Theresa May Writes Trade Letter To China Amid Hinkley Deal Row

Theresa May has written to the Chinese President signalling she wants to strengthen the UK's trading relationship with China amid the unease over the £18bn Hinkley nuclear deal.

The letter was hand delivered by trade minister Alok Sharma in a visit to Beijing and will be seen as an attempt to appease China's anger over the delay with the Hinkley project.

Last month Mrs May unexpectedly delayed the deal which would see French firm EDF (Paris: FR0010242511 - news) build two nuclear reactors, part-financed by China General Nuclear Power.

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There had been concerns from intelligence agencies that Chinese investment in nuclear projects could be a danger to national security.

It (Other OTC: ITGL - news) sparked suggestions Mrs May was backing away from the policy of courting Chinese investment in the UK that had been aggressively followed by George Osborne and David Cameron.

In response, China warned the UK against a "suspicious approach" and last week ratcheted up the pressure on the Government saying the relationship with the UK was at a "crucial historical juncture" urging a swift decision on Hinkley.

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The Chinese ambassador made it clear that future investment in infrastructure projects could be under threat if the nuclear deal did not proceed, triggering fears for the Northern Powerhouse scheme.

However, in her letter to Xi Jinping and Premier Li Keqiang, Mrs May said Britain "looks forward to strengthening cooperation with China on trade and business and on global issues".

She (Munich: SOQ.MU - news) added she looked forward to attending the G20 meeting next month in China.

Speaking after his meeting with Mr Sharma, Chinese foreign minister Wang Yi said he believed Britain would continue to have an open policy towards China.

Mr Sharma tweeted he had a "great" first meeting with Mr Wang.

Mr Xi came to the UK on a three-day state visit in October where he heralded a "golden era" for the relationship between the two countries.

During his visit £40bn of investment deals were signed.