George Osborne, chancellor of the exchequer, announced Monday that the U.K. will guarantee a $3 billion deal under which China will invest in the Hinkley Point nuclear power station. Osborne's comments came during his five-day visit to China, which began Monday, to boost ties between London and Beijing.
Osborne, who has sought to portray his country as China's "best partner in the West” reportedly said that he hoped that the guarantee would pave the way for a final investment decision on the nuclear power plant project by French energy company EDF, supported by China General Nuclear Corporation and China National Nuclear Corporation.
"I am delighted to announce this guarantee for Hinkley Point today and to be in China to discuss their investments in Britain’s nuclear industry," Osborne said, adding: "Britain was the home to the very first civil nuclear power stations in the world and I am determined that we now lead the way again," according to BBC.
Under the deal, Chinese companies would reportedly receive a significant stake in the project while the U.K. government will act as guarantor for the investment. Osborne's announcement was hailed "as a clear sign of the Government's commitment to Hinkley Point C,” by EDF CEO Vincent de Rivaz.
According to reports, the nuclear project is likely to be discussed at the U.K.-China Economic and Financial Dialogue, which is being co-chaired by Osborne and Chinese vice premier Ma Kai in Beijing Monday, and there are hopes that a final decision would be made during President Xi Jinping's state visit to Britain in late October.
Earlier this month, EDF Energy announced that the construction of U.K.'s first new nuclear plant in 20 years had been delayed and that the Somerset facility will not start generating power in 2023. The announcement reportedly came after the French firm said in February that it had pushed back its decision on investing in the plant, which is expected to provide power to the U.K. for about 60 years.
"Nuclear power is cost-competitive with other low carbon technology and is a crucial part of our energy mix, along with new sources of power such as shale gas," Osborne reportedly said.
On Monday, Osborne also spoke about China's recent stock market turmoil and economic slowdown that many fear will endanger the global economy.
“China is undergoing a very important economic transformation -- a transformation that its government wants to see [and] that its people want to see -- from that investment-led economy of the past to a consumption-led economy of the future. And of course when that happens you are going to find that challenging. It is a big change,” Osborne reportedly said, according to reports.
“But put it in perspective. The Chinese economy is forecast to grow over the next five years in such a way that it will add to the world economy an economy the size of the United Kingdom at least. So the growth in the Chinese economy will be more than the entire British economy at least in the coming five years.”
Osborne is scheduled to visit the Shanghai stock exchange Tuesday, according to reports.
“I am going very deliberately to the Shanghai stock exchange and I’m going to talk there specifically about the financial markets and the events of the summer,” Osborne said Monday. “Of course there have been ups and downs. But in our estimation, the spillover effects -- the impact of that on other financial markets -- has been relatively limited.”