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UK steelmakers urge PM to confront visiting Chinese president over 'unfair' dumping UK steelmakers urge PM to confront visiting Chinese president over 'unfair' dumping
(about 7 hours later)
Britain’s struggling steel producers have appealed to David Cameron to stand up for the industry in the face of fierce competition from China, as the UK prepares to welcome the country’s president, Xi Jinping, for a lavish four-day state visit. David Cameron was accused of putting economic engagement with China ahead of the long term interests of the UK, as the president of the world’s most populous country arrived in London for a lavish four-day state visit.
The prime minister and George Osborne, the chancellor, are hoping Xi will bring with him the promise of investing in UK infrastructure, including nuclear power stations and HS2 construction. Downing Street said the visit from Xi Jinping would “unlock” £30bn of trade deals that would lead to 3,900 new British jobs - but critics said that the prime minister was ignoring China’s impact on UK steel , its poor record on human rights and any risks of allowing it to invest in nuclear power.
However, the visit comes at at time when China is accused of anti-competitive dumping of below-cost steel on the market, which UK firms blame for jeopardising the future of the industry. The economic centrepiece of Xi’s visit is likely to be a multi-billion pound Chinese investment in Britain’s new generation of nuclear power stations and there will also be trade in the creative industries, retail, health and technology, financial services, aerospace and education.
As a third UK steel plant revealed it was in trouble on Monday, the prime minister is under mounting pressure to take China to task over allegations it is destroying parts of the world’s steel industry by unnecessarily pumping out cheap product. But the president’s trip, which began with an overnight stay in London’s Mandarin Oriental hotel will, include a royal procession, an address to parliament and banquet with the Queen.
Pressed by Jeremy Corbyn, the Labour leader, to get the Chinese president to address the issue, Cameron said he would discuss the industry as no issue was off the table in talks with Xi.
But China’s ambassador, Liu Xiaoming, told ITV News it was the UK’s fault for having an old and unprofitable steel industry. “If you continue to stay with your old, traditional business, you’re losing money and opportunities … China is making adjustments – why not Britain?” he said. Labour and trade unions called on Cameron to confront Xi about allegations China is responsible for anti-competitive behaviour, as a third British steel maker, Caparo, admitted it was in trouble.
Steelmakers claim China is unfairly flooding the market as its growth slows and its currency is devalued. However, the new jobs announced in the deals are less than the more than 5,000 that are expected to be lost in the current UK steel industry crisis, which has been blamed on Beijing flooding the market with cheap produce.
Pressed by Jeremy Corbyn, the Labour leader, to get the Chinese president to address the steel issue, Cameron said he would discuss the problem.
However, China’s ambassador, Liu Xiaoming, told ITV News it was the UK’s fault for having an old and unprofitable steel industry. “If you continue to stay with your old, traditional business, you’re losing money and opportunities … China is making adjustments – why not Britain?” he said.
Related: Nothing off the table in talks with Chinese president, says No 10Related: Nothing off the table in talks with Chinese president, says No 10
Gareth Stace, director of the industry body UK Steel, said: “If the worst is confirmed, with further job losses in the steel industry, I would hope the prime minister would use the opportunity of this week’s visit to raise the issue of Chinese dumping of steel. As well as reinforcing the need for the EU to tackle unfair dumping of steel across Europe, Cameron’s intervention would send a powerful signal to Beijing that he is prepared to stand up for British steelmakers.” Gareth Stace, director of the industry body UK Steel, urged the prime minister to “send a powerful signal to Beijing that he is prepared to stand up for British steelmakers”, while Frances O’Grady, general secretary of the TUC, warned that one in six UK jobs in the industry could go without more intervention from Cameron.
Some Conservative MPs, including Kevin Foster of Torbay, have also criticised the dumping of Chinese steel products and pressed the government to look at using anti-dumping measures. Labour MPs also questioned why Osborne had advertised £11.8bn of contracts in China for the construction of HS2 high-speed during a trade trip last month, while steelmakers are being allowed to fail at home. The HS2 contracts advertised to the Chinese are for construction of chunks of tunnel, bridges and track beds, some of which will require the procurement of steel at a later date.
Labour MPs also questioned why Osborne was advertising £11.8bn of contracts in China for the construction of HS2 high-speed, while allowing steelmakers to fail at home. Cameron stressed in parliament that every effort would be made to ensure UK infrastructure projects are supplied with UK steel and accused the opposition of “playing politics” over a serious issue.
“It would appear that the government is perfectly content for the Chinese government to have a bigger strategic stake in British infrastructure than the British government itself,” said Kevin Brennan, a shadow business minister. Kevin Brennan, a shadow business minister, questioned Cameron’s eagerness to do deals with the Chinese that are likely to “give Beijing a bigger strategic stake in British infrastructure than the British government itself”.
“Yes, we must trade with China, but Osborne’s policy seems to be that Britain should have an utterly laissez-faire economic policy as far as steelmaking is concerned and should rely on the Chinese government to take a stake in the British economy. What does that mean for Britain’s economic independence? At the moment, they seem to be leaning over, and dare I say kowtowing, to China on almost every single issue.” “Yes, we must trade with China, but [the] policy seems to be that Britain should have an utterly laissez-faire economic policy as far as steelmaking is concerned and should rely on the Chinese government to take a stake in the British economy. What does that mean for Britain’s economic independence? ” he said.
