UK and China to sign commercial contracts

<p>The UK and China have continued to invest in one another with the latest commercial deals just announced.</p>

The UK government has announced that it is set to sign commercial contracts with China that are worth more than £2.4 billion, as it seeks to forge greater trade ties with the economic giant.

Chancellor George Osborne, who is meeting China's vice-premier Ma Kai in London today (September 12th) said that these deals will prove to be a significant asset to both countries.

Full details have yet to be revealed but it includes a £1 billion joint venture that is related to Malaysian oil terminal and a £200 million scheme that will see China benefit from new vocational training schools and nursing homes.

The partnership with China has been high on the agenda for the coalition government because exports to traditional markets – mainly in Europe – have not dramatically improved since the financial crisis.

In 2013, China became the UK's seventh-biggest export market, valued at £12.4 billion.

"We promote UK interests through a strong, effective relationship with China," the British government has said of its efforts with China.

"We work to promote international security, increase mutual prosperity, and support China’s process of modernisation and reform. We also aim to provide high quality consular services for British nationals in China."

In related news, premier Li Keqiang recently said at the World Economic Forum that it is committed to reforming its economy to boost growth.

Things started off well during the first half of the year, with its economy growing by 7.4 per cent, which was just short of the 7.5 per cent target.

However, by the end of July, this momentum weakened, as retail sales, investment and industrial output slowed down.

"As a big country, China has to play a more important role in the global economy," commented the Beijing Youth Daily. "Contributing to global economic growth is not enough, it has to maintain an advantage position in technology innovation, which is China's weakest link."

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.