Chinese investment in UK raises security fears
‘We may not always agree, but we can discuss issues openly and constructively.’
IF CHINESE President Xi Jinping ends his state visit under the impression that Britain is obsessed with period dramas, time travel and spies who drive around in fantastically exotic sports cars, it will be thanks to a visit he paid to an exhibition.
As Xi and his wife Peng Liyuan toured the exhibition at Lancaster House, led by the Duke and Duchess of Cambridge, they saw displays promoting James Bond and Doctor Who, two British creations whose export value to the country has never been understated. They were also given a sneak preview of a scene from the next series of the highly successful television show Poldark.
As the visitors arrived, the first sight to greet them at the UK Trade & Investment exhibition showcasing creative collaborations between Britain and China was the Aston Martin DB10 car, which features in Spectre, the latest James Bond film.
Inside the exhibition, which also featured a Tardis and a Dalek from Doctor Who, the official party was shown two London icons: a black cab and a double-decker bus. None of this was entirely accidental.
Aston Martin has announced a £50 million deal with China Equity to develop its low-emission Rapide sports car, while Geely, the owner of The London Taxi Company, a Chinese business, has announced a further £50 million investment to enhance its research capabilities and launch a fleet of black cabs that will be capable of zero emissions.
Alexander Dennis, the British bus builder, is to join forces with Chinese company BYD, which built the prototype bus on display, to build 200 London buses over the next 10 years.
The cosy relationship between the Duke of Cambridge and the Chinese paid further dividends when United for Wildlife, the duke’s conservation charity group, signed a deal with Chinese company Sanpower to support rangers in the fight against poaching in Africa.
Meanwhile, British Prime Minister David Cameron hailed a promise from Beijing to stop stealing Britain’s economic secrets as he signed a nuclear deal with a Chinese firm linked to cyberespionage.
Cameron waved aside security fears and objections over China’s human rights record to welcome the £6 billion investment that could lead to construction of Britain’s first new nuclear power station in a generation starting within weeks at Hinkley Point, Somerset.
The deal is the centrepiece Xi’s four-day state visit.
In a tightly controlled Downing Street press conference, Cameron listed the first fruits of his Beijing charm offensive, including a new ‘‘agreement on cyber-enabled commercial espionage’’. His official spokeswoman said both sides had agreed not ‘‘to conduct or support the cyber-enabled theft of intellectual property, trade secrets or confidential business information’’.
Downing Street insisted that the agreement, which mirrors a similar deal struck between China and the United States last month, was not motivated by fears that growing nuclear co-operation could compromise national security.
However, one of three firms named last year in a US investigation
of into cyber-espionage has signed a tie-up with Rolls-Royce to co-operate on civil nuclear power projects.
The US said SNPTC benefited from trade secrets stolen in hacks by the Chinese military.
China agreed to clamp down on industrial cyberspying in the face of Washington threats to sanction companies caught spying.
SNPTC is part owned by China General Nuclear (CGN), another government-controlled company, which will take a one-third stake in the £18b project to build the Hinkley C power station. The deal also includes plans to build a second new nuclear station at Sizewell in Suffolk and a third, using Chinese technology, at Bradwell in Essex.
China hopes that a British licence will help to unlock other foreign markets for its nuclear technology.
Worries that Cameron is compromising Britain’s security as well as its moral and international standing have been raised by many leading figures, including his own former adviser Steve Hilton. A crisis in the British steel industry, blamed in part on Chinese ‘‘dumping’’, has added additional controversy.
Both leaders defended their deepening ties at the press conference, during which they took just two questions.
‘‘I totally reject the idea you either have a conversation about human rights and steel or you have a strong relationship with China,’’ said Cameron. ‘‘The stronger the relationship between our countries, the more we will be able to have a serious dialogue. We may not always agree, but we can discuss issues openly and constructively.’’
Xi was unapologetic about the effect of Chinese exports on the British steel industry, which has suffered 4000 job losses in two weeks, pointing to the effects of a global glut of steel on his own country’s workforce.
Outside investors from the Middle East, including Saudi Arabia and Qatar, could join China in helping to bankroll the Hinkley Point project. JeanBernard Levy, chairman of EDF, the French state-controlled energy company, said it would initially take a two-thirds stake but would later reduce this stake to 50 per cent plus a controlling share.
The EDF boss also brushed aside security concerns, arguing that British security agencies would apply strict conditions to foreign investment and keep a close eye on cybersecurity.