Cameron cheers China trade but Europe baulks

DAVID Cameron sparked frustration in Brussels yesterday by talking up the prospect of a free trade deal with China.

The Prime Minister, who has taken dozens of business leaders on a trade trip to the country, told Chinese leaders yesterday he will champion a tie-up with the European Union.

“Some in Europe and elsewhere see the world changing and want to shut China off behind a bamboo curtain of trade barriers,” said Cameron.

“Britain wants to tear those trade barriers down.”

But his remarks put him at odds with the EU, which was recently embroiled in a trade dispute with the country over subsidies on solar panels. China threatened over the summer to limit imports of European wine in response.

“We believe that it is premature at this stage to discuss a free trade agreement with China,” said Alexandre Polack for the EU executive.

Cameron also got a sceptical response to his claim there had been a “breakthrough” in allowing China to play a role in the High Speed 2 project.

China’s premier Li Keqiang said he was keen for the country to become involved in HS2 as well as nuclear programmes, in a nod to the proposed Hinkley Point C power station.

But neither gave any details about the scope or timing of a tie-up.

“I can certainly imagine once there’s a high speed line they would be keen to invest, like other sovereign wealth funds,” David Leam, director of infrastructure at London First, told City A.M. “Then there’s the question of who might be building this and I think the UK has quite a good record of having an open market... We don’t need to jump into bed with the first suitor there.”

Richard Wellings, deputy editorial director at the Institute of Economic Affairs, said the HS2 announcement is “essentially a PR exercise to pretend it’s not going to cost as much as it will”.

Also announced yesterday was Standard Chartered’s partnership with Agricultural Bank of China to provide yuan clearing services in the UK, helping financial institutions and corporates execute yuan transactions.

StanChart boss Peter Sands, who is accompanying Cameron on the trip, said “the opportunity to boost RMB liquidity in London could be used to fund large investment projects and support the development of other financial activities”.

Downing Street confirmed yesterday that all delegates are covering the costs themselves, and are not being funded by the taxpayer.

“Each delegate pays their way for the trip,” the Prime Minister’s spokesman said, adding that attendees were drawn from a list compiled by UK Trade and Investment, comprised of the best business opportunities the country can offer.

CAMERON’S TRADE MISSION TO CHINA: THE DEALS SO FAR
Jaguar Land Rover has signed a £4.5bn agreement to provide 100,000 cars to China’s National Sales Company.

■ A £200m research fund aiming to foster scientific collaborations between UK and China has been agreed.

■ Modern Water has announced three strategic contracts including a joint desalination plant deal.

■ A £200m healthcare package and new anti-microbial resistance programme.

Standard Chartered Bank and Agricultural Bank of China signed a memorandum of understanding to provide Renminbi clearing services in the UK.

Related articles