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China’s Xi to ink nuclear power deal as UK seeks investment

world Updated: Oct 21, 2015 17:30 IST
Xi Jinping

Britain's Chancellor George Osborne (L) lines up with and China's President Xi Jinping, his wife Peng Liyuan, and Prince Andrew (R) during a visit to Imperial College in London.(REUTERS)

China’s state visit to Britain moves from warm toasts and ceremony to cold, hard cash Wednesday, with business deals including a major Chinese investment in the UK’s first nuclear power station since the 1980s.

President Xi Jinping is expected to sign an agreement that will lead to his country financing 30 % of the cost of the Hinckley Point plant in southwest England. It is set to be completed by 2025 and will be built by Electricite de France and a group led by China’s state-owned nuclear company. EDF sought investors after it was unable to cover the cost of the deal alone.

The British government has agreed to underwrite 2 billion pounds ($3.1 billion) in Chinese financing to secure the deal and pave the way for majority Chinese ownership of a second nuclear plant planned for England’s southeast.

The nuclear agreement has faced criticism from those who suggest Conservative Prime Minister David Cameron has been wooing the Chinese for trade deals while ignoring the country’s human rights record.

Others worry about letting an undemocratic emerging superpower with powerful espionage capabilities access to Britain’s critical infrastructure.

“It won’t be the physical security that matters but the cyber security,” said Alan Woodward, visiting professor of computing at the University of Surrey. “We don’t want a foreign power being able to quite literally turn off the lights from some remote location.”

Xi has been welcomed with lavish ceremony on his visit, which began Tuesday with a day of pomp that culminated in a banquet at Buckingham Palace during which Kate, the Duchess of Cambridge, toasted the Chinese leader.

Xi also addressed both houses of the British Parliament, and is due to hold talks with Cameron at 10 Downing St. on Wednesday.

Not everyone in Britain has welcomed the government’s charm offensive. Xi’s visit has drawn protests from human rights and pro-Tibet groups - though they have been outnumbered by Chinese flag-waving pro-Xi crowds.

Steve Hilton, a former close adviser to Cameron, called the visit “one of the worst national humiliations we’ve seen.”

“I think that we have to be much tougher,” he told the BBC. “I think that we should consider sanctions on China, not rolling out the red carpet.”

Opposition politicians and trade unionists also have urged Cameron to stand up to Xi over what they see as unfair Chinese commercial competition.

UK-based steelmakers have announced several thousand layoffs in recent weeks in a crisis that manufacturers blame on China selling steel at a loss on world markets to secure its own market share.

Chinese foreign ministry spokesperson Hua Chunying told reporters in Beijing that “some disagreements or frictions” between economic partners were inevitable.

“The most important part is that both countries agree to properly handle these disagreement and frictions through discussion on the basis of equality and mutual benefit,” she said.

The nuclear investment is the highest-profile of some 30 billion pounds ($46 billion) in business deals that Britain hopes will be signed during Xi’s four-day stay.

Others include a 325 million-pound ($502 million) package of partnerships in the creative and technology, including a 50 million-pound ($77 million) deal between Aston Martin and China Equity to develop its zero-emission RapidE sports car.

Britain also plans to slash the price of visas for Chinese tourists in hopes of attracting more visitors.