Philip Hammond: UK is cosying up to China with eyes wide open
'Eyes open': Chinese President Xi Jinping (right) talks with Foreign Secretary Philip Hammond Toby Melville/PA Wire
Britain is cosying up to China with its “eyes wide open”, Foreign Secretary Philip Hammond said today as London began days of pomp and protests for the state visit of President Xi Jinping.
Undercover police were mingling with crowds in St James’s Park ahead of a procession along The Mall to Buckingham Palace, which marked the official start of the four-day visit.
A row erupted even before the pageantry got under way. Mr Hammond rejected demands to erect trade barriers to cheap Chinese steel, which unions say is threatening to put up to 15,000 people out of work.
“We cannot simply build a wall around the UK,” ruled the minister, who rejected claims that China is “dumping” surplus steel onto the UK market at unfair prices.
“If we had steel prices in the UK that were far out of line with the steel prices in other countries, our downstream industries would not be able to be competitive with the products they produce,” he insisted.
He said higher steel prices would hit exports to China bycompanies such as Jaguar Land Rover. “I don’t think we are naive,” Mr Hammond told BBC radio. “It’s very much in our national interest to engage with China but we do so with our eyes wide open.”
Minutes before the procession began, Tata Steel confirmed it was axing 1,200 jobs. About 900 posts will go from the firm’s plant in Scunthorpe, 270 in Scotland and a number in other sites. The firm blamed a “flood” of cheap imports, particularly from China, a strong pound and high electricity prices.
Downing Street, which has hailed the visit as part of a “golden era” in Anglo-Chinese relations, said deals worth ￡30 billion were ready to be signed during business meetings tomorrow.
Among the smaller agreements, a Wimbledon school will help set up three British-style schools in China. Kings College School Wimbledon will partner Shanghai-based education provider Dipont to set up in Wuxi New Town, Hangzhou and a third location.
In one of the bigger deals being signed, China’s investment wing is expected to pump ￡3.2 billion into the Paramount Pictures theme park planned for Ebbsfleet, Kent.
The Queen will honour Mr Xi with a state banquet tonight. The president will also address both Houses of Parliament and meet Labour leader Jeremy Corbyn.
But an expert warned against Britain appearing like a “panting puppy” before Beijing. James McGregor, chairman of consultancy group APCO Worldwide’s Chinese operations, told the BBC: “Well, if you act like a panting puppy, the object of your attention is going to think they have got you on a leash. China does not respect people that suck up to him. I think England is going to rue the day they did this.”
Steel workers and union leaders were furious with Mr Hammond’s refusal to intervene against imports.
John Park, assistant general secretary of union Community, said: “These comments from Philip Hammond will bring little comfort to the thousands of families suffering as a result of the UK’s struggling steel sector.
“The dumping of cheap, Chinese steel is a reality that is crippling the industry and threatens the very future of steelworks across the whole country.
“Government ministers cannot simply dismiss the issue or ‘raise’ it with the Chinese. David Cameron needs to tell the Chinese [president] what action he’s going to take to stop Chinese steel damaging the future of a vital foundation industry in the UK.”
Tight security will surround Mr Xi’s visit, with hundreds of police deployed on the streets and armed officers on stand-by.