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China trade ‘more important than ever to the UK’

Ma Kai and Philip Hammond

Chancellor Philip Hammond has described the UK’s relationship with China as “more important than ever”, as he hosted the country’s vice-premier for trade talks in London.

He promised a “golden era” of relations, with the announcement of several deals.

Vice-Premier Ma Kai added that he wanted to see the UK and EU reach a “win-win” deal over Brexit.

Formal talks on the UK’s departure from the EU are due to start next year.

As the meeting took place in London’s Lancaster House, it was announced that the Chinese contractor CITIC Construction would invest £200m in the first phase of the £1.7bn London Royal Albert Docks project, headed by the Chinese developer ABP.

And the UK will in turn invest up to £40m in the Asian Infrastructure Investment Bank based in Beijing, for a fund to help developing countries to prepare infrastructure programmes.

Mr Hammond said it was important for the UK to tap into the Chinese market, with the country’s middle class population expected to reach 600 million in the next few years.

Trump tariffs

He added: “Our trade relationship with China is now more important than ever.”

Mr Ma said: “China wishes to see a UK and Europe that encourage stability and high prosperity. China will be happy to see the UK and Europe reach a win-win relationship through negotiation.”

US President-elect Donald Trump has said he wants to apply 45% tariff barriers to Chinese imports in an effort to protect free trade.

Media captionPhilip Hammond promises ‘constructive’ US talks

But Mr Hammond told the BBC: “Britain’s always believed that the best way long-term to protect and promote prosperity is free markets and free trade.

“President Trump has just been elected by the American people. He will want to consult with his advisers, talk to officials and I’m sure we will have a very constructive dialogue, as we do with the Chinese, with the new American administration.”

He added: “It’s about getting the right balance in the global trading system, so that we can have the benefits of open markets, while being properly and appropriately protected.”

One of Theresa May’s first acts on becoming prime minister during the summer was to order a review of the project to build Hinkley Point C, in Somerset, part-financed by China.

Writing in the Financial Times in August, Liu Xiaoming, China’s ambassador to the UK, said: “If Britain’s openness is a condition for bilateral co-operation, then mutual trust is the very foundation on which this is built.

“Right now, the China-UK relationship is at a crucial historical juncture. Mutual trust should be treasured even more.”

The UK government approved Hinkley Point C in September, saying it had imposed “significant new safeguards” to protect national security.

After the London meeting, Mr Hammond said the deal would attract £6bn of investment to the UK, and Mr Ma described giving the go-ahead for the project as a “big encouragement” to further trade ties.