Osborne Pledges Stronger Links With China at Start of Trip
Chancellor of the Exchequer George Osborne said he’ll use a five-day trade mission to China to boost business links with the world’s second-largest economy.
Osborne is leading a delegation including Bank of England Deputy Governor Charlie Bean, London Mayor Boris Johnson and representatives of U.K. technology companies, that arrived in Beijing yesterday.
“I don’t want us to try to resist your economic progress, I want Britain to share in it,” Osborne said in a speech today at Peking University. “There is no country in the West that is more open to investment, especially investment from China, than the U.K. is.”
U.K. officials are pushing to place the British economy on a firmer footing by rebalancing activity toward exports and business investment. Low demand from the euro area, Britain’s biggest export partner, is spurring interest in other markets such as China.
During the trip, Osborne will co-host the fifth China-U.K. economic and financial dialogue with Chinese Vice Premier Ma Kai to discuss the economy, trade, investment and financial management. The talks will include “big steps” in making London a home for Chinese banks, bonds and finance, Osborne said before meeting Governor Zhou Xiaochuan of the People’s Bank of China.
“It is my personal mission that as you develop an international role for the renminbi, you develop that role through the international center of finance -- London,” he said at Peking University.
The delegation’s arrival came as a Chinese investment in Manchester Airport, Britain’s busiest hub outside London, used by more than 20 million passengers a year, was announced.
Beijing Construction Engineering Group Co. formed a venture with Manchester Airports Group and other partners to build an international business district in Manchester, the U.K.’s second-biggest city, the companies said yesterday. The airport plans to operate a direct airline service to China.
Osborne said it’s one of the country’s biggest developments since the Olympics, held in London last year.
“It shows our economic plan of doing more business with China and also making sure more economic activity in Britain happens outside the city of London is working,” he said in a television interview yesterday with Sky News from Beijing.
The U.K. energy industry is also of interest to China, Ed Davey, Britain’s energy secretary, said yesterday.
“The Chinese, along with the Koreans and the Japanese and other countries, are very interested in the opportunity in Britain’s nuclear sector,” Davey said in a BBC Television interview yesterday. “We’ll see massive Chinese investment, not just in nuclear, but across the board.”
The Manchester project will be worth about 800 million pounds ($1.3 billion) when the buildings on the 150-acre (61-hectare) site in the north of England are completed and fully leased, the partners said in a statement. Carillion Plc (CLLN) and the Greater Manchester Pension Fund are also part of the project, known as Airport City. It will create as many as 16,000 jobs and the development will be managed by Argent LLP, the group said.
“We see our involvement in Airport City as an extension of the memorandum of understanding between China and the U.K., where we have been looking to further explore joint infrastructure opportunities for some time,” Xing Yan, managing director of Beijing Construction Engineering, said in the statement.
Guo Yanhong, vice general manager at BCEG, said at a briefing with the chancellor in Beijing that the company will make a 12 million-pound equity investment in the joint venture.
Britain is already the most popular destination in Europe for Chinese investment, which last year jumped 95 percent, according to U.K. government data. China Investment Corp., the country’s sovereign wealth fund, took an 8.7 percent stake in Thames Water Utilities Ltd. in 2012 and also made a 450 million-pound investment in Heathrow Airport.
“There is much we can do together to improve the standard of living of the peoples of both our countries,” Osborne said in a meeting with Ma today. “There is an opportunity here to both encourage British exports and investment in China but also to encourage Chinese investment in Britain.”
Chinese developers including ABP Chinese (Holding) and Greenland Holding Group Co. are expanding overseas as the government maintains curbs on residential housing to cool price increases. ABP is involved in the development of a third financial district in London focused on Asian businesses after the U.K. and China set a target three years ago of doubling trade to $100 billion by 2015.
“Our aspiration as part of this international joint venture is to create a world-class business destination that will open up new connections on a global level,” David Partridge, managing partner at Argent (Property Development) Services LLP, said in the statement.
Osborne said yesterday Britain will start a pilot program to allow some Chinese travel agents to apply for visas by submitting the same form they use for a visit to the European Union’s Schengen Zone.
Other visa measures include creating a “super priority” service that will start about the middle of next year. A “VIP mobile visa” service now operating in Beijing and Shanghai, which reduces the collection process to about five minutes, will be expanded to other parts of China.
“These changes will streamline and simplify the visa application process for Chinese visitors, while ensuring the system is strong and secure,” he said in an e-mailed statement.
The visit of the Bank of England’s Bean and London Mayor Johnson comes as London is vying with Frankfurt, Paris and Zurich to become a trading hub for the Chinese currency. The Bank of England became the first European central bank to establish swap facilities with China, announcing a three-year 200 billion-yuan ($33 billion) currency swap line in June to promote financial stability and trade.
Osborne will be in China through Oct. 18, and will visit Shenzhen, Guangzhou and Hong Kong.
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