UK, China to strengthen common ground, Belt & Road a focus

Considering China’s aim to drive innovation and the UK’s leading place in sectors including advanced automotive engineering and financial services, these areas are likely to be most attractive to Chinese investors, said Alistair Michie, chairman of the International Board of the China Centre for Globalization, a Beijing-based Chinese independent think tank.

“The UK is the most open nation in the world for accepting Chinese investment, but the levels of investment might be much higher if the people of the UK had a better understanding of China,” Michie told the Global Times in an email on Monday.

For example, Chinese telecoms company Huawei Technologies Co and automaker Zhejiang Geely Holding Group have been engaged in the UK market for a long period.

Huawei, which entered the UK market in 2001, now has more than 1,500 local employees in the country and has established joint innovation centers with both BT and Vodafone. The company has also set up research and development offices in Cambridge, Bristol, and Ipswich.

Geely acquired automotive engineering firm London EV Co in February 2013 and bought a 51 percent stake in British sports car maker Lotus Group in September 2017. As of March 2017, Geely has invested a total of 300 million pounds ($423.69 million) in the construction of new factories in Coventry and a cutting-edge technology research and development (R&D) center in the UK.

“The importance the UK has attached to new-energy vehicles provides a sound foundation for the development of the sector, which together with the country’s advantages in R&D and talent, gives us confidence to cultivate the UK market,” Geely told the Global Times on Friday.

The UK has become China’s second-largest investment destination within the EU, Minister Counselor Jin Xu of the Chinese Embassy in the UK said at a conference in London on January 23.

China’s non-financial direct investment into the UK totaled $1.53 billion in 2017, with accumulated investment of $19.14 billion by the end of last year, according to the Xinhua News Agency.

Access benefits

“Compared with Germany and the US, which hold a cautious attitude toward Chinese firms’ investment due to their concerns over competition and national security, the UK poses less challenges for Chinese companies,” said Chen Fengying, an expert at the China Institutes of Contemporary International Relations.

“Financial services is a strong sector in the UK, while its manufacturing industry is not as good as we imagine,” Chen told the Global Times on Tuesday, adding that the industrial structures of China and the UK are complementary.

British Prime Minister Theresa May is due to visit to China from Wednesday to Friday, and Chen believes that bilateral economic and trade ties will be further strengthened, based partly on the potential of the Belt and Road (B&R) initiative.

China’s further opening-up measures “will also serve as cooperation linkage between China and the UK,” Chen noted.

In his speech at the World Economic Forum in Davos, Liu He, director of the General Office of the Central Leading Group for Financial and Economic Affairs, said that China will further open up its financial markets, as well as enhancing intellectual property protection and easing investment restrictions for foreign firms in the manufacturing and services sectors.

The bilateral cooperation on the China-backed B&R initiative will be a highlight of May’s trip, experts said.

May will support the B&R initiative in ways that may surprise the Chinese leadership, Michie noted.

“Both sides have significant interest in the success of the [B&R] project: London, as the world’s leading financial and service skills centre, can provide crucial components of the B&R and deliver huge mutual benefits,” Michie said.

President Xi Jinping spoke of a “golden era” in China-UK relations during his state visit to the UK in 2015.

“Prime Minister May and her delegation must recognize this clear signal given by the Chinese leadership to the UK – and not to any other nation – and develop the golden era into permanent trade arrangements,” Michie said.

Source: Global Times