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UK courts Chinese investors for new rail line

September 24, 2015

UK Foreign Minister George Osborne has opened bidding on contracts to build a high-speed rail line connecting London and the north. Osborne is aiming to draw in Asian investors during a trip to China.

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George Osborne China Besuch Industrie Urumqi
Image: picture-alliance/dpa/Stefan Rousseau

The seven new contracts related to the railway are worth 11.8 billion pounds ($18 billion, 16.3 billion euros), Osborne said on Thursday, at the end of his five-day visit to China.

"It's crucial that businesses and communities from across the UK feel the full benefit of forging closer economic links with China," Osborne said, according to a British government statement.

The HS2 high-speed line aims to boost the economy in the Midlands and the north of England by linking the British capital initially with Birmingham and eventually expanding to Manchester and Leeds.

The total value of the project is expected reach 43 billion pounds.

The railway line, however, is still waiting for the final parliamentary approval.

Osborne is also hoping for Chinese backing for the so-called "Northern Powerhouse," a series of investments projects worth 24 billion pounds.

"This government is committed to rebalancing our economy and building a Northern Powerhouse, and improving transport links and launching HS2 is key to supporting long-term economic growth across the North and Midlands," Osborne said.

Also on Thursday, a Chinese-led consortium won a bid for a feasibility study into a 1,200-kilometer (750-mile) high-speed rail link in India between New Delhi and Mumbai. Last week, a Chinese rail consortium announced it would participate in a high-speed rail project linking Las Vegas with Los Angeles.

'Golden era'

The British foreign minister aims to make China the UK's second largest trading partner after the United States.

Earlier in the week, Osborne announced that Chinese central bank will issue yuan-denominated bonds in London. He also said a feasibility study will consider linking the London and Shanghai stock exchanges.

In remarks released by his office, Osborne said Britain and China were entering a "golden era of cooperation."

Some politicians came out in opposition to Osborne's bid to woo Chinese investors, saying that the UK government is closing their eyes to Beijing's human rights record.

Osborne has responded by saying he disagrees with Beijing on rights issues but still wants to engage with China.

Currently in the United States, Chinese President Xi Jinping is scheduled to visit Britain next month.

dj/sms (Reuters, AFP)