George Osborne hails UK China agreements

Osborne: UK Guarantees £2bn for Hinkley
Osborne: UK Guarantees £2bn for Hinkley

Chancellor George Osborne has hailed a package of agreements with China which he said would make the City of London a "bridge" between the east Asian economic giant and the financial markets of the West.

And the Chancellor said that his approval of a £2 billion guarantee to underwrite Chinese financing of the Hinkley Point nuclear power station would pave the way for further deals which could see majority Chinese ownership of another nuclear plant at Bradwell in Essex.

Mr Osborne was speaking at the end of the annual UK-China Economic and Financial Dialogue in Beijing, which resulted in 53 agreements ranging from a £24 million joint space programme to Chinese support for the Chancellor's Northern Powerhouse scheme to boost the north of England.

The People's Bank of China is to issue short term bonds, denominated in the country's renminbi currency, in London - the first time this has been done outside mainland China itself.

And a feasibility study is to be launched on establishing a direct "stock connect" link between the London Stock Exchange and Shanghai's financial market.

Mr Osborne played down the risk of linking London's markets with the Shanghai exchange, which saw wild swings in stock prices over the summer. "I want the UK to be the natural Western hub for renminbi trading," said Mr Osborne at a press conference in the Chinese Government's lavish Diaoyutai State Guesthouse following his talks with vice premier Ma Kai.

Mr Osborne said that the new agreements will "firmly establish London as China's bridge into Western financial markets.

"Most significantly, the People's Bank of China will issue short term central bank renminbi bonds in London. This is the first time these bonds will have been issued outside greater China. This is a major step in developing this market infrastructure.

"I believe it cements London as the pre-eminent location for renminbi trading and Chinese investment in the West."