BP has announced a long-term deal to supply liquefied natural gas to China worth around $20 billion, in one of a number of trade deals announced during the visit of the Chinese Prime Minister to London.
The deal will see the oil and gas group provide state-owned China National Offshore Oil Corporation (CNOOC) with LNG for 20 years. Meanwhile, Royal Dutch Shell extended an agreement with CNOOC to work on energy projects around the world, including LNG.
Engineering company Rolls Royce has signed a memorandum of understanding with Chinese nuclear reactor manufacturer SNPTC to cooperate on civil nuclear power projects in the U.K. and other markets. The Derby-based firm currently supplies emergency diesel generators to almost 40% of all nuclear reactors in China that are in operation or under construction.
The London Stock Exchange (LSE) also signed agreements with the Bank of China and the Agricultural Bank of China to strengthen the Chinese Renminbi offshore market in the U.K. and to provide access to cash for Chinese companies.
LSE chairman Chris Gibson Smith said: “London is the world’s most international financial market and a natural partner to China in its ambitious global development.” At the end of last year, the Pime Minister led a delegation of 100 business executives to China, although Chinese state media dismissed the U.K. as “an old European country” and criticised policy on Hong Kong and the Dalai Lama. Since then, London-based Silvergate Media has signed a deal with state TV to broadcast Peter Rabbit; luxury furniture maker Duresta Upholstery has announced it will open three shops in China with more than 20 planned in 2015; and London-software company TestPlant has opened an office in China.
On Tuesday, China Minsheng Investment Corporation, a newly created private sector investment group, is expected to open its European headquarters in London, with $1.5 billion to invest in financial services, offshore projects, energy and environment.
Another Chinese financial services group, Nord Engine, is planning to invest £150 million to help Europe’s small and medium-sized tech companies get into the Chinese market. Bridget Walsh, head of Greater China business services for the U.K. and Ireland at Ernst & Young, said British companies had a “significant double digit opportunity” over the next few years in China. “We are not looking at doubling, we are looking at quadrupling [U.K. trade with China]”.
“The Chinese middle class are predicted to account for more than $6 trillion of global consumption over the next 10 years and that is a huge opportunity for British companies to take their brand to China”.
She highlighted two sectors where British companies were likely to do well. Clothing and food are likely to continue to grow as the middle class expands. Secondly, companies offering architectural or sustainable development services could benefit from China’s growing interest in improving quality of life in its cities.
© Guardian News & Media 2014
