25 May 2019

POLICY WATCH: China, Britain see win-win in closer ties

China is on track to become a key player in Britain’s second phase of high-speed railway construction and nuclear energy development, demonstrating its technological capability on a global scale.

This emerged after British Prime Minister David Cameron, who is leading the biggest trade mission to Beijing, met with his Chinese counterpart, Li Keqiang {李克強}, on Dec. 2. Both sides pledged to “push for breakthroughs” on nuclear power and high-speed rail development.

Li said China is willing not only to participate in Britain’s power projects but also to acquire stakes in them. It is the first time China is exporting large-scale technology to the West after being involved in infrastructure development in Third World countries for decades.

Increased bilateral relations between China and Britain should be mutually beneficial given China needs to invest more in overseas assets as its economy undergoes structural reform from an export-oriented, investment-driven model to a more service-focused, consumption-based type.

Britain, on the other hand, needs infrastructure investment to stimulate its sluggish economy and create jobs. The British government is leveraging closer ties with Beijing to draw the line with other European Union nations which are increasingly worried about China’s growing assertiveness and global ambitions.

Britain is planning a second high-speed railway to connect London and northern England. The project, estimated to cost 30 billion pounds (US$49.2 billion), is expected to be completed by 2026. The government invited China to participate in the project two months ago during a visit by British Transport Minister Patrick McLoughlin.

Cameron is hopeful about securing investment in the railway project from Beijing. He told Chinese media he is interested in China’s high-speed rail system and would welcome Chinese investment in Britain’s own high-speed rail development.

In October, the two sides signed a nuclear cooperation agreement that allows Chinese firms to buy into British nuclear power plants and eventually acquire majority holding.

The agreement paves the way for China’s fast-growing nuclear industry to play a significant role in Britain’s energy sector.

Also, the two sides agreed to bolster trade and investment, enhance fiscal and financial cooperation, promote people-to-people and cultural exchanges as well as foster cooperation on international and regional issues.

One of the immediate offshoots of the Cameron visit was an announcement that Britain will begin renminbi clearing services. This is on top of British support for Chinese wholesale banks seeking to open branches in London and mainland firms wishing to raise funds in Britain.

– Contact the reporter at [email protected]




EJ Insight writer

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