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Chinese premier's Britain trip aims to clear hurdles and advance cooperation
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Special> Premier Li Keqiang Visits UK, Greece
UPDATED: June 24, 2014
Sino-British Cooperation Strides onto Higher Stage

As major powers fighting to regain former glories, China and Britain will work together more closely to bring Sino-British ties to a new and higher level.

A number of landmark deals worth billions of British pounds were signed during Chinese Premier Li Keqiang's first visit to the United Kingdom. More importantly, agreements on railway, nuclear and finance signaled sincerity and willingness from both sides.

On Wednesday, the visiting premier and his counterpart David Cameron witnessed the signing of a memorandum of understanding regarding closer cooperation on railway design, engineering, construction, supply, operation and maintenance.

The memorandum is expected to open the door for ambitious Chinese enterprises to participate in the High Speed 2 (HS2) rail line from London to the north, which is planned to open in the 2030s.

It is not the first time rail cooperation has come to the fore. Before Cameron's visit to China last year, the prime minister made it clear that he was interested in what was happening in terms of high-speed railway in China and would welcome Chinese investment in British infrastructure, including HS2.

To dismiss worries at home over China's increasing ownership of British infrastructure, Cameron said it was "a positive sign of economic strength" as Chinese investment would be a boost for capital projects, like roads, railways and other schemes.

Wednesday's memorandum officially confirmed the rail cooperation plan although it did not give many details. It also marked a big step for Chinese rail companies to go global.

Li promoted China's high-speed railway technology on several occasions as the country is trying to shift from basic manufacturing to higher-margin sectors.

"Infrastructure in parts of Britain is aging. Chinese enterprises, especially railway companies, have great opportunities there," said Ma Zhengang, former Chinese ambassador to Britain, adding that Chinese railway technology is advanced and relatively cheap.

In addition to railway, the two countries on the same day signed a civil nuclear agreement that could be worth hundreds of millions of pounds to British companies.

The agreement, the first of its kind, paves the way for Chinese companies to invest in Hinkley Point, the first nuclear power plant to be built in Britain for a generation.

Two state-owned Chinese companies, China General Nuclear Power Group and China National Nuclear Corporation, will take a 30 to 40 percent stake in the 16-billion-pound ($27.2 billion) nuclear project.

"Both sides stand ready to work together to ensure the success of Hinkley Point as soon as possible," noted a China-Britain joint statement.

Financial tie-ups also bore fruit. China Construction Bank was appointed as the first RMB clearing bank outside Asia, in London. This is an important step and reinforces Britain's position as the western hub for Chinese finance.

A string of other measures, including direct trading between the British and Chinese currencies and granting more licenses to British companies to enable them to invest directly into Chinese markets, aim to develop Britain into an offshore center for Chinese currency and investment.

Tighter economic ties

The First Opium War in the 19th century, which was triggered partly by trade disputes between China and Britain, was deemed as the opening of China's modern history. After going through decades of twists and turns, the two countries have established a strategic partnership with trade and investment expanding rapidly.

Britain is China's third largest trading partner in the European Union, the second largest investment source as well as a major destination for overseas investment.

China Investment Corporation, the country's sovereign wealth fund, has stakes in Thames Water and Heathrow Airport. Dalian Wanda, one of China's largest private companies, is set to build a high-end hotel by the River Thames after it bought British yacht maker Sunseeker for 320 million pounds ($544.6 million).

To boost investment in Britain, the National Development and Reform Commission, China's top economic planner, released a guideline in March to help domestic enterprises to fit in foreign environments.

British investment in China is also increasing. Exports to and direct investment in China surged by 39.6 percent and 62.2 percent in the first five months of 2014, faster than most of China's other major partners.

"The United Kingdom has a strong economy, dynamic financial sector, advanced science and technologies and it leads the world in energy conservation and environmental protection. China, for its part, has a huge market, large foreign exchange reserve and a competitive manufacturing sector," said Li in an article published in The Times before his tour.

"Drawing on our complementary strengths, there are many areas for collaboration," wrote the premier.

(Xinhua News Agency June 19, 2014)

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