The UK government and city leaders are tempting China with $36.5bn (£24bn) worth of investment opportunities in the north of England to help rebalance the country’s economy and alleviate the dominance of London.
Infrastructure and regeneration projects such as the Atlantic Gateway, a scheme to link the Port of Liverpool to Manchester, and Science Central, a research-oriented development in Newcastle, were dangled in front of Chinese investors today by UK chancellor George Osborne in Chengdu.
There is now an enormous opportunity to work with us on the massive investment in infrastructure we expect to see over the next decade– Sir Richard Leese, leader of Manchester City Council
Osborne, on a five-day trade mission to China, was joined by mayors and council leaders from famous northern English cities that suffered industrial decline in the last century, including Newcastle, Liverpool, Leeds, Manchester and Sheffield.
The investment pitch comes a day after China’s Hualing Industry and Trade Group said it would inject an undisclosed sum to support major real estate projects together worth $1.8bn in Manchester, Leeds and Sheffield.
Also today Osborne urged Chinese firms to bid for contracts together worth $18bn on the UK’s proposed new high-speed rail network, HS2.
Ahead of next month’s visit to the UK by Chinese president Xi Jinping, Osborne said there was an "unprecedented opportunity" for Chinese investment in support of his so-called "Northern Powerhouse" plan to help the north of England catch up economically with the south-east of the country.
"As we continue to work more closely with China, we have an unprecedented opportunity to secure significant investment into some of our most ambitious projects across our Northern Powerhouse," Osborne said.
"From Liverpool to Newcastle, we are opening up our doors to investment that will not only help us to grow and create jobs, but will allow us to build infrastructure to rival any region in the world."
The UK’s Commercial Secretary to the Treasury Lord O’Neill said China could help England plan urban development.
"[It] is also about making sure we are cooperating and learning from China’s urbanisation experience, including the progress China has made in supporting and coordinating regional development and promoting the development of city clusters," he said.
Projects offered to Chinese investors include:
- Manchester Place: three new zones of more than 10,000 homes with a combined value of over £3 billion;
- Sheffield Retail Quarter: new city centre homes and centrally located offices;
- South Bank, Leeds: a regeneration scheme covering more than 130 hectares in the city centre.
Today’s invitation raises the prospect of more Chinese contractors working on UK projects financed by China, a model seen first in the UK on the $1.2bn (£800m) Manchester Airport City development.
There, Beijing Construction Engineering Group was appointed to work with UK contractor Carillion to build the 5-million-sq-ft development after the it secured financing from China’s largest bank, the state-owned Industry and Commercial Bank of China.
Today, the leader of Manchester City Council, Sir Richard Leese, said the involvement of the Chinese contractor "shows that there is an open door for Chinese business in the North".
"There is now an enormous opportunity to work with us on the massive investment in infrastructure we expect to see over the next decade," he said.
Photograph: Docks at Liverpool, one of the cities seeking investment for infrastructure development (Wikimedia Commons)