Michael Heseltine: 'Falls from grace are preceded by a blindness to new realities'

There is no shortage of major cities which will continue to seek to challenge London's supremacy. If another global financial centre is developed, it will probably be in Shanghai. To keep its position, it may well be that London will have much more actively to market itself, both individually by the many outstanding professional services firms here, and collectively as "the City".

Economies like India's are gearing up to become major exporters of services. If - or rather when - they succeed, it could have the same dramatic effect on our economy as the Japanese had on manufacturing in the 1960s and 70s. How long, I wonder, will it be before a Chinese bank buys a western investment bank? With both Bank of China and ICBC planning to float internationally next year, and thereby placing themselves among the world's biggest banks, the answer to the question is - probably quite soon.

To stay ahead we must build upon all of our existing advantages. It may be harder to develop new ones, especially in fields that cut across some of our traditional, not always helpful attitudes and assumptions. Historically, with an empire at our beck and call and with less need than many of our competitors to reach out to new markets, for example to learn their languages, we have not always been especially good marketers.

Falls from grace are generally preceded by a period of self-satisfaction, a blindness to gathering realities, a decreasingly justified self-belief. In other words, just the kind of thing that happens after someone has told you that you have overtaken New York as the world's number one deal-centre.