Manchester Airport to receive investment from China

George Osborne: "I see China as a great opportunity, not a threat"

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A Chinese company will be part of a group investing £800m in Manchester Airport to develop its surrounding business.

The news was announced as Chancellor George Osborne started a trip to China to promote UK business and encourage Chinese investors to consider the UK.

The move showed a government plan to do more business with the fast-growing economy was working, Mr Osborne said.

London Mayor Boris Johnson is also on a separate six-day visit to China.

He will meet political leaders and business chiefs in an effort to promote the capital's trade with the country.

Manchester Airport Group will work with the Beijing Construction Engineering Group (BCEG) as well as the UK's Carillion Plc and the Greater Manchester Pension Fund to develop the 'Airport City' project.

The development surrounding Britain's third busiest airport will include offices, hotels, manufacturing firms, logistics and warehouses. It is hoped that by attracting international businesses some 16,000 jobs could be created.

"I think it shows that our economic plan of doing more business with China and also making sure more economic activity in Britain happens outside the City of London is working," said Mr Osborne.

"That's good for Britain and good for British people," he added.

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It's why re-balancing the economy and re-industrialisation are easier said than done.”

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Mr Xing Yan, managing director of BCEG said "To be included in such an interesting and unique development is a real honour.

"We see our involvement in Airport City as an extension of the memorandum of understanding between China and the UK, where we have been looking to further explore joint infrastructure opportunities for some time."

'Huge opportunities'

During his trip Mr Osborne will visit Beijing and southern China.

Britain is one of the top 10 nations to attract Chinese investment - more than double the investment of any other nation in Europe.

Chinese investment is concentrated in the UK energy sector, although Barclays Bank, BP, Diageo and Thames Water also have Chinese backing.

Some UK companies are also controlled by Chinese groups - Bright Foods owns a 60% stake in Weetabix, the Wanda conglomerate owns 92% of Sunseeker boats and Geely Automobile owns Manganese Bronze, the company that makes London taxis.

Chinese firms have also recently made big investments in London.

Earlier this year, developer ABP announced a £1bn deal to redevelop the Royal Albert Dock in east London and this month the ZhongRong Group said it would be investing £500m to rebuild The Crystal Palace in south London.

Boris Johnson playing the drums London Mayor Boris Johnson showing his musical abilities on his tour of China

On Saturday, Mr Johnson said China's recent economic growth was "nothing short of staggering" and the opportunities that presented for London were "huge".

Last year 104,000 Chinese tourists visited London, according to the office of the Mayor of London. That is up 28% from 2011 and up 100% since 2009.

However business leaders have called for the visa application process for Chinese tourists to be simplified.

Currently, visitors can apply for a single visa to visit much of Europe - but a separate one is required to travel to the UK, leading to fears many are travelling to other European countries instead.

Nuclear deal

BBC correspondent John Sudworth, at Beijing Airport, said the two separate but simultaneous visits by UK politicians are being seen as a sign of a diplomatic thaw following an 18-month long chill in relations.

"China made no secret of its displeasure after UK Prime Minister David Cameron met the exiled spiritual leader of Tibet, the Dalai Lama, in London last year," he said.

Our correspondent said the trade missions were also a sign of the growing importance of China to the UK economy.

Both Mr Osborne and Mr Johnson are travelling with delegations of British businessmen, and the chancellor is also expected to announce details of planned Chinese investment in a British nuclear power plant.

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