Brown invites China's 'big red chequebook' to Britain

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Indy Politics

Gordon Brown has used a visit to Beijing to strike a deal under which Chinese investment will be warmly welcomed in Britain.

The Prime Minister believes the agreement, made yesterday, could create tens of thousands of jobs in Britain. Mr Brown wants the UK to be the "first location" considered by the China Investment Corporation – the £100bn sovereign wealth fund set up by the Chinese government to invest in or take over companies – and has invited it to open an office in London.

In return, British service industries, such as companies in the financial, insurance and legal sectors, will win easier access to Chinese markets and there will be a big push to sell household-name luxury goods to China's growing middle class. However, some countries, including the United States, have shunned the fund.

Mr Brown said he had won crucial a new concessions yesterday, that China's investments would be "open and transparent". Wen Jiabao, the Chinese Premier, said his government would not interfere in the fund's commercial business and tried to dispel fears that China's thirst for international expansion, by waving its so-called "big red chequebook", posed a threat to the world.

"China's development does not undermine any others'. We are busy enough in our own affairs," said Mr Wen at an informal public meeting with Mr Brown at the People's University in Beijing.

Mr Brown said: "Long-term Chinese investment coming to Britain is good news for the British economy, because it will mean more jobs for British workers. What's going to matter is whether these companies are investing for the future."

Ministers admit that the British Government will need to "sell" the idea to trade unions and workers who may be reluctant to be sold, in effect, to an authoritarian regime. But ministers say Britain's best hope of securing jobs in the global economy is to be open to investment from the world's fastest-growing major economy rather than to put up protectionist shutters.

The two leaders also agreed to set a target to boost trade between the UK and China by 50 per cent to £30bn by 2010.

Last night, Mr Brown and Mr Wen also announced a co-operation agreement on climate change under which Britain will provide £50m for China to experiment with ground-breaking energy efficiency technology, renewables, clean coal, as well as carbon capture and storage. The two nations will work together on building more "eco-cities".

After 15 hours of talks with Chinese leaders, Mr Brown dismissed criticism that he had gone soft over the country's record on human rights and democracy in order to land what he called "an enhanced strategic partnership" based on closer economic ties.

The Prime Minister claimed he had won pledges by China to press for a peace settlement in Sudan and for reform in Burma. He urged it to go ahead with promised elections in Hong Kong. Officials said he also urged China to ratify an international convention on political and civil rights and to increase the freedom of its press.

Earlier, Mr Brown told a news conference: "We want Britain to be the number one destination of choice for Chinese business as it invests in the rest of the world. I believe by 2010 we will see 100 new Chinese companies investing in the UK, we will see 100 partnerships between our universities and Chinese universities and we will double the number of firms listed on the London Stock Exchange and thousands of jobs will be created."