4 October 2013
England could benefit from a Chinese investment of £650m to develop a new business district at Manchester Airport but the deal would guarantee contracts for Chinese firms, according to a newspaper report.
China’s largest bank, the state-owned Industry and Commercial Bank of China (ICBC), would back consortium developer Argent and contractor Carillion to build the development.
Some of the construction contracts would, however, be guaranteed for Chinese companies, according to an exclusive report by UK newspaper The Financial Times (FT).
ICBC is expected to sign the deal when George Osborne, chancellor of the exchequer, flies to Beijing next week, just a day after London’s mayor Boris Johnson’s own visit to China to further trade and investment with the country.
Airport City Manchester told GCR today that news of the Chinese investment had not yet been confirmed and they would make an announcement in the next few weeks.
The news comes a day after the London mayor welcomed a proposed £500m investment from Chinese developer ZhongRong Group to develop and rebuild the Victorian architectural icon, The Crystal Palace in the south of the city.
The airport development would transform 150 acres of scrubland into offices, industrial units, hotels, retail and leisure facilities (Credit: Airport City Manchester)
The tying of Chinese investment in UK infrastructure to contracts for Chinese companies was predicted in GCR in June by Beijing-based advisor to Chinese state-owned firms, Shourav Lahiri, a partner with law firm Pinsent Masons.
In the US negotiations collapsed in April this year between a Chinese state-run bank and a US homebuilder for a $1.7bn loan to build major housing developments in San Francisco. It was reported that disagreement over conditions guaranteeing work for Chinese firms had contributed to the deal’s failure.
In Manchester the airport development would transform 150 acres of scrubland into offices, industrial units, hotels, retail and leisure facilities making up a "downtown" district surrounding a 13-acre park.
The FT said the government expects the deal to "mark a fresh wave of investment by China in UK infrastructure" which could include investing in the UK’s new nuclear reactor programme.
Manchester has the third busiest airport in the UK with over 19 million passengers passing through its doors each year.