Beijing could pull £100bn investment in UK over Hinkley Point issue
China has announced that it may cancel its £100bn investment in the UK should plans for the Hinkley Point nuclear power plant be cancelled. Under review until autumn, Electricite de France has already approved its part of the contract to build the nuclear reactor. Chinese state media, Xinhua, has said that although it appreciates the UK’s caution in approving the $24bn project, it does not understand its ‘suspicious approach’.

China has suggested it could pull its £100billion investment in the UK if Theresa May decides to cancel the Hinkley Point nuclear project.

As the fall-out continues from Downing Street's surprise decision last week to put plans for the £18bn deal under review until the autumn, the Chinese state-run news agency Xinhua wrote a strongly-worded article yesterday setting out its threats to the British economy.

It said the 'new British Government' is jeopardising the 'hard-won mutual trust with China' and said the 'golden era' of co-operation with Britain could be over.

The deal to build Britain's first nuclear plant for decades would be a third owned by the state-backed China General Nuclear Power Corp - the main obstacle as Downing Street is concerned about heavy Chinese involvement in the UK's national infrastructure.

It added that China 'cannot tolerate any unwanted accusation against its sincere and benign willingness for win-win co-operation'.

In further revelations over the troubled deal for Hinkley Point C, it emerged this morning that the head of the French energy giant EDF gave his fellow board members just two days to read 2,500 pages of contracts before they were asked to vote on whether to give the project the green light.

A strongly-worded article by the Chinese state news agency Xinhua warned Theresa May (pictured right during a visit to Poland last week) not to jeopordise the 'hard-won mutual trust with China' that peaked last year when Chinese President Xi Jinping (left) made a famous state visit to the UK

China suggested it could pull its £100billion investment in the UK if Theresa May decides to cancel the Hinkley Point nuclear project

Chancellor Philip Hammond (left) and Business, Energy and Industrial Strategy Secretary Greg Clarke (right) arrive for the first meeting of Theresa May's new Industrial Strategy Cabinet committee today, which could prove crucial for the Hinkley Point nuclear project

The 17 board members of EDF, which is 85 per cent owned by the French government and has been contracted to build the expensive nuclear reactor, voted 10-7 in favour of going ahead with the project last week.

Beijing's thinly-veiled attack on Mrs May's new administration also warned that in the aftermath of the Brexit vote, 'openness is the key way out'.

The words from the agency - which reflects official views in Beijing - piles pressure on the new UK Prime Minister, who is chairing the first meeting of her new cabinet committee on industrial strategy today.

She will attempt to distance herself from George Osborne's economic legacy by pledging to pursue a 'proper industrial strategy'.

Culture Secretary Karen Buck (left) and International Trade Secretary Liam Fox (right) also attended the Industrial Strategy Cabinet committee today

Work and Pensions Secretary Damian Green (left) and Education Secretary Justine Greening (right) were present at the first meeting of the Industrial Strategy Cabinet committee today, which Theresa May wants to use to reboot the British economy following the Brexit vote

But it could be undermined by the resignation of Lord O'Neill, the Treasury minister who has reportedly threatened to quit over Mrs May's anti-China stance.

The alarming commentary from the state-run news agency was further proof of China's frustration at Downing Street's unwillingness to press ahead with the Hinkley Point C project on the north Somerset coast following the EDF board's long-awaited decision last week to approve the deal.

Last night China's foreign ministry urged Britain to press ahead with the deal, with the ministry's spokeswoman Hua Chunying said they had 'noted' the decision of Mrs May to review the project.

She said: 'I would like to stress that this project was agreed upon by China, Britain and France in the spirit of mutual benefit and cooperation, and win-win cooperation, and has always had the strong support of Britain and France.'

China 'hopes that Britain can reach a decision as soon as possible, to ensure the project's smooth implementation', she added, without elaborating.

Co-operation: David Cameron with President Xi Jinping at a pub near Chequers last year

It marked a dramatic shift in tone from the UK government after David Cameron and George Osborne spent years fostering closer relations with Beijing.

Officially the Chinese government said it hoped for a speedy resolution to the Hinkley situation.

But Xinhua reacted more strongly in a commentary that said China would not tolerate 'unwanted accusations' about its investments in the UK.

It said the delay 'not only draws queries from the international community about its openness towards foreign investment, but also adds uncertainties to the 'golden era' of China-UK ties'.

Xinhua went on: 'Giving the green light to a $24billion project can never be an easy decision, and China fully understands and respects the British government's requirement for more time to ponder.

However, what China cannot understand is the 'suspicious approach' that comes from nowhere to Chinese investment in making the postponement.'

Controversial: A computer-generated image of the HInkley Point reactor

The news agency said China could 'wait for a rational British government to make responsible decisions, but cannot tolerate any unwanted accusation against its sincere and benign willingness for win-win co-operation'.

Pressure is mounting on the Prime Minister to approve the Hinkley plans.

As well as anger from China there are fears the French could claim £2.5billion compensation if the project is scrapped.

French energy firm EDF has been contracted to build the plant in a joint venture with China General Nuclear.

Last week EDF approved funding – only to be told the Government would need until September to review the plans further.

But officials at the energy giant told the Financial Times that chief executive Jean-Bernard Levy gave board members just 48 hours to review contracts - all written in English - on the Hinkley Point nuclear project before last week's crucial vote.

Officials close to the board members opposed to the deal said many were pressured into supporting the deal.

One board member - Gerard Magnin - quit just hours before the vote last Thursday in protest at the expense and viability of the project.

President Xi Jinping: In a rare statement Chinese officials yesterday called for the Government to give Hinkley the go-ahead as soon as possible

The £18bn project: A CGI image of Hinkley Point. Pressure is mounting on the Prime Minister to approve the Hinkley plans

The Hinkley project has been mired in controversy. Originally slated to cost £10billion, the Government claims it will now cost £18billion.

But critics say the final bill for building the power station could reach £29billion.

And while it is now planned to be up and running in 2025, this is several years later than originally promised.

There are further worries about the type of reactor because similar ones being built in Finland and France are years overdue and well over budget.

The project is also controversial because it is, in effect, being built by foreign governments. EDF is 85 per cent owned by the French state, while one-third of the cost is being provided by Chinese investors.

Meanwhile it has emerged that the French are expected to demand compensation for the £2.5billion they have already spent on Hinkley if the plans are scrapped.

A source told French newspaper Le Journal du Dimanche: 'They would have to support the extra costs in case the negotiations are prolonged and the funds committed by EDF to prepare the site.'