Chancellor George Osborne today (Wednesday 23 September) became the first serving government minister to visit Urumqi in the region of Xinjiang, North West China, as he welcomed a major new investment in the Northern Powerhouse by a Xinjiang-based firm and announced a new aim to make China the UK’s second largest trading partner.
The Chancellor visited Hualing Industry and Trade Group which today announced its intention to provide the investment needed to unlock three major property projects in Manchester, Leeds and Sheffield with a gross value of £1.2 billion.
The three projects, which are being led by the UK’s Scarborough Group, are expected to create 18,000 jobs and enable the delivery of 10,000 much-needed new homes, helping to build the Northern Powerhouse.
The Chancellor’s historic visit came as he announced a new ambition to make China the UK’s second largest trading partner by 2025, potentially adding billions to Britain’s economy, as part of the government’s wider efforts to increase UK exports to £1 trillion a year and to get 100,000 more UK companies exporting.
According to the latest available trade figures from the Office for National Statistics, China is currently the UK’s sixth largest trading partner, with British exports to the country totalling £25 billion in 2013.
The government is clear that while it will be a challenge to raise the level of our trade relationship with China to this next level, we are determined to make this happen.
A key part of this is helping British firms take advantage of the huge potential benefits from China’s investment in new trade routes to the West, which is why – during his visit to Urumqi – the Chancellor also launched a new study by the China-Britain Business Council and the Foreign Office which sets out the opportunities available to British companies alongside practical advice for UK firms on where the opportunities will be and how to start benefitting from them.
Entitled ‘One Belt, One Road’ after the massive new One Belt One Road Initiative (OBOR) to create new trading routes between China and Europe, the study includes advice for UK firms on the funding streams open to them to grow and develop in the region – including those created by the new Asian Infrastructure Investment Bank which the UK joined as a prospective founding member earlier this year.
Speaking on his visit to Urumqi, Chancellor George Osborne said:
China’s emerging regions, like Xinjiang, hold enormous potential in the years ahead.
That’s why I wanted to come here today to see this place for myself, and highlight Britain’s absolute commitment to support the growth of Urumqi together with the whole of the Xinjiang region.
We are building an ever closer relationship with China – it’s a partnership that is set to unleash growth and help regions like Xinjiang where we know investment can make a real difference, as well as unleash new growth back home, in places like our own Northern Powerhouse.
Kevin McCabe, Chairman of the Scarborough Group said:
We are delighted to join the Chancellor on this historic visit moreover we appreciate the invaluable support of the UK government in helping us to create closer global business links.
For Scarborough, this is the latest chapter in a long history in China, spanning over 13 years, during which time we have established strong relationships with local partners as the foundation for significant investments in China and the Far East.
As a family business with its roots in the North of England, we are now very proud to bring our partners in China to the UK to invest in our great Northern Cities and to accelerate the development of our major projects in Manchester, Leeds and Sheffield.
Our partnership with the Hualing Group is a new and exciting one for Scarborough and we look forward to working with them over the coming years to bring our Northern projects to fruition.
Stephen Phillips, Chief Executive, China-Britain Business Council said:
It is vital that the British business community understands what One Belt, One Road could mean in the short, medium and long term and to take action to position themselves to win business in the years ahead.
At the China-Britain Business Council we will work closely with businesses to seize these new opportunities.
Through the One Belt One Road, China aims to create six economic corridors, spanning over 60 countries that make up almost two thirds of the world’s population and account for a third of the world’s wealth
Xinjiang, over a 1,000 miles from Beijing, is roughly the size of Western Europe, and is set to be transformed by the OBOR.
Symbolic to the original Silk Road, Xinjiang’s position as the crossroad of Asia means it is perfectly placed to benefit from the increased connectivity and economic growth that this will bring.
As the capital of this important region, Urumqi also has real potential to become a major transport and logistics hub for central Asia as well as a centre for healthcare, finance, education and culture.
Discussions between Chinese and British business leaders are expected to receive a further boost during President Xi’s State Visit to Britain later this year.
The three projects where Hualing Industry and Trade Group and Scarborough Group have agreed financial terms, facilitating Hualing’s investment, are:
- Middlewood Locks, a £730 million residential project in Manchester incorporating a total of 2,000 residential units and circa 750,000 square feet of commercial accommodation
- Thorpe Park, a £400 million mixed-use project in Leeds
- Sheffield Digital Campus, a £40 million commercial and office development which will build 130,000 square feet of office space in the city
In total, the portfolio under discussion has a combined gross value of over £1.2 billion and therefore represents a very substantial investment opportunity, contributing significantly to jobs and growth in northern England.
Value of UK exports to 6 largest trading partners in £ billions
|UK exports to China by value (£billions)
*includes UK exports to Hong Kong
Source: ONS, 2013 figures
Read the One Belt, One Road report by the China-Britain Business Council and the Foreign Office (British Embassy, Beijing).