Foreign and Military Affairs

Remove investment barriers: Ambassador

By Zhang Haizhou (China Daily)
Updated: 2011-06-27 08:00

LONDON - China's ambassador to the UK said ahead of Premier Wen Jiabao's visit that London should avoid politicizing investment from Beijing.

Liu Xiaoming urged the UK to further improve its investment environment when he spoke at a news conference on Tuesday, four days before Wen arrived in the UK on Saturday for a three-day official visit.

On Sunday, Wen attended the UK launch of the new MG6 Magnette car at Longbridge, Birmingham, where a plant belonging to the Shanghai-based SAIC Motor Co Ltd is located. The car is designed in the UK, made in China and assembled at Longbridge.

Liu said earlier that Wen's visit to the MG plant would "symbolize Chinese commitment to expanding cooperation with the UK".

"There's a lot of talk about getting more Chinese investment but we need more action," Liu said.

"We'd like to see the UK market more open. We do, from time to time, come across some difficulties and problems. I think a lot of things need to be done by the British side, in terms of further improving the investment environment for Chinese businesses."

Noting Chinese investment has been welcomed in the UK in recent years, Liu said he has also heard "some noises" that are "making false accusations about Chinese investment, politicizing Chinese investment, and labeling some Chinese companies as having military backgrounds".

His remarks referred to Huawei's failed efforts to provide mobile phone signals to London earlier this year.

Back in February, the leading global telecommunications solutions provider was reported to have made an offer to provide telecoms equipment as part of a partnership with UK mobile phone operators.

But the British government finally rejected the offer, which was worth up to 50 million pounds ($80 million), over "spying fears", because the Chinese firm was accused of "having military links", according to British media reports at the time.

Ren Zhengfei, founder and CEO of Huawei, was formerly a member of the People's Liberation Army.

Noting that such situations are "very unfair for Chinese business", Liu said Huawei had "created a lot of jobs" in the UK.

"I know some CEOs of British companies also have a military background, some are retired generals, can we introduce their companies to Chinese companies by saying these businesses have a military background?" Liu asked.

This kind of negative media coverage of Chinese investment "serves no point and does not help expand cooperation between the two countries", he said.

Wen's five-day European visit, which takes him to Hungary, the UK and Germany, began on Friday and he will witness the signing of business contracts and meet British Prime Minister David Cameron during the visit.

Britain is China's third-largest trade partner in the European Union and a major source of foreign investment. Bilateral trade reached $63 billion in 2010.

HSR a "flagship"

Liu also expressed China's willingness to help build a high-speed rail link between London and the North.

China has "the knowledge, expertise and experience", he said.

"We really need to identify flagship projects and the high-speed rail might be one of them," he suggested.

China is expected to have more than 13,000 kilometers of high-speed railway during the coming years. In mainland Europe, China has already confirmed cooperation projects with countries including Bulgaria and Turkey.

But in the UK, the financial benefits of building the rail link are still uncertain, according to an independent report.

A study commissioned by the all-party Transport Select Committee, carried out by Oxera, questioned the justification of the project, which has triggered fierce opposition from Tory members of parliament whose constituencies are on the proposed route.

Opponents of the plan seized on the document.

"This report shows that (Transport Secretary) Philip Hammond's high-speed rail project is going off the rails," the Daily Telegraph quoted Jerry Marshall, from Action Groups Against High-Speed Two, as saying.

But David Begg, from the Campaign for High-Speed Rail, told the London-based newspaper: "The closer people look at this issue the more they will see the benefits high-speed rail will have on the country as a whole."

A Department of Transport spokesperson said HS2 Limited, the company considering the case for high-speed rail services between London and Scotland, is "currently conducting a public consultation, which is due to close at the end of July".

"The Secretary of State will then take a decision on whether to go ahead with HS2 at the end of this year," the spokesperson told China Daily. "On current assumptions, main construction could start in 2017. It is far too early to say who would own or be contracted to build the infrastructure."