of lower wages. We can and must compete on the basis of our innovation,” Sheinwald said. Products of the future are being designed and developed in America and Europe, and their universities are key to such innovation, he said.

Britain has increased its diplomatic presence in China and India, paying for it with savings in Europe and elsewhere. But coordination between European Union and U.S. interests “has so far been patchy,” Sheinwald said.

The two entities, he said, need closer cooperation in trade, human rights, development of regional institutions and matters of peace and security. In trade, for example, the U.S. and the EU share similar concerns about access and protection of intellectual property in emerging markets. “We are more likely to achieve improvements by making a joint case,” particularly at the World Trade Organization, the G20 and bilateral relationships with key economic players. Sheinwald said.

Also too, he said, domestic demand in countries such China has to increase along with better healthcare and welfare if people are to become really prosperous. There needs to be a gradual move away from purely export-led growth. Sheinwald mentioned that in a speech to Chinese students last November, British Prime Minister David Cameron warned that China could also face risks if other countries feel it is taking advantage of open economies.

But protectionist threats from the West won’t work, Sheinwald said.

It\’s all the more reason the U.S. and European nations should more fully cooperate.

Along with trade issues, the U.S. and EU need to agree on priority human rights and ensure complementary messages, Sheinwald said.

He also said that the EU and the U.S. should agree with countries in the region of North Korea regarding messages and the proliferation of weapons. The two should also outline common principles on regional maritime security, and talk more about Asia’s fast-growing demand for energy.