The current “golden era” of UK-China ties began not with Xi Jinping supping a pint of warm beer with then-premier David Cameron in a traditional (southern) English pub. Nor was it sparked by the pomp and pageantry extended to the Chinese leader on that 2014 state visit.
The real catalyst, according to Chinese diplomat Sun Dali, was the president’s journey to the altogether less glamorous reaches of England’s former industrial heartland: Manchester. The northern city of half a million people and its surrounding area dominated the global cotton trade in the 19th century, driving the Industrial Revolution and underpinning the power of the British Empire. Today, the region bears deep scars from the collapse in UK manufacturing under the pressure of cheap imports from emerging nations such as China. This decline has been amplified by decades of government neglect and underinvestment.
In a bid to revive the region and rebalance the economy from its lopsided focus on the south, Cameron’s government launched the “Northern Powerhouse” initiative. The plan calls for investment into infrastructure, science and innovation, though the commitment of the Conservative administration to the traditionally left-leaning north of the country has been called into question.
Enter Xi, the Chinese government’s “Go Global” directive to the nation’s businesses and a mountain of foreign currency reserves in need of a home overseas.
The “Northern Powerhouse” initiative, is bringing Chinese investments totaling US$30 billion to the north of England, Manchester-China Economics Conference delegates were told last month.
The conference, held in central Manchester in partnership with Manchester Airport, the Manchester China Forum and the Chinese Consulate, was attended by 300 people from Chinese and UK businesses and government.
“More and more Chinese companies have started to focus their attention on the north of England and more and more Chinese provinces and cities are exploring cooperation opportunities with the northern region,” said Sun, who heads China’s consulate general in Manchester.
Since 2013, Chinese Beijing Construction Engineering Group has agreed to undertake three major projects in the region — at the Airport City — the UK’s biggest urban regeneration project since the London Olympics, Middlewood Locks and St. Michael’s developments — and in December last year, leading Chinese aviation company Beijing Institute of Aeronautical Materials signed a partnership deal with the University of Manchester’s National Graphene Institute on a Chinese-funded research program that aims to revolutionize aircraft manufacturing.
Earlier in 2015, NetDragon Websoft, a developer and operator of online games and mobile internet platforms in China, acquired Promethean, a world leader in interactive learning technologies based near Manchester market, while Hualing Industry and Trade Group recently announced plans to invest £120 million (about US$150 million) in real estate projects in Manchester and in the nearby cities of Leeds and Sheffield.
Manchester’s sporting sector has also been targeted. China Media Capital led a Chinese group that paid US$400 million for a 13% stake in Manchester City Football Club.
Chinese tourism to the north of England has been boosted after Hong Kong’s Cathay Pacific revived direct flights from Hong Kong to Manchester two years ago. Hainan Airlines began a direct flight from Manchester to Beijing. Air traffic between the UK and China is set to increase further after the two governments agreed to allow up to 100 flights a week, up from 40. There will be no limit on cargo planes.
The number of Chinese tourists to the north doubled in 2015 to 64,000, with the visitors splurging £83 million, Sun said. Students applying to universities in the consulate’s catchment area had jumped 40% since Xi’s visit, he said.
Howard Bernstein, chief executive of Manchester council, told delegates how these tourism and trade opportunities were a way for the UK to create new trade links vital to its post-Brexit economy. Local businesses need to understand the groundswell of interest in the Northern Powerhouse initiative, he said.
“I have been to China four times over the last six months and I’ve been quite staggered by the number of people who have wanted to talk about the Northern Powerhouse,” he said.