Chancellor George Osborne opens door to Chinese banks in the UK

Chancellor George Osborne is visiting China. Photo: Stefan Rousseau/PA Wire

Chancellor George Osborne has had formal meetings with the Chinese government today.

Afterwards he made two main announcements.

China and the UK have signed an agreement on nuclear power; clearing the way for China, the fastest growing civil nuclear power, to be involved in installing new nuclear reactors in the UK.

Government officials insisting that security and safety concerns have been addressed and the same high standards of checks and assurances would apply to any foreign country wanting to be involved in sensitive infrastructure deals.

Secondly, Chinese banks will be allowed greater access to Britain. The five largest Chinese banks have long been lobbying to be allowed to open full branches in the UK a status which allows them access to their entire reserves.

The Chancellor and Mayor of London Boris Johnson are both in China. Credit: Stefan Rousseau/PA Wire

For the first time, according to the Treasury, the Chinese government will issue licences for investors in the UK to invest RMB, the Chinese currency, directly into China.

Today we agree the next big step, by laying the ground for London to become a major global centre for the investment of RMB back into China.

– George Osborne, Chancellor

This should make it easier for British firms to do business with China. It also helps make the UK look more 'China friendly' in an age where lots of European countries are competing for foreign investment.

I asked the Chancellor that while he and UK government appear to be rolling out the red carpet for Chinese firms, for UK businesses China can still be a tough environment to operate in, with state run companies enjoying subsidised credit and property costs for example.

Plus a less than transparent regulation and legal system.

He agreed it has it be two way traffic but that making it easier for China, the world's second largest economy, to do deals in Britain can only help generate jobs in the UK and help the economy recover.

More on this story