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New UK govt aims for closer ties with China

By ZHANG CHUNYAN (China Daily) Updated: 2015-05-19 11:37

Economic relations between China and Britain are expected to continue to boom and become even more active under the new Conservative government.

What is more, it is likely that they will achieve breakthroughs in cooperation in new areas and projects in the next five years.

Each government attaches great importance to the bilateral relationship, and both are eager to take advantage of opportunities to expand business cooperation.

China views Britain as an open, mature market and good destination for investment. Chinese investment in the UK has significantly widened in scale and range of sectors over the years. For example, in 2012, China Investment Corp, the sovereign wealth fund, acquired an 8.68 percent stake in Thames Water Utilities Ltd and a 10 percent stake in Heathrow Airport Holdings Ltd, the company that runs Heathrow Airport.

These infrastructure investments demonstrate that the UK is very open for business. Britain's open attitude makes it a great springboard for Chinese investment into Europe in strategically important sectors such as energy and infrastructure, where Chinese investors can initially demonstrate their credibility.

Over the past five years, while experiencing ups and downs in political relations, the coalition government has made China a priority market and sought to strengthen bilateral economic ties.

Britain was the first member of the Group of Eight to become a founding member of the China-initiated Asian Infrastructure Investment Bank, despite heated opposition from the United States.

London has also become the largest Chinese yuan offshore center outside Asia. For Britain, this change of direction has been driven by economic pragmatism. Britain considers China to be the most dynamic emerging market.

The Conservative Party won an outright majority in the House of Commons on May 8, and Prime Minister David Cameron has completed a reshuffle of the first Tory cabinet for 18 years.

Now with continued leadership from Cameron and Chancellor of the Exchequer George Osborne, the new government will continue to develop a long-term relationship with China.

Also, China and the United Kingdom are very complementary in terms of business cooperation as China has a huge market and strong manufacturing capacity and the UK has rich experience and advanced technology.

The UK has become China's second-largest trading partner in the European Union and is nearly doubling its investment in China. In 2015, China and Britain aim to expand bilateral trade to $100 billion from $80 billion in 2014.

The portion of trade that involved vehicles, aviation and communications expanded last year and China became Britain's largest supplier of electro-mechanical products. China also surpassed the UK to become Jaguar Land Rover Automotive Plc's largest single market.

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