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An envoy champions UK China relations

Updated: 2014-10-25 06:05
By Cecily Liu (China Daily)

An envoy champions UK China relations

Zhou Xiaoming (right) chairs a business seminar in North East England. [Photo by Cecily Liu / China Daily]

In 2012, two Chinese nuclear companies formed consortiums with their respective partners to bid for the UK's Horizon nuclear programs, but unfortunately withdrew their intention before the bidding process finished.

But Chinese companies' intention to enter the UK market did not end. Encouragingly, two Chinese nuclear power companies have reached an agreement to invest in the UK's first nuclear power stations in two decades, a milestone move that will demonstrate the strength of the Chinese nuclear industry in Western countries.

The two planned reactors are at Hinkley Point C, in Somerset. Led by EDF Group of France, they will cost 14 billion pounds, and are due to start operating in 2023 if built on time and will run for 35 years.

China General Nuclear Power Group and China National Nuclear Corporation are expected to have a combined 30 to 40 percent stake in the consortium, with Areva taking another 10 percent. Exact plans for cooperation at Hinkley Point C are expected after a European Commission decision on UK state aid for the project is made.

Zhou is optimistic about the future of Chinese nuclear investment in the UK, saying that Chinese nuclear companies have great management skills to share with the UK's nuclear industry.

"China is continuously building nuclear reactors so Chinese companies have the knowhow to finish projects on time and on budget. This skill is very valuable to the UK, because delaying nuclear projects can lead to escalating costs," Zhou says.

Like nuclear power, China's high speed railway sector also has great technology and management expertise to share with the UK, although the time scale of the UK's high speed railway projects means Chinese companies are not seeing immediate entry opportunities just now, Zhou says.

Known as High Speed 2, the British high speed railway is planned to link London with English Midlands and North England cities. Construction for phase one of the project is set to begin in 2017 with an indicated opening date of 2026.

In the financial services sector, Zhou is relieved to see the significant growth of Chinese banks in London in recent years, and more so the UK government's support for Chinese banks to open branches in London.

Since the financial crisis in 2008, Britain's financial services regulator, has made it difficult for foreign banks to set up branches in the country.

Branches are offshore arms of foreign banks, so their lending and financing abilities are proportional to their parent companies' balance sheets. Subsidiaries, in contrast, are subject to the strict capital requirements that apply to Britain's local banks.

"When I arrived in the UK in 2009 many Chinese banks explained to me that inability to establish branches is a big problem that restricts their growth," Zhou says.

In subsequent years, Zhou helped to facilitate the dialogue between the two governments to help Chinese banks.

"I explained to the UK regulator that Chinese banks greatly support the growth of Chinese investment into the UK, and as well they play a significant role in helping London to become a significant offshore renminbi center," Zhou says.

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