The HS2 contracts advertised to the Chinese are for construction of chunks of tunnel and track beds, some of which will require the procurement of steel at a later date. The prime minister is attempting a remarkable turnaround in UK-China relations by giving Xi an especially ostentatious welcome, just three years after Beijing froze relations over his meeting with the Dalai Lama.
Cameron has already been condemned by activists for stressing trade opportunities with China without highlighting human rights abuses. However, Cameron’s approach has frustrated campaigners and Labour leader Jeremy Corbyn who want him to censure China over its detention of hundreds of human rights activists and lawyers during Xi’s visit.
He has also faced criticism from British security sources and some foreign governments over Britain becoming too close to China in a naked bid to win commercial contracts. Amnesty International are among the campaign groups planning to demonstrate against China’s record during the visit, with its UK head of policy Allan Hogarth saying Cameron should ignore “ China’s threats that trade deals will only be won in return for staying quiet over human rights”. Corbyn has pledged to raise China’s human rights record during a private meeting ahead of the state banquet.
However, the government is hailing a new golden era in Anglo-Chinese relations, and is clearly trying to push itself ahead of its European partners with the Chinese government after relations hit the deep freeze over Cameron’s apparent support for the independence of Tibet. On top of that, Cameron has faced criticism from British security sources and some foreign governments over Britain becoming too close to China in a naked bid to win commercial contracts. On Monday, Maria Eagle, the shadow defence secretary, accused the government of putting national security at risk by allowing China to invest in Britain’s nuclear power plants.
Cameron is due to hold two major sessions of talks with the Chinese leader, first at Downing Street alongside senior cabinet ministers, followed by a press conference. The home secretary, Theresa May; the foreign secretary, Philip Hammond; the development secretary, Justine Greening; the energy secretary, Amber Rudd; and the chancellor, George Osborne, are all due to attend the talks in the cabinet rooms on Wednesday. Downing Street’s approach is in marked contrast to that of the White House. Xi’s state visit to the US in September was marked by tensions over security, and a threat by Barack Obama to pursue sanctions against Chinese entities carrying out a series of cyberattacks.
The talks are likely to lead to a series of contracts being signed, including help with the nuclear power station at Hinkley Point in Somerset. Liu at the weekend said the expected deal to build the new nuclear power plant was “in the best interests of Britain and also in the interest of partnership between China and UK”. The visit is also riddled with potential diplomatic pitfalls, including the issue of whether Cameron should wear a poppy on Thursday in the runup to Remembrance Day next month.
“UK people want to have a better life, want to have clean energy,” he said. The Chinese regard the red poppy as unacceptable since it has links to the Chinese opium wars. In 2010, Cameron’s delegation to China was asked not to wear poppies because they were a symbol of China’s humiliation at the hands of Europe in the wars that took place in the middle of the 19th century. The British delegation refused to remove the poppies.
Related: Risk of further job losses in British steel industryRelated: Risk of further job losses in British steel industry
However, Xi himself has given a rare interview over the weekend signalling that China is very appreciative of the UK’s efforts to position itself as China’s best friend in the west.
The president landed in the UK at Heathrow on Monday evening, where he was greeted on behalf of the Queen by the Viscount Hood, Lord-in-Waiting, followed by foreign secretary Philip Hammond.
The official visit gets going on Tuesday morning, when Xi will met by the Prince of Wales at his hotel and then honoured by a royal procession down Horse Guards Parade to Buckingham Palace for a private lunch with the Queen. He will address MPs in the royal gallery of the Palace of Westminster in the afternoon, before he is hosted for a state banquet back at the palace.
On Wednesday, Cameron is due to hold a major session of talks with the Chinese leader at Downing Street alongside senior cabinet ministers, followed by a press conference.
The home secretary, Theresa May; the foreign secretary, Philip Hammond; the development secretary, Justine Greening; the energy secretary, Amber Rudd; and the chancellor, George Osborne, are all due to attend the discussions in the cabinet rooms.
It is unlikely Xi will attend the Wednesday press conference, but Downing Street declined to confirm that the Chinese president would refuse to take questions from the British press throughout his visit.It is unlikely Xi will attend the Wednesday press conference, but Downing Street declined to confirm that the Chinese president would refuse to take questions from the British press throughout his visit.
On Thursday, Cameron will shift the government focus towards a broader foreign policy agenda, with a further round of talks scheduled to take place over dinner at Chequers. On Thursday, Cameron will shift the government focus towards a broader foreign policy agenda, with a further round of talks scheduled to take place over dinner at Chequers. The final leg of Xi’s visit will involve a day in Manchester on Friday as part of Osborne’s push to create a so-called Northern Powerhouse.
The visit is riddled with potential diplomatic pitfalls, including Tibet, cyber-security, human rights, the security of British infrastructure and even whether Cameron should wear a poppy on Thursday in the runup to Remembrance Day next month.
The Chinese regard the red poppy as unacceptable since it has links to the Chinese opium wars. In 2010, Cameron’s delegation to China was asked not to wear poppies because they were a symbol of China’s humiliation at the hands of Europe in the wars that took place in the middle of the 19th century. The British delegation refused to remove the poppies.
The prime minister’s spokesman said Cameron had set out his position defending Chinese sovereignty over Tibet and would not change that stance on this visit.
Before the visit, Downing Street announced that Cameron has appointed Jack Ma, China’s wealthiest businessman, to join the UK government’s business advisory board to give advice to British exporters on how to strike commercial deals with the Chinese.
Ma, a Chinese national, has made billions from his giant online commerce site, Alibaba.