Britain must respect Chinese investors, says head of UK manufacturing body

By William James

LONDON (Reuters) – Britain must respect Chinese investors, whose vast wealth may be crucial to the future of the economy, the head of the British manufacturing organization said on Tuesday after a last-minute delay on a partly Chinese-funded nuclear deal.

Prime Minister Theresa May decided last week she wanted more time to review a deal to build the country’s first nuclear power plant in decades – a project funded by French utility EDF and Chinese partner China General Nuclear.

The unexpected delay has raised concerns that her new government takes a sterner view of Chinese investment which had been a source of cash courted by her predecessor David Cameron.

Terry Scuoler, head of Britain’s manufacturing trade body the EEF, said the delay was understandable but it could not be allowed to deter Chinese investors from putting much-needed cash into areas such as Britain’s ageing network of power plants.

“It’s not unreasonable that the prime minister puts her foot on the ball and surveys the playing field here,” he told Reuters in an interview.

“But, equally, relationships have been built up with the Chinese and they have been given to expect a level of access and support and partnership and that needs to be considered very carefully in her thought processes.”

A decision on the deal for the Hinkley Point reactor is expected in September. For the Chinese firm, it has been seen as a foot in the door to the British nuclear market, paving the way for another Chinese-designed reactor to be built in the future.

Underlining the need for investment, Scuoler said he expected factories to suffer power shortages over the winter in Britain as a result of low capacity surpluses caused by a failure to replace old, coal-fired electricity plants.

China, he said, could have a key role in helping to rebuild the country’s infrastructure, provided the money was invested in a way that was in both countries’ interests.

“Chinese investment in the UK is critically important. It is growing. The Chinese government has the largest sovereign wealth fund in the world today,” Scuoler said.

“Access to that fund on a partnership basis should, and hopefully will, be very important for our economy, but it must be on a true partnership basis.”

(Editing by Stephen Addison)