Monday, 19 October 2015

中国在你的手 - China in your hand

The UK visit of the president of China, Xi Jinping, will have its controversial moments although some topics have been deemed not suitable for open forum discussion.

With his wife, he'll be staying in the Belgian (aka Honeymoon) Suite in Buckingham Palace, getting a 103 gun salute and white-tie banqueting with the Queen's and many of her family as well as a variety of senior politicians.

On the heels of Osborne's China trip, the agenda is to secure trade linkages, notably so that UK becomes the global offshore finance centre for China. The construction work on the new Asian Business Port area in east London's Albert Dock has started, although it's all looking somewhat flat at the moment.

Osborne has already announced the Hinckley deal for the new Chinese-built nuclear power station, along with the UK tax-payers' £2bn subsidy to get things started. The Chinese also get to build a second power station over in Essex.

The whole nuclear power thing is awash with subsidies and weird pricing, so it is quite difficult to really fathom out what is happening. Even the fella at DECC who oversaw what was happening was previously at KPMG (the financial advisors to the deal) and returned there after the outline agreements had been struck.

China has been canny at spotting the areas for negotiation with Britain, whilst casting an eye across Germany and France. Much easier to negotiate when there's other options lingering in the background.

So we'll probably get both a lumpy red carpet and some twisty and labyrinthine agreements from this visit.

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