Britain 'would welcome' China investment in infrastructure
(LONDON) - Britain said on Monday it would welcome investment by China's $400 billion sovereign wealth fund in infrastructure projects, saying it would represent a "very significant boost" to the ailing economy.
Ministers are expected to detail a GBP 30 billion ($46.7 billion, 34.9 billion euros) programme of investment in roads, railways and high-speed broadband on Tuesday as part of a package of measures to try to boost stalled growth.
Chief Secretary to the Treasury Danny Alexander said on Monday that GBP 20 billion of this would come from private investment from pension funds.
He welcomed the prospect of foreign investment as well, after the head of China Investment Corporation (CIC) said that Beijing saw an opportunity to invest in US and European infrastucture projects.
"Sovereign wealth funds like the Chinese are potentially an important source of new private investment in our country's infrastructure," Alexander told Sky News television.
"We are a very open economy, we benefit from having strong trading links with countries around the world and strong investment links too.
"And just like British firms invest in infrastructure overseas, we're keen to encourage overseas organisations to invest in infrastruture in this country.
"If the Chinese sovereign wealth fund is going to join that then that is potentially a very significant boost to the British economy," Alexander added.
In an opinion piece in the Financial Times on Monday, CIC chairman Lou Jiwei wrote: "Now infrastructure in Europe and the US badly needs more investment.
"Traditionally, Chinese involvement in overseas infrastructure projects has just been as contractors. Now Chinese investors also see a need to invest in, develop and operate projects."
The infrastructure programme is expected to be at the centre of Finance Minister George Osborne's keynote economic statement on Tuesday, where he will acknowledge that the British economy has slowed.
Official figures in March estimating growth of 1.7 percent in 2011 are expected to be downgraded to around one percent.