(Bloomberg) -- The U.K.'s former European trade commissioner, Peter Mandelson, said Britain should deepen its economic ties with China after leaving the European Union, calling on Prime Minister Theresa May to approve a deal to build the country's first new nuclear plant in three decades using Chinese investment.
“Out of the EU, we are probably more dependent on China's goodwill because we need to replace trade lost in Europe,” Mandelson said Wednesday in a BBC Radio interview. “We'll want to deepen our economic ties with China post-Brexit. It'll be a major foreign economic-policy priority for the country. I don't think that making any move in the meantime that makes that more difficult, and difficult enough it is going to be, is in Britain's interest.”
Chinese Ambassador Liu Xiaoming wrote in Tuesday's Financial Times that the cancellation of the 18-billion pound ($24 billion) project at Hinkley Point in southwest England could affect commerce with Britain's second-largest trading partner outside Europe. May's administration last month delayed giving the go-ahead for the plant, citing the need to “consider carefully all the component parts” of a deal that's been in the works for years.
The postponement prompted speculation that May might have reservations about Chinese involvement in a project that's being led by Electricite de France SA. China General Nuclear Power Corp. has a minority stake in the plant and has brokered a deal to be increasingly involved in two future U.K. nuclear projects, including the use of Chinese reactors at Bradwell. May's longtime adviser, Nick Timothy, warned last year that involvement by China in nuclear projects might allow it to “shut down Britain's energy production at will.”
Major Investments
The U.K. needs to show the world it is still committed to making major investments even after leaving the EU, Victor Gao, chairman of the China Energy Security Institute, said on BBC radio. “My concern is that if the Hinkley transaction is not handled properly it may send the message to China and other parts of the world that Britain is not a reliable partner for major transactions. I hope Britain will eventually come out of this major hiccup shining as it did before.”
Mandelson said China is a “prized trading partner,” and it wouldn't be in its economic interests to act irresponsibly in its U.K. nuclear investments “because their whole future economic growth depends on them securing and sustaining contracts internationally like this one.”
“It would be commercially globally suicidal for China if they were to invest on the one hand and then try to mess around with other countries' security the next; nobody would trust Chinese investment again: nobody would want to do business with China again,” Mandelson said. “To stretch this out beyond the end of September would be a mistake. We have an enormous amount to play for in the post-Brexit world.”
To contact the reporters on this story: Alex Morales in London at amorales2@bloomberg.net, Rachel Morison in London at rmorison@bloomberg.net. To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Rob Verdonck, Anna Shiryaevskaya
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