China, Britain open up 'golden era' with billions of dollars in deals

2015-10-22 16:03Xinhua Editor: Gu Liping
Chinese President Xi Jinping (L) and British Prime Minister David Cameron meet media after their talks at 10 Downing Street in London, Britain, Oct. 21, 2015. (Photo: Xinhua/Ju Peng)

Chinese President Xi Jinping (L) and British Prime Minister David Cameron meet media after their talks at 10 Downing Street in London, Britain, Oct. 21, 2015. (Photo: Xinhua/Ju Peng)

China and Britain signed an array of business deals worth billions of dollars on Wednesday, as both sides work together to usher in a "golden time" for bilateral ties.[Special coverage]

It is the right time for the two sides to deepen their bilateral relationship and mutually beneficial cooperation as their "comprehensive strategic partnership" is embracing the second decade, Chinese President Xi Jinping said during talks with British Prime Minister David Cameron at 10 Downing Street.

After their talks, the two leaders witnessed the signing of a string of deals. According to Cameron, the deals totalled at almost 40 billion pounds (some 62 billion U.S. Dollars), including the landmark agreement on building the Hinkley Point nuclear power station.

With the presence of Xi and Cameron, China General Nuclear Power Corporation (CGN) and French energy giant EDF signed a strategic investment agreement under which CGN takes a 33.5 percent stake and EDF takes 66.5 percent in nuclear power project at Hinkley Point in Somerset.

"This is a flagship project of cooperation between our countries in recent years, and it will lead to more practical cooperation of this kind between the two sides," Xi said, referring to the nuclear power project.

Cameron described the deal "historic" as the project will provide reliable, affordable energy to nearly 6 million homes, creating more than 25,000 jobs.

He Yu, chairman of CGN told Xinhua that the deal can promote China's nuclear facilities to high-end markets in Europe and provide opportunity for Chinese companies to fully involve in the construction and management of British nuclear power plants.

"This is a triple-win for the existing nuclear energy partnership between China, France and Britain," he said, attributing the deal to the increasingly close ties between China and Britain.

David Elmes, a professor with Britain's Warwick Business School, believed the project will lead a new wave of Chinese investment in British energy industry.

"This is the first project in the British government's plans for a series of new nuclear power stations that will replace the existing, old ones. The involvement of Chinese firms in the start is an important step in defining the team of companies who need to be involved," Elmes told Xinhua.

Investment and business cooperation between China and Britain has been growing rapidly despite the slow global growth.

Britain has become the European Union (EU)'s second largest investor in China as well as China's second largest trading partner and investment destination in the EU, while China has become Britain's second largest non-EU trading partner.

In 2014, China-Britain trade volume for the first time exceeded 80 billion dollars as China's import from the European country doubled in five years.

Two-way investment between China and Britain has grown rapidly. China's investment in Britain rose at an annual rate of 71.7 percent over the past three years. Last year, British investment in China increased by 87.6 percent year-on-year, the fastest among major EU countries.

Huawei is a major investor in Britain, which Xi himself visited Wednesday afternoon. The Chinese tech giant has 15 offices across the country and over 1,100 employees. It currently supports 7,400 jobs directly and through its supply chain in Britain.

Geely Group of China, which rescued the iconic London Taxi Company in 2013, has announced its plan to develop an environmentally friendly next-generation London Black Cab.

Moreover, China's Huadian Corporation signed a sale and purchase agreement with British oil giant BP, formerly know as British Petroleum for buying up to 1 million tons of liquefied natural gas per year.

In an expansion of their ongoing global partnership, China National Petroleum Corporation (CNPC) and BP on Wednesday entered into a framework agreement on strategic cooperation covering potential shale gas exploration and production in China's Sichuan Province, future fuel retailing ventures in China, and other international partnerships.

Rolls-Royce announced a deal with China's airliner HNA Group to provide Trent 700 engines to power 20 Airbus A330s.

"A strong relationship is in both our countries' interest, not just because it brings investment and jobs and higher living standards for our peoples, vital though those things are," Cameron said.

"The more we trade together, the more we have a stake in each other's success; and the more we understand each other, the more that we can work together to confront the problems that face our world today," said the prime minister.

Financial cooperation has led the way as the two countries get closer.Britain was the first European country to sign up for membership of the new Asian Infrastructure Investment Bank. The two countries signed a bilateral currency swap agreement and China set up an RMB clearing bank in London.

Britain became the first country outside Asia to obtain the RQFII initial investment quota, the first Western country to issue RMB-denominated sovereign bond and the first major developed country to include RMB into its foreign exchange reserves.

Back in 2012, London officially launched the plan of Center of RMB Business. It has since then become one of the most dynamic and most important RMB trading centers and offshore RMB markets.

"China will issue in London RMB sovereign bond outside China for the first time and the People's Bank of China will issue 5 billion RMB (about 788 million dollars) of bonds in Britain," Xi told reporters.

"And the first RMB green bond will be issued in the UK," Xi said.

The two countries have also agreed to conjoin China's Belt and Road Initiative with Britain's "Northern Powerhouse" project.

At the closing ceremony of a China-Britain business summit on Wednesday, Xi said that the China-proposed Belt and Road Initiative is an open, diversified and win-win project poised to bring huge opportunities for the development of China and many other countries.

The Belt and Road Initiative refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road Initiative, which was proposed by Xi in 2013 with the aim of reviving the ancient trade routes. The network passes through more than 60 countries and regions with a total population of 4.4 billion.

The initiative not only covers the countries alongside the ancient routes, but also links the Asia-Pacific, European, African and Eurasian economic circles, Xi said.

"There is immense potential for China and Britain to boost cooperation within the Belt and Road framework," said the Chinese president.


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