Prime Minister David Cameron and Chinese President Xi Jinping are hailing a “golden era” of Sino-British relations on the eve of Jingping’s four-day state visit to the UK, as investors await confirmation of billions of pounds worth of trade and investment deals.
Among the expected announcements is a multibillion pound deal to build the controversial new nuclear power plant at Hinkley Point in Somerset, a project criticised for its high costs and potential security risks.
During a recent visit to China, chancellor George Osborne unveiled a £2bn government guarantee for Chinese investors backing the Hinkley Point C project, a move the Treasury said would “pave the way for a final investment decision by energy company EDF, supported by China General Nuclear Corporation and China National Nuclear Corporation”.
EDF chief executive Jean-Bernard Levy told French state TV yesterday that he expected an announcement to be made during the state visit: "If all goes well, we will be able to announce major news in coming days; the first nuclear new-build in Europe since the Fukushima accident”.
His comments come just days after Labour’s shadow energy secretary Lisa Nandy urged the UK government to consider if Chinese investment in nuclear power would endanger national security, following reports last week that intelligence agencies were concerned about potential tampering with the nuclear technology.
In an interview with the BBC yesterday, China’s ambassador to the UK insisted that the expected deal was “in the best interests of Britain and also in the interest of partnership between China and UK”.
The nuclear plant agreement is one of a number of business deals expected to be signed while President Xi is in the UK. When Chinese Premier Li Keqiang, China’s head of government, visited London last year, £14bn worth of trade and investment agreements were signed – and experts say that was just the start.
Andrew Hornigold, a corporate technology expert at City law firm Pinsent Masons, said: “Alongside investment into major infrastructure projects in UK's rail and energy sector, Chinese investment into Britain will focus on hi-tech, IT, research and development.”
Pinsent Masons published a report last year forecasting that China will plough £105bn into UK energy, transport, property and tech sectors within the next decade.
Chinese telecoms giant Huawei, will invest millions into a research project at the University of Manchester’s National Graphene Institute, Sky News reported.
Optimism may be tempered by China’s latest growth figures which are due out today and expected to continue their downward slide. Yet on Friday, Bank of England rate-setter Kristen Forbes dismissed any slowdown fears for British business, saying: “Just one country – China – has been responsible for over one-third of global GDP growth since 2011, and even after incorporating its recent slowing, is still expected to drive about 35 per cent of global growth this year.”