SHOULD WE TRUST THE CHINESE?

Interesting articles have appeared across the media on Chinese investment in the UK, sparked by their offer to build a nuclear power station here. They will almost certainly insist on manning and running it, for that is what they have done in other countries where they’ve invested. So, who are the Chinese and should we trust them?

Xi-Jinping-china chinese people

The Chancellor, George Osborne, is in China to practice his bowing skills and negotiate a deal that will result in Chinese cash part-funding Britain’s newest nuclear power station. Hinkley Point C in Somerset is to be built to the blueprint of an already existing Chinese nuclear power plant.

China is a one-party communist state, and all their nationals who are allowed to travel abroad work for state owned companies and are party members. They swear an oath of allegiance to the state, and that is where their loyalties lie. When they invest in developing countries, most notably in over a dozen African states, they go straight to State House and hold behind closed doors meetings with those in power.

They are not interested in democracy, only in making deals. From Africa they want their minerals, from Europe they want to increase their power and influence. They are not motivated by personal greed, and therefore their values and motives remain hidden to clumsy Western politicians. In developing countries their deals consist of mineral and mining rights in exchange for infrastructure development (as I have witnessed from my time working in Africa). They will build roads, railways, clinics, schools, office and residential buildings, using local materials and labour, but with Chinese foremen, engineers, architects and other professionals. Work permits are usually hurried through in days, whilst other foreign workers are made to wait in frustration. They opened a black-windowed branch of Bank of China in the capital city I worked in, as they have nothing to do with Western finance systems, apart from assiduously collecting US dollars.

How does this system work in the UK? The answer is, we don’t know. What is being offered in exchange? What are they really after to increase their power and influence over us? They have seen our weakness – money. I would hope that personal inducements to our leaders would be politely declined, but who knows? Our politics in the West are supposed to be open to scrutiny from civil society and the media, who report back to the citizens. The Chinese have state-owned media and control access to the internet. They will feel uncomfortable at their deals being made public, and will try to control the information flow, posing a challenge to our journalists.

This is a clash of cultural inducement practices – the secretive but direct; ‘How much do you want?’ approach of the Chinese versus the; ‘We would want contracts for private firms’ gambit favoured by our politicians, with one eye on future directorships. They are patient and will play a long game to get what they really want. Witness the last Governor of Hong Kong, Chris Patten, threatening to sell off military land in key strategic locations, unless the Chinese agreed to allow democratic elections and a system of self-government in the former colony. They were not happy at being forced into a corner. Now, a few years down the line, witness the democracy protests being crushed and a loyal party member appointed as effective Governor. They get their way in the end.

Practically all UK and US political decisions are based on capitalist values, thinly dressed up as ‘the public good’. This is a cause for concern, because with opening the door to Chinese ‘investment’, we are opening the lid of Pandora’s Box. Their politics are based on growing the power and influence of a one party state, and their citizens are voiceless cogs in the machine. Our power stations, utilities, air and sea ports are seen as key strategic assets, and any foreign ownership should be questioned. We are dealing with a largely secretive communist state that has only recently emerged from being a closed society to calmly taking up its position as a major World power. They have joined our game, but they have their own rules.

Our political leaders are like pioneering spacemen encountering an alien species for the first time, inquisitive and seemingly friendly, but a complete cultural unknown. Smile and say hello… just before it bites your head off.

OTHER CHINESE INVESTMENTS IN TRANSPORT, PROPERTY AND UTILITIES:

 

In October 2013, it was announced that Beijing Construction Engineering Group would be investing £800m into a new area of Manchester Airport called Airport City. The development will provide logistics, manufacturing, office and leisure facilities for Britain’s third busiest airport.

 

In October 2012, 10% of Heathrow Airport was sold to the China Investment Corporation – China’s sovereign wealth fund. The deal took ownership of Britain’s busiest airport to more than 40% controlled by the Chinese, Qatari and Singaporean governments.

 

Britain’s busiest port – Felixstowe in Suffolk – has been wholly owned since 1994 by Hutchisons Port Holdings, a subsidiary of Hong Kong-based CK Hutchison, run by Chinese-born magnate and billionaire Li Ka-shing. The port has its own police, fire and ambulance services.

 

In 2012, China Investment Corporation – the state-owned fund responsible for managing the country’s foreign exchange reserves – bought a 9% stake in Thames Water, which provides and manages the water supply for 15 million people in and around London.

 

Northumbrian Water, which provides water and sewerage for 2.7 million people in Northumberland, Tyne and Wear, Durham, parts of North Yorkshire and parts of Essex and Suffolk is wholly owned by a subsidiary of CK Hutchison.

 

Veolia Water, a France-based company that owns a small part of the UK water firm Affinity Water, is itself 10% owned by SAFE-IC, the Hong Kong subsidiary of China’s State Administration of Foreign Exchange. Affinity provides water to 3.5 million people in Bedfordshire, Berkshire, Buckinghamshire, Essex, Hertfordshire, Surrey, and six London boroughs.

 

In December 2012, China’s State Administration of Foreign Exchange (SAFE-IC) bought almost half of the Co-operative Group’s future headquarters in Manchester, called One Angel Square. It also bought 40% of UPP Group Holdings, a major provider of student accommodation in Britain and 100% of City of London glass and steel office block Drapers’ Gardens.

 

Until earlier this year, China Investment Corporation (CIC) owned 19% of Songbird Estates, the parent company of London’s Canary Wharf, home to many of the UK’s largest banks including Barclays and HSBC. It eventually sold up after a bid from a Qatari company. CIC still owns 100% of the City of London headquarters of Deutsche Bank, according to Pinsent Masons LLP.

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