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K. Palonka: President Xi Jinping in United Kingdom. London struggles to improve relations with China

Contrary to US  visit in the shade of Pope and UN summit „the UK is rolling out the red carpet for Chinese President Xi Jinping’s state visit”. It started  Monday Oct  20th with full pomp of 41-gun salutes, lunch with Queen Elizabeth II and lodging at Buckingham Palace.[1] The authorities including Prime Minister David Cameron himself expects China to sponsor a lots of projects, namely pouring new investments into UK economy.

Źródło: flickr.com

Źródło: flickr.com

Apparently UK is left behind its European associates as far as China  investments and trade relationship  is concerned. It is to be improved as some Chinese officials have said recently that the amount of deals Xi will announce during the trip will be “huge”. [2]

Chancellor of the Exchequer George Osborne on a September trip to China signaled that Britain would refrain from criticism on human rights and not engage in inconvenient remarks. The UK, the first major Western country to get behind China’s Asian Infrastructure Investment Bank, was striving to be China’s “best partner in the West” and usher in a “golden era” between the countries, he said.[3]

Mr Cameron will raise human rights and cyber security “frankly and with mutual respect” during private talks with Xi,  because the UK has formed “a strong relationship with China based on constructive engagement”.

He  said  that current visit would bring more than 30 billion pounds ($46 billion) in deals and investment , creating 3,900 jobs in the UK in sectors including the creative industries, retail, energy, health and technology, financial services, aerospace and education.

Statistics show how significant is the UK delay comparing with other leading European players.

UK lags behind neighbors in trade balance with China.

UK lags behind neighbors in trade balance with China

UK exporters struggle to penetrate China market

UK exporters struggle to penetrate China market

Even as  the UK is now China’s second biggest European Union trading partner after Germany, it has the biggest trade imbalance comparing with the five largest EU economies. That trade deficit reflects its relatively weak exports of goods and services compared with imports from China. The UK expects that visit of President  Xi would help making progress and the new strategy aiming to transform China’s economy from an export-driven model to a consumption-driven one would  create new markets for British firms.

China’s OBOR (One Belt. One Road) commonly named Silk Road  – an ambitious project to revive historic trade routes through a string of infrastructure  links between China and Europe via land and sea – is another opportunity for British companies. Osborne became the first British minister to visit the northwestern province of Xinjiang,  showing how seriously the UK takes “One-Belt, One-Road” action, despite protests from human rights organizations Many of the overland routes will pass through Xinjiang. Chinese investments in UK  are much smaller than opposite  and there might be an opportunity to attract much more Chinese money into the country.

Zrzut ekranu 2015-10-25 o 18.00.18

Prime Minister Cameron is keen for Chinese companies to invest in Britain and China has signaled it’s willing to do so. He described  in the interview for Chinese TV that “the diplomatic relationship between the two countries as being in a very special moment and added it created an opportunity for Chinese investment into United Kingdom, that is absolutely both beneficial for Britain and China”. Industries that might  benefit include finance, real estate, energy, autos and technology.  During his trip Xi will visit Huawei Technologies Co., China’s largest maker of telecommunications equipment including smart- phones.  Huawei, which was banned in the US over security concerns, supplies network equipment in the UK.

During his visit in China Chancellor Osborne announced that the British government will provide a guarantee of 2 billion pounds ($3.1 billion) for the construction of the UK’s first new nuclear power plant in three decades to be built in Somerset. (China General Nuclear Power Corp. and China National Nuclear Corp. have  taken stakes in the project being led by Electricite de France SA. The deal could also lead to China designing and building a second nuclear plant in Essex).

China’s efforts  to internationalize its currency may be supported by linking the UK and Shanghai stock markets and the issuance of yuan-denominated bonds in the UK.

China’s ambassador to the UK, Liu Xiaoming commented his country does not „shy away” from discussing human  rights  but he said President Xi Jinping’s state visit would focus on „partnership” and „co-operation” between the two countries.

[1] Bloomberg news Oct.20th.

[2] “The U.K. is back in China’s good graces after Cameron’s May 2012 meeting with the Dalai Lama plunged the two countries into a near two-year diplomatic freeze.”Bloomberg.

[3] Significant as it was,  the U.S. tried to talk its allies out of joining the AIIB, for doubts about  its governance and concern for the environment and human rights. The U.K .neglected  Washington’s pleas and signed up, followed by Germany, Italy, France, Israel and other allies that decided to join forces with China.’s World Bank

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K. Palonka: President Xi Jinping in United Kingdom. London struggles to improve relations with China Reviewed by on 25 października 2015 .

Contrary to US  visit in the shade of Pope and UN summit „the UK is rolling out the red carpet for Chinese President Xi Jinping’s state visit”. It started  Monday Oct  20th with full pomp of 41-gun salutes, lunch with Queen Elizabeth II and lodging at Buckingham Palace.[1] The authorities including Prime Minister David Cameron himself expects

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