Chinese president’s visit to UK heralds ‘golden era’ in commercial ties
CHINESE President Xi Jinping heaped praise on Britain for what he called a “visionary and strategic choice” to strengthen commercial ties with China, as he prepared for a state visit to the UK that is expected to be richer in pomp and considerably warmer in tone than his recent trip to the US.
The trip comes at a time of global anxiety about China’s slowing growth. Mr Xi himself acknowledged “concerns about the Chinese economy”, but sought to allay them in a written interview with Reuters.
China itself was worried about the slowing of the broader global economy, Mr Xi said, even while he expressed confidence that China would weather the current downturn as it reshaped its economy to be more resilient in the future.
That confidence will be on display when Mr Xi arrives in London this evening to kick off a four-day visit that is expected to cement ties between Britain and China, including through a host of business deals.
“The UK has stated that it will be the western country that is most open to China. This is a visionary and strategic choice that fully meets Britain’s own long-term interest,” Mr Xi said.
His visit comes amid debate in Britain and other western countries over what is the best way to engage with a China that has grown more influential economically and diplomatically, but which maintains stances in areas from human rights to the South China Sea that are often at odds with those widely held in the West.
Such tensions were on display when Mr Xi visited the US last month, with friction over issues from cyber theft to China’s maritime disputes with its neighbours.
Mr Xi’s visit to Britain, during which he and his wife Peng Liyuan will stay at Buckingham Palace as guests of Queen Elizabeth II, is expected to be much warmer, with Mr Xi saying it could be the start of a “golden time” in bilateral relations.
Britain was the first western nation to join the China-led Asian Infrastructure Investment Bank (AIIB) earlier this year, leading to a stampede of other countries signing up and marking an embarrassment for Washington, which had been pressing its allies not to join.
Britain said joining the AIIB at the founding stage would “create an unrivalled opportunity for the UK and Asia to invest and grow together”.
British Finance Minister George Osborne set the tone with a preparatory visit to China last month, when he courted Chinese investment into Britain and won praise from Chinese state media for having the “etiquette” not to press humanrights issues.
Still, Mr Xi’s visit, the first state visit by a Chinese president since 2005, will not be without potentially awkward moments.
Newly installed opposition leader Jeremy Corbyn intended to bring up the issue of human rights when he met Mr Xi, his official spokesman has said.
Mr Xi called on Britain and other countries to avoid what he characterised as bias against Chinese companies, as Beijing supports firms in fields from high-speed rail to nuclear technology in efforts to compete for contracts overseas.
“We hope that such competition is benign and marketbased. There should be no swing doors or glass doors … placed as non-economic or non-market-based barriers.”
One deal expected to be inked during Mr Xi’s visit is a plan for two stateowned Chinese utilities to invest in a £16bn nuclear power project being built by French utility EDF in southwest England.
China has ambitions to sell its own nuclear technology overseas, including to western nations. While critics have said that Chinese government support, including cheap financing, for companies in that and other sectors could amount to unfair competition, Mr Xi defended China’s approach.
“Even under market conditions, countries support the growth of their companies in various ways, and such measures should not be all labelled as government subsidy.”
Mr Xi also underscored China’s readiness to strengthen financial co-operation with London, which aims to become an important hub for yuan trading and offshore yuan business and is set to be the first location outside China and Hong Kong to host the issuance of Chinese central bank and finance ministry debt.
“When conditions are in place, China is ready to consider strengthening the connectivity of the financial markets of the two countries,” he said.
Mr Xi acknowledged that the Chinese economy’s slowing was a concern.
Economists polled by Reuters expect growth to have slowed to 6.8% from a year earlier in the third quarter, the weakest pace since the first quarter of 2009 and below the government’s target of 7%. Gross domestic product figures are due to be published today.
Still, Mr Xi said that the slowing was normal as a part of structural adjustments, as the government sought to wean it off an over-reliance on investment in infrastructure and housing and to develop new drivers of growth, such as the services sector and hi-tech industry.
Mr Xi said the monetary easing steps China had taken to date, as well as its adjustment to the exchange-rate mechanism for the yuan in August, which was accompanied by a devaluation of the currency, had helped to defuse risks.
“Going forward, we will deepen market-oriented financial reforms according to law to cultivate an open and transparent capital market that enjoys long-term, stable and sound development,” he said.
Mr Xi said China would continue to seek to attract foreign investment, improve the rule of law to enhance the business environment, protect intellectual property rights and promote fair competition.
China has rattled nerves around the region and prompted concern in western capitals about its increasingly assertive moves to push its territorial claims in the South China Sea, including the construction of artificial islands.
Mr Xi was unequivocal in his defence of China’s right to develop the areas it claims as its own. But it was not in China’s interests for there to be instability in the South China Sea, he said.