Chancellor aims to tap into China’s appetite for direct investment through co-funding and co-constructing projects round the world.
Opportunities for investment in the Northern Powerhouse were displayed for the delight and hopefully interest of Chinese investors as Chancellor George Osborne continued his visit to the country.
Osborne has already offering loan guarantees for £2bn of hoped for Chinese investment in Hinkley and has been offering opportunities on HS2. Northern Powerhouse is an obvious connection with the latter and as part of the HS2 discussion the Chinese have been invited on an HS2 ‘regeneration tour” visiting areas of commercial opportunity in London, the Midlands and the North.
"As we continue to work more closely with China, we have an unprecedented opportunity to secure significant investment into some of our most ambitious projects across our Northern Powerhouse" - George Osborne
Osborne presented Chinese investors with a selection of £24bn worth of investment opportunities in the North of England ahead of the upcoming State visit by President Xi in October.
Speaking in the city of Chengdu, the Chancellor said “there are unprecedented opportunities for Chinese investment into the Northern Powerhouse as the UK and China enter a golden era of economic cooperation”.
Infrastructure and regeneration investment projects such as the Atlantic Gateway – a series of projects connecting the Port of Liverpool to the City of Manchester; and Science Central, a cutting-edge development in the heart of Newcastle, are set out in a new Northern Pitchbook that was presented in Chengdu.
At the same time, Britain’s Northern leaders said a new wave of transformational Chinese investment can revolutionise Northern infrastructure.
Key projects for which investment is sought include:
Alongside the Pitchbook, the Chancellor also announced:
He said: “As we continue to work more closely with China, we have an unprecedented opportunity to secure significant investment into some of our most ambitious projects across our Northern Powerhouse. From Liverpool to Newcastle, we are opening up our doors to investment that will not only help us to grow and create jobs, but will allow us to build infrastructure to rival any region in the world.
“Visiting China with other Council leaders from across the North has enabled us to build on our existing strong relations with Leeds’ partner city of Hangzhou and to meet potential new partners for trade and investment" - Judith Blake, Leeds City Council
"The North of England is already a magnet for foreign investment into the country and we’ve seen with announcements from Nissan and Hitachi into the North East recently highlighting how perfectly poised our Northern Powerhouse is to attract the eye of global companies.”
Commercial Secretary to the Treasury Lord O’Neill said that the meeting with the Chinese was about compelling investment cases but also about learning from China’s experience of rapid urbanisation.
“Today is about making sure that the North is at the heart of our plans to grow investment into the country and we will be able to showcase compelling projects to ambitious Chinese investors,” he said.
“But it is also about making sure we are cooperating and learning from China’s urbanisation experience, including the progress China has made in supporting and coordinating regional development and promoting the development of city clusters.”
The Chancellor and team were joined by leaders of England’s northern cities including Leader of Leeds City Council Judith Blake. She said: “Visiting China with other Council leaders from across the North has enabled us to build on our existing strong relations with Leeds’ partner city of Hangzhou and to meet potential new partners for trade and investment.
"Bringing investment into our major regeneration and transport schemes across the North will deliver a long overdue boost to the economy providing many much needed job opportunities."
According to Pinsent Masons/Cebr ‘China Invests West’ report, Chinese businesses are now becoming co-funders and co-contractors in UK infrastructure projects, rather than making indirect investments through sovereign wealth funds.
"The Chancellor’s courting of the Chinese for HS2 is evidence of this in action and is part of a wider picture that has already seen considerable investment and involvement in several major redevelopment projects across the UK including in London, Manchester and most recently in Salford, Leeds and Sheffield,” said Pinsent Masons infrastructure director Jon Hart.
“We are already seeing this happen, such as Beijing Construction Engineering Group, which made a major investment last year in the £800M Manchester Airport City project.
“Four out of five of the world's largest construction and engineering companies are now Chinese, with a growing appetite for investment in advanced economies such as the UK due to its transparent business environment, under-capitalised infrastructure sector and close political ties with China,” he said.
“We are already seeing a growing number of Chinese investors partnering with UK firms, such as real estate developer ABP which has invested £1 billion in the Royal Albert Docks development in East London. In the coming years, we’re likely to see a rise in both real estate and energy projects, including offshore wind developments and other renewable power networks."
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