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George Osborne hails relationship with China amid questions over '£40bn' deals

Published 24/10/2015

Chinese president Xi Jinping has spent this week in Britain
Chinese president Xi Jinping has spent this week in Britain

President Xi Jinping's state visit has cemented the UK's position as China's "best partner in the West", George Osborne declared as he defended ministers' failure to address human rights and other concerns in public.

The Chancellor said the benefits to Britain of a "mature" relationship with the "great nation" were clear in a series of new commercial deals signed during the stay - though questions remained about a claim they were worth £40 billion.

Three days of red carpet wooing of Mr Xi aimed at fostering a "golden era" of relations with Beijing concluded with the football-mad leader being introduced to star players including Sergio Aguero at Manchester City.

He flew out of the country on Friday, with wife Madam Peng Liyuan, from the city's airport, where he and David Cameron had unveiled new direct flights to the Chinese capital, operated by Hainan Airlines.

Downing Street issued a list of 36 commercial deals agreed during the visit which added up to around £34 billion - with another £6 billion said to be tied up in agreements that could not be detailed because of commercial confidentiality or sensitivity.

Expectations of the total value went up rapidly during the visit, with Business Secretary Sajid Javid suggesting £25 billion, then Downing Street said £30 billion before Mr Cameron trumpeted the £40 billion figure at a business summit.

Among the biggest were a £6 billion Chinese investment in building two new nuclear reactors at Hinkley Point C, BP's agreement to supply £6.5 billion of liquefied natural gas, and £1.56 billion of Rolls Royce aero engines.

But the list appeared to contain some agreements - such as a memorandum of understanding said to be worth £1 billion for the creation of a "Garden of Ideas" in China - which had been announced previously.

The £6 billion value put on an investment deal with Oxford University on regenerative medicine research was said to have included funds "earmarked" for future commercial exploitation, not just the £1.5 billion initial injection.

Those of unspecified value involved BP, Cambridge Education Limited, Merlin, Tang Culture Group, Uppingham School and BBC Worldwide, Number 10 said.

A Financial Times analysis concluded the figures may have involved some "generous interpretation" to hit the total.

Cheering supporters of Mr Xi - apparently partly stage managed by officials - again outnumbered protesters in Manchester demanding action to improve China's record on human rights.

Mr Cameron said he raised Beijing's abuses in private talks with the president, as well as other contentious issues such as the collapse of the UK's steel industry in the face of cheap Chinese imports and alleged "dumping".

The Chancellor rejected claims that the Government has been "kowtowing" to Beijing to secure its investment and had failed - unlike other European countries such as Germany - to discuss contentious issues openly.

"Whether it is long-term projects on nuclear power in the West Country, science in Manchester, manufacturing in Scotland, we've got billions of pounds of Chinese investment creating thousands of jobs in Britain," Mr Osborne told the BBC.

"And we've also now got a relationship where we can discuss difficult issues - whether it is the future of the steel industry, cyber security or indeed human rights - with the Chinese because we are having that dialogue.

"You can see the direct benefits in this country of that conversation: the 250,000 jobs that depend on Chinese investment and our relationship with that great nation."

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