China has agreed not to use cyber-espionage to steal commercial secrets from the UK and its president spoke positively about improving human rights, following talks with David Cameron on the second day of the state visit.

Appearing side-by-side with Xi in Downing Street, the prime minister used a short press conference to brush aside concerns about working so closely with an undemocratic nation to announce unprecedented cooperation on sensitive issues of security. “I’m clear that the UK is China’s best partner in the west,” he said.

Cameron said that the cyber agreement is a first step towards wider potential security cooperation between China and the UK, in which each country will agree not to condone or conduct spying on each other’s intellectual property and confidential corporate information.

GCHQ has reported “disturbing” levels of cyber-attacks on British companies, which are thought mostly to originate in China and Russia. The deal also mirrors one agreed between China and the US last month, but which the American monitoring group CrowdStrike believes was violated almost immediately.

As Cameron hailed a new relationship between the countries, Xi struck a conciliatory tone as he said his country is ready to increase cooperation over the difficult issue of human rights. “Coming to the human rights issue, China attaches create importance to human rights. We have found a path suited to China’s conditions,” he said.

“There is always room for improvement in the world. China is ready to increase co-operation with UK and other countries over human rights.”

Xi also mounted a defence of China’s steel strategy against accusations it is dumping cut-price product on the market, which UK steelmakers have blamed for forcing them to close and mothball plants.

“I want to answer the steel question. The world is seeing an oversupply [of steel] following the financial crisis. China also has overcapacity,” he said. “We have taken a series of steps [to remedy this]. We have cut 700m tonnes of production capacity. You can imagine the task of finding jobs for those workers.”

The president made the comments after UK journalists were allowed a single question to each leader, allowing the BBC to press him on why the British public should be pleased about such a high level of cooperation with a country that has a deeply troubling record on human rights.



Cameron was also asked how a steelmaker who had lost their job might feel about the pomp and extravagance accorded to the Chinese president, when the country stands accused of helping fuel the crisis in the British steel industry.

The prime minister responded with a forthright defence of the UK’s decision to push for closer ties with China. “I reject the [premise] that you either have a conversation on human rights and steel or you have a strong relationship. I want both,” he said.

Downing Street confirmed Cameron raised the issue of human rights with China, which has been condemned internationally by campaign groups over the detention of hundreds of its critics earlier this year.

However, Cameron’s official spokeswoman refused to say how he approached the subject, whether he raised the plight of any particular people, and even whether the discussions lasted for longer than a minute.

Earlier, Ai Weiwei, the Chinese artist and activist who has in the past been detained by his government, suggested Cameron was being too accommodating on the issue of human rights.

“I think the British prime minister has had a record on putting human rights aside which is very bad strategy and also is a very bad aesthetics, because this certainly doesn’t represent the British people,” he told Sky.

Kate Allen, UK director of Amnesty International, said Xi’s comments about improving human rights were welcome but “a considerable understatement”.

“With more executions taking place in China than the rest of the world put together, with lawyers and human rights activists being arrested and disappeared, and with even the most modest forms of dissent being severely punished, the Chinese president should be promising wholesale human rights reform,” she said.

The talks focused on trade and foreign affairs, with the two countries discussing the potential for common ground on Syria in a conversation that is set to continue at Chequers on Thursday. The UK is thought to be seeking to persuade China not to vote in tandem with Russia at the UN as global leaders seek a resolution in the war-torn nation that does not involve Bashar Al-Assad.

The flagship announcement is a £6bn investment by a Chinese state company in the Hinkley Point nuclear power station in Somerset, which is due to be built by around 2025.



However, there were numerous other deals, including more than £12bn of oil and gas ventures. The biggest of these is a $10bn deal for Britain’s BP to supply China’s state owned power station, Huadian, with liquefied natural gas.

Other announcements involve a branch of the Legoland amusement park opening in Shanghai, an investment in the Royal Albert Docks regeneration by Chinese developer Advanced Business Park, a £2.6bn deal for Carnival to make new cruise ships, a £1.4bn for Rolls-Royce to supply engines and £2bn of healthcare deals between Chinese and UK companies, universities and organisations.

The Chinese involvement in Hinkley Point was questioned on national security grounds by Admiral Lord West – who served as a minister under Gordon Brown.

“I do have very real concerns looking to the future in terms of security,” said West, a former head of the navy and a counter-terrorism minister.

He told BBC’s Newsnight: “There are certain things that I think you need to control and you need to be sure that you can always deliver them to your people.”

It also emerged that Sir Andrew Witty, the chief executive of GlaxoSmithKline, will join a board to promote British-Chinese trade – a year after the company was handed a a $500m fine for bribing Chinese doctors.

