Wednesday, August 10

China warns UK over £18bn nuclear power deal



China has issued its sternest warning yet to the UK that bilateral ties stand at a “crucial historical juncture” over London’s deferral of an £18bn nuclear power project.

Liu Xiaoming, China’s ambassador to the UK, drew a clear link between Beijing’s desire to see an early go-ahead for the controversial Hinkley Point power project and the future of the UK-China relationship.

“Right now, the China-UK relationship is at a crucial historical juncture . . . I hope the UK will keep its door open to China,” Mr Liu wrote in the Financial Times.

“I also hope that the British government will continue to support the Hinkley Point C project and come to a decision as soon as possible so that the project could go ahead smoothly,” he added.

The UK’s move last month to review the landmark deal, under which a Chinese consortium is due to part-finance the power station to be built by France’s EDF, threw into doubt a “golden era” of ties proclaimed during a visit to the UK by Xi Jinping, China’s president, last year.

Any cancellation of the Hinkley deal would be likely to jeopardise other planned Chinese investments in the UK, according to Chinese officials, who declined to be identified. Nearly £40bn in investment deals and contracts were secured for the UK during Mr Xi’s visit.

Noting that over the past five years, Chinese companies have invested more in the UK than in Germany, France and Italy combined, Mr Liu said that trust and respect needed to be “treasured even more” as the UK decides on the Hinkley project.

“If the UK’s openness is a condition for China-UK co-operation, mutual trust between the two is the very foundation,” Mr Liu said.

The deferral of the Hinkley Point project by Theresa May’s new government marked a shift in attitudes toward China. Chinese officials had regarded her predecessor, David Cameron, and his chancellor, George Osborne, as a “dream team” leadership that elevated relations to unprecedented heights.

Mrs May’s joint chief of staff, Nick Timothy, has previously voiced security, human rights and trade concerns about China, and said state-owned companies involved at Hinkley and other planned nuclear plants could “build weaknesses into computer systems which will allow them to shut down Britain’s energy production at will”.

Under Mr Cameron, the UK’s warmth towards China often frustrated allies such as the US, who urged a stronger stance to encourage Beijing to comply with international norms. In a potential test case, the foreign secretary Boris Johnson has yet to respond publicly to a ruling by an international court four weeks ago that there is “no legal basis” for China’s claim to almost the entire South China Sea.