Spokeswoman confirms UK commitment to ‘strong relationship’ after Chinese official says relations are at critical juncture

Theresa May is determined to maintain close economic ties with China despite her decision to review the Hinkley Point C nuclear project, the government insisted on Tuesday, after Beijing’s ambassador warned that cancelling the investment could jeopardise relations with the UK.



A government spokesperson was keen to stress that the review of the £18bn Hinkley Point C reactor, which has been dogged by delays and questions over its cost-effectiveness, does not signal a general cooling of enthusiasm for China, which is due to part-fund the giant construction project alongside France’s EDF Energy.

“As we’ve already made clear, this decision is about a huge infrastructure project and it’s right that the new government carefully considers it,” the spokesperson said. “We cooperate with China on a broad range of areas from the global economy to international issues and we will continue to seek a strong relationship with China.”

Treasury sources added that Philip Hammond, who travelled to China last month for the G20 finance ministers’ meeting in his first overseas visit as chancellor, was no less committed to securing Chinese investment into Britain than his predecessor, George Osborne, who had promised to inaugurate a “golden decade” of cooperation between the two countries.

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However, the Treasury will be involved in the review of the project. The guaranteed electricity price agreed as part of the conditions of the deal, to persuade the Chinese and French firms involved to sign up, would have to be scored in the public finances as a tax.

The business secretary, Greg Clark, who will take on the energy brief as part of his newly expanded department and has a PhD in economics, is also keen to scrutinise the details of the project.

China’s ambassador, Liu Xiaoming, used an article in the Financial Times on Tuesday to warn that the prime minister’s move to delay a final decision on Hinkley had placed ties between the UK and China at a “crucial historical juncture”.

In the article, in which he set the project at the heart of Britain’s evolving trade relationship with China, Liu wrote: “If Britain’s openness is a condition for bilateral cooperation, then mutual trust is the very foundation on which this is built.

Facebook Twitter Pinterest Liu Xiaoming. Photograph: Luca Teuchmann/WireImage

“Right now, the China-UK relationship is at a crucial historical juncture. Mutual trust should be treasured even more. I hope the UK will keep its door open to China and that the British government will continue to support Hinkley Point – and come to a decision as soon as possible so that the project can proceed smoothly.”

France’s ruling Socialist party also has “cause for reservation” over Paris’s continued involvement in the project, it emerged on Tuesday. The party issued a statement saying it had “structural concerns” over state-owned EDF’s plans.

Osborne toured China last year touting opportunities for Chinese investors in the UK, and his commercial secretary, former Goldman Sachs economist Lord O’Neill, who left government after May’s arrival in Downing Street, was brought in partly to help woo the Chinese.

Such was Osborne’s enthusiasm for striking deals with China that the shadow chancellor, John McDonnell, quoted Mao Zedong’s Little Red Book across the dispatch box at him at last year’s autumn statement.

But May is thought to have concerns about security issues raised by China playing a role in such a critical piece of national infrastructure, as well as whether the project represents value for money.

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The shadow business secretary, Jon Trickett, said the new economic climate created by Britain’s planned exit from the EU meant that maintaining positive relations with Beijing was more important than ever.

“During the referendum, one of the few firm proposals coming from the Brexit camp was that Britain’s economic prosperity outside of Europe could be secured by furthering our relations with China and other large, fast-growing economies in the east. Today we see that the prime minister has put that – and £40bn of inward investment – in jeopardy by bungling negotiations over Hinkley Point,” he said.

Meanwhile, French unions have said the decision by EDF to invest in Hinkley Point C should be declared invalid.



Three unions at the firm said senior board members knew the British government was considering delaying its final decision, but nothing was said before last month’s vote on whether EDF should back the project.

Jean-Bernard Lévy, the chairman and chief executive of EDF, wrote to board members last week saying he knew about the delay before the board approved building and co-funding the first British nuclear site in a generation. And, just hours before a signing ceremony was due to take place at the site in Somerset, May put off government approval until early autumn.



