Brown hopes to seal Rover rescue with China mission

Click to follow
The Independent Online

Gordon Brown will meet senior Chinese industrial officials today to try to seal a deal that would guarantee the future of MG Rover and thousands of UK manufacturing jobs.

Gordon Brown will meet senior Chinese industrial officials today to try to seal a deal that would guarantee the future of MG Rover and thousands of UK manufacturing jobs.

The Shanghai Automotive Industry Corporation (SAIC), one of the country's biggest car makers, has offered to invest £1bn in the beleaguered UK company. But the deal is understood to have run into opposition from the National Development and Reform Commission (NDRC), which would need to approve the deal.

The Chancellor of the Exchequer will meet Ma Kai, the head of the NDRC, during his visit to Shanghai, China's largest city.

The deal would prevent the closure of the last British-owned car maker and the loss of 6,000 jobs, which would have a huge political fallout for Labour in the run-up to a general election.

Hopes were growing among the UK delegation in China last night that a deal could be signed before a likely 5 May election. "I hope it will be brought to a conclusion soon to the benefit of the British motor industry," the Chancellor is reported to have said in the Chinese capital Beijing.

A spokesman for SAIC said the corporation was hopeful the deal could be signed by "late spring". He said he could not comment on negotiations that SAIC was not party to. But he added: "We are glad the negotiations have the full support of the UK government."

Mr Brown is the latest in a long line of British ministers to lobby for the deal. Tony Blair wrote a letter to Wen Jiabao, the Chinese premier, in support of the deal six weeks ago. Patricia Hewitt, the Trade and Industry Secretary, John Prescott, the Deputy Prime Minister, and the Science minister Lord Sainsbury have lobbied for the venture.

A spokesman for Rover said media coverage was not helpful at a sensitive time in the negotiations.

Mr Brown pledged yesterday to quadruple British exports to China by 2010, primarily in financial services, education and science. This would take exports to £9.4bn a year and massively reduce the UK's £8bn a year deficit with China.

In a speech to the Academy of Social Science, the Chancellor said: "While others may wish to see China and globalisation as a threat, I see the rise of China and the new stage of globalisation not as a threat but an opportunity."

He also used his visit to reiterate the demands of the Group of Seven rich nations, which Britain chairs this year, that China should relax its fixed currency system. China has pegged its currency to the dollar for more than a decade despite a massive economic boom, which Europe and the US complain gives it an uncompetitive advantage.

The two countries issued a joint statement saying they would prepare a paper on the global economy at the G20 meeting, which China chairs, in October.

Comments