UK treasury chief seeks Chinese wealth fund

 

The British treasury chief made a pitch on Tuesday for China’s $200 billion (Dh734 billion) state investment fund to invest in Britain as he visited Beijing amid strains over Tibet and China’s trade surplus.

 

“We welcome the creation of the Chinese sovereign wealth fund and its potential for investing in our country,” Chancellor of the Exchequer Alistair Darling said after meeting China’s top finance reform official, Vice Premier Wang Qishan, for talks on financial cooperation.

 

Darling said ahead of his trip that he would express British concern about China’s crackdown in Tibet and appeal for restraint. But he made no mention of the issue as he and Wang appeared briefly before reporters following their meeting.

 

Darling is the highest-ranking British official to visit China since Brown’s office said last week he would skip the opening ceremonies of the Beijing Olympics in August.

 

Brown’s decision came amid demands by activists for foreign leaders to boycott the ceremony in protest over Beijing’s crackdown on protests in Tibet. But the prime minister’s office said the decision was unrelated to those demands and was not a gesture of protest.

 

The meeting was the first in an annual series of high-level dialogues that are meant to promote trade and financial cooperation between Beijing and London. Darling was accompanied by executives of British and European banks and a London private equity firm.

 

Darling and Wang said they agreed to cooperate more closely on financial regulation, environmental technology and other areas, though they gave no details. Wang said coordination on financial regulation would be especially important at a time when markets have been roiled by the US credit crisis.

 

Prime Minister Gordon Brown visited Beijing in January and said Britain welcomed investment by China’s government fund. That was a break with other Western officials who have expressed concern that such funds might have political motives and have suggested they should face restrictions.

 

Brown is trying to promote London as a base for the Chinese fund to make investments in Europe.

 

Beijing created the fund in September in hopes of getting a better return on its $1.5 trillion (Dh5.5 trillion) in foreign reserves. It bought a $5 billion (Dh18 billion) stake in Wall Street bank Morgan Stanley in December and says it expects to invest some $60 billion (Dh221 billion) abroad.

 

Darling said he and Wang agreed on the need to promote free trade and combat what he said was rising protectionist sentiment in some parts of the world, though they gave no details of any possible initiatives.

 

Britain and other European governments face growing pressure to respond to China’s rising trade surplus, which Europe’s companies say is threatening to wipe out thousands of jobs in manufacturing, textiles and other industries. (AP)