China plans to invest billions of pounds in British infrastructure, including the £50bn HS2 rail project, it was revealed at the start of David Cameron’s trade visit to the Asian powerhouse.
The investment offer made by China’s premier, Li Keqiang, which could also see more funding for British new nuclear projects, marks a triumph for the Prime Minister who wants to increase the UK’s economic, trade and diplomatic ties with Asia’s largest economy.
The Government wants to encourage China to invest in the UK as it seeks to broaden its funding options for strategic transport and energy projects.
“On infrastructure, the two sides have agreed to push for breakthroughs and progress in co-operation on our enterprises in nuclear power and high-speed railway,” said Mr Li. “The Chinese side is willing to not only participate but also purchase equities and stocks in UK nuclear power projects, and the UK is open to this idea.”
In a further sign of the growing relationship with Beijing, Mr Cameron also put his weight behind a free-trade agreement between the European Union and China on Monday that could potentially help British companies win a greater share of business in one of the world’s largest markets and provide a £1.8bn boost to the UK economy.
China is expected to need the UK’s support to secure a European free-trade agreement, with the proposed accord having received an unenthusiastic reception from the 28-nation bloc. Some countries are concerned that a deal would see the region flooded with cheap Chinese goods.
“I see China’s rise as an opportunity not just for the people of this country but for Britain and the world,” said Mr Cameron. “Some in Europe and elsewhere see the world changing and want to shut China off behind a bamboo curtain of trade barriers. Britain wants to tear these trade barriers down.”
A day of talks in the Chinese capital resulted in a number of deals and initiatives. These included a joint initiative to boost digital and media industries that could be worth £2bn to British companies; the establishment of a jointly funded £200m UK-China Research and Innovation Partnership aimed at increasing research projects; and an accord to boost co-operation on cross-border crime and health.
Presenting to a packed audience of British and Chinese business exectives at the Beijing Hyatt, Mr Cameron promised no “investment hold-backs” for Chinese companies doing business in Britain, as well as unlimited visas for Chinese students wishing to study in the UK.
Despite some concerns surrounding the role of Chinese investment in the UK, Mr Cameron offered a robust defence of Beijing’s role in the British economy and his commitment to keep the door open to China. “No country in the world is more open to Chinese investment than the UK,” said Mr Cameron.
The Prime Minister is being accompanied in China by a delegation of senior UK business leaders, including Sir Andrew Witty, chief executive of pharmaceutical conglomerate GSK, and Mark Allen, boss of food producer Dairycrest. Many delegates attending were optimistic about the prospects of follow-on business coming from the mission.