Theresa May Tells China She Wants Stronger Trade Ties, Amid Hinkley Dispute
Comment of the Day

August 16 2016

Commentary by David Fuller

Theresa May Tells China She Wants Stronger Trade Ties, Amid Hinkley Dispute

Theresa May has written to Chinese President Xi Jinping insisting she wants stronger trade and cooperation between the UK and China, amid a row over her decision to delay the Hinkley Point nuclear deal.

The UK "looks forward to strengthening cooperation with China on trade and business and on global issues", Mrs May said in the letter, according to a statement from the Chinese foreign ministry.

Tensions between the two countries have risen since Mrs May's surprise decision last month to delay approval of the £18bn nuclear plant amid security concerns over the involvement of Chinese state nuclear companies, which are due to fund one-third of the project.

China's ambassador Liu Xiaoming responded last week by warning that Sino-British relations were at a "crucial historical juncture", urging the UK to "keep its door open to China" and give the go-ahead to Hinkley as soon as possible. 

The new intervention by the Prime Minister, who has been tight-lipped over her decision to review Hinkley, was disclosed by Alok Sharma, the Asia minister, during a meeting with Chinese foreign minister Wang Yi in Beijing.

Ahead of the meeting, Mr Sharma also issued a statement insisting that Britain was "open for business and an attractive destination for international investors, including from China".

"The UK’s relationship with China relationship is strong, growing and delivering benefits for both our countries," he said. 

Chinese investment in Hinkley Point was warmly welcomed by former Prime Minister David Cameron and former Chancellor George Osborne, who hailed the start of a "golden era" of relations between the countries.

Beijing has made clear it sees Mrs May's reticence over Hinkley as calling this new era into question. 

David Fuller's view

Here is a PDF of The Telegraph article.

Theresa May was right to put the proposed Hinkley Point nuclear power project on indefinite hold, prior to a diplomatic cancellation. 

It never made economic sense because the estimated building cost from EDF (Électricité de France) starts at £18 billion for this untested reactor technology, which is already significantly over-cost where it is being built in Finland and also France.

Worse still, the price to be paid for this energy over no less than 35 years is £92.50, in 2912 money, for each MWh unit of electricity.  This would be the most expensive nuclear power ever, at a time when energy costs from both solar and wind are already lower, as is natural gas.  Additionally, before the initial estimated completion date for Hinkley Point in 2025, considerably less expensive molten salt nuclear reactors are likely to be in in commercial production from South Korea to the USA.   

The new reality in our increasingly high-tech world is that energy costs have peaked and are now falling surprisingly rapidly as we have only just begun to see over the last two years.  Countries with smart energy policies will be much more productive in future decades than those saddled with Hinkley Point white elephants.   

See also: Crown estate wades into Hinkley Point row, from The Week and covering nuclear espionage in a series of related articles.

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