China is due to co-fund a new nuclear powers station at Hinkley Point in southwest England, which is being built by French energy giant EDF. However, despite China backing the project and EDF giving the final investment decision the go ahead, British Prime Minister Theresa May surprised both France and China by deferring a decision over the plant.
It is rumored May was spooked by the idea of China having such close access to Britain's national infrastructure, amid fear of nuclear secrets being accessed by Beijing and second thoughts over allowing China to build another plant at Bradwell in the east of England.
The decision came less than a year after — then — Chancellor George Osborne told a meeting at the Shanghai Stock Exchange: "Let's stick together to make Britain China's best partner in the West. Let's stick together and create a golden decade for both of our countries. Britain and China: we'll stick together."
The decision rattled Beijing, whose state news agency Xinhua wrote:
"Apparently, London's so-called 'national security' concerns over Chinese investment into the Hinkley Point C nuclear power plant could well endanger the bright new prospects the two nations' leadership have agreed to foster during Chinese President Xi Jinping' s visit to Britain last October."
'Golden Era'G20 summit in the east China city of Hangzhou — will be critical for Sino-British relations. Osborne's "golden era" idea was aimed at attracting huge amounts of Chinese investment in UK projects — particularly infrastructure.
In the event of May not giving the nuclear deal the go-ahead, it would be seen as a snub to China, putting at risk future investments in the UK. However, some analysts have pointed out that China is a long-term UK investor, putting more finance into the UK that any other European Union country, so any snub would be short-lived.
EDF Energy in the UK has been planning to build a new nuclear station at Hinkley Point for several years, but the project has been bedeviled by financial uncertainty and technical issues.
Despite the British Government agreeing a "strike price" with EDF Energy in the UK, which guarantees EDF a price of US$141 MWh for generating electricity over 35 years and a debt guarantee, EDF could not go ahead with the project alone. Thus, China was brought in to shore-up the financing of the plant.