Brexit will af­fect Chi­nese in­vest­ment

China Daily (Canada) - - PEOPLE - By AN­DREW MOODY andrewmoody@chi­nadaily.com.cn

Peter Batey, one of the most se­nior Bri­tish fig­ures in the China busi­ness com­mu­nity, says Bri­tish Prime Min­is­ter Theresa May should not lis­ten to ju­nior ad­vis­ers when de­ter­min­ing Sino-UK re­la­tions.

The Bri­tish gov­ern­ment has been ac­cused of Sino­pho­bia over the de­ci­sion to re­view whether to build the Hink­ley Point C nu­clear power sta­tion in which China would be a ma­jor in­vestor.

May’s chief of staff Nick Ti­mothy is said to want a more dis­tant re­la­tion­ship with China than the one en­vis­aged when Chi­nese Pres­i­dent Xi Jin­ping vis­ited Bri­tain in Oc­to­ber.

“I would hope that min­is­ters were mak­ing th­ese de­ci­sions, not 30-yearold kids who have th­ese ad­vi­sory po­si­tions in No 10 (Down­ing Street),” he says.

Batey, who is founder and chair­man of Ver­mil­ion Part­ners, and who was a po­lit­i­cal pri­vate sec­re­tary to former Bri­tish prime min­is­ter Ed­ward Heath, says the Bri­tish gov­ern­ment needs to make clear the re­view is tak­ing place for eco­nomic and not se­cu­rity con­sid­er­a­tions if it is to avoid dam­ag­ing re­la­tions be­tween the two coun­tries. May has now at­tempted to dampen down the con­tro­versy with a per­sonal let­ter de­liv­ered to the Chi­nese Pres­i­dent.

“I think there will be tremen­dous dam­age to the bi­lat­eral re­la­tion­ship if it doesn’t go ahead. The gov­ern­ment should say plainly it is an eco­nomic is­sue, not let this im­pres­sion build up that it’s a se­cu­rity one in­stead.

“There re­ally ought to be some con­sis­tency be­tween the po­si­tion of one Con­ser­va­tive gov­ern­ment and the next. I don’t like to see th­ese great os­cil­la­tions in pol­icy. Af­ter all, a Bri­tish gov­ern­ment made this (the Hink­ley Point in­vest­ment) a cen­tral fea­ture of the Chi­nese pres­i­dent’s state visit, so they have to rec­og­nize their ac­tions have con­se­quences for lead­ers of other coun­tries as well.”

Batey, a former chair­man of the Bri­tish Cham­ber of Com­merce in China, who last year was awarded the Com­pan­ion of the Or­der of St. Michael and St. Ge­orge for ser­vices to Sino-UK re­la­tions, says it is wrong to present former prime min­is­ter David Cameron and chan­cel­lor Ge­orge Os­borne in want­ing to deepen UK-China re­la­tions as fol­low­ing an out­lier strat­egy.

“Is it not con­sis­tent with the ap­proach of, say, the Germans to China? They have main­tained a close re­la­tion­ship with China over a far longer pe­riod than we have. Look at the num­ber of vis­its Chan­cel­lor An­gela Merkel makes to China.”

Batey, 58, who was speak­ing in his of­fices in Bei­jing’s China World com­plex, says the China row only com­pounds Bri­tain’s de­ci­sion to leave the Euro­pean Union in the June ref­er­en­dum. num­ber of high-pro­file in­vest­ment deals in­volv­ing China and the UK. His firm ad­vised on the ac­qui­si­tion of English Premier League side West Bromwich Al­bion by Chi­nese en­tre­pre­neur Guochuan Lai, which was an­nounced ear­lier this month.

One of the big con­cerns about the UK leav­ing the EU is how it will im­pact on Chi­nese in­vest­ment in Bri­tain.

“It cer­tainly might af­fect it. One of the rea­sons why com­pa­nies from China or Asia — although not the only rea­son — in­vest in the UK is to have ac­cess to the Euro­pean mar­ket.

“On the other hand, China has been very suc­cess­ful in the Euro­pean mar­ket any­way. What is driv­ing most of China’s out­bound merg­ers and ac­qui­si­tions at the mo­ment is not re­ally mar­ket ac­cess but the ac­qui­si­tion of tech­nol­ogy. The prob­lem area for the UK could be fi­nan­cial ser­vices, whether in­sti­tu­tions who base them­selves in Lon­don can pass­port their oper­a­tions any­where else in the Euro­pean Union. So far, how­ever, there hasn’t been an enor­mous amount of Chi­nese in­vest­ment in the fi­nan­cial ser­vices sec­tor.”

The UK leav­ing the EU has a per­sonal di­men­sion for Batey as it was his former prime min­is­ter boss who was the un­doubted driv­ing force be­hind the coun­try join­ing the then Com­mon Mar­ket in 1973.

Batey has been in­stru­men­tal in pre­serv­ing Heath’s legacy, be­ing now be­hind the char­i­ta­ble foun­da­tion trust to pre­serve the prime min­is­ter’s former home Arun­dells in Sal­is­bury as a visitor at­trac­tion. This year is the cen­te­nary of his birth and there will be an event in Bei­jing next month to cel­e­brate this.

Does the Brexit de­ci­sion af­fect his legacy?

“Well, look in terms of any­body’s legacy, we were a mem­ber of the Euro­pean Union from 1973 and to at least 2016 and beyond. I think mem­ber­ship has con­trib­uted greatly to the pros­per­ity of this coun­try for that pe­riod. I think that in it­self is a sub­stan­tial legacy.”

He be­lieves those who think Bri­tain can cre­ate some new great Com­mon­wealth trad­ing bloc in­volv­ing Canada, New Zealand and Aus­tralia are not liv­ing in the real world.

“It is a folly. The Aus­tralian econ­omy is only a frac­tion of the size of the Bri­tish econ­omy and you have to look also at the dis­tances in­volved.”

Batey in­sists that be­ing a mem­ber of the Euro­pean Union never pre­vented Bri­tain do­ing trade with who­ever it liked any­way.

“In many ways we had the ab­so­lute per­fect deal with the Euro­pean Union, which is what makes it all such a shame. We had the bits of Europe that we wanted and not the bits we didn’t want. We weren’t in the sin­gle cur­rency, nor part of the Schen­gen pass­port area and we had opted out of ever-closer union.”

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