Britain really rolled out
the red carpet this week for China’s President Xi Jinping. In addition to
the usual pomp, pageantry and banquets in white tie at Buckingham Palace and
the Guildhall in the City of London, there were an almost bewildering variety
of official visits to squeeze into the president’s four-day trip, from
universities to football clubs, from London to Manchester. Mr. Xi even
addressed both houses of Parliament, a privilege reserved for very few
dignitaries.
The
United Kingdom has a lot on the line here as it tries to embrace the world’s
second-largest economy. While the small UK market isn’t of much interest to
China, the Bank of England was the first G7 central bank to sign a swap
agreement with China’s central bank; Chinese commercial banks recently sold
offshore yuan-denominated bonds in the City; and on October 20th, the first
full day of Mr. Xi’s visit, China sold its first sovereign bond in London,
worth over $4 billion, reported the Economist.
China was
very happy that Britain became the first western nation to join the China-led
Asian Infrastructure Investment Bank in March.
And the
UK seeks to get some of the investment money China is throwing around, on Oct.
21st the government sanctioned a £6 billion ($9.3 billion) investment by a
Chinese state power company in a nuclear plant being built at Hinkley Point in
Somerset by the French company EDF with the promise of more nuclear deals to
come. There are also expectations that the Chinese will invest in several
projects to help develop a “Northern Powerhouse” of English cities.
Not
everyone in Britain is happy at the move to a closer relationship with China
and Britain risks alienating the US which criticized the recent moves as
separating Britain from America and undermining western resolve to stand up to
China in regions like the South China Sea, and on questions of human rights,
said the Economist. But in the end, human rights usually take a back seat to
economic interests. So whether the displeasure of the US has any effect remains
to be seen. By Asia
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