UK-China gas pipeline deal will cost UK £11.2bn, but will have negative impact on UK industry
FourFourThree A deal between China’s PetroChina and the UK’s National Grid to import petro-chemical and cement from a Chinese firm will cost Britain £11bn and the industry is already feeling the pinch, according to a report.
China’s Petro-China has agreed to supply the UK with a 50 per cent share of its cement supply, which will be sold to China’s state-owned cement company CNOOC, after a four-year long search, according the FT.
The UK Government has been reluctant to sign a deal with China’s biggest cement producer, CNOOS cement maker, but last month the UK Government announced that it was considering agreeing to a deal.
“The government is considering a Chinese-UK deal, but that would not be in the interests of British cement producers or our industry,” David Cameron said last month.
However, the deal would be in conflict with a UK government policy to invest in British cement in order to create jobs.
In May, Cameron promised to invest £3bn in British manufacturing in order for it to be the UKs “leading manufacturing hub”, which the PM has been working on since he took office in 2010.
But with the UK already importing nearly a third of its steel, the trade barriers will only increase.
A number of steelmakers in the UK, including Balfour Beatty, have warned that the deal will harm British steel, and are seeking to raise awareness of the threat of climate change by raising awareness about global warming and global trade.
CNOOC has already made the decision to buy British cement.
According to a recent report by the British Chamber of Commerce and Industry, the industry could see an increase in demand for cement by 40 per cent by 2040, as global demand for products such as cement, steel and aluminium increases.
While cement production in China has been a major factor in Britain’s economy, there has been some concern over the impact the Chinese steel industry would have on the UK.
The report by Chatham House said that while the government has invested heavily in building up the UK steel industry, “China has also been increasingly taking advantage of UK steel.”
“This means that if the Chinese cement company decides to buy UK cement from CNOIC, this will have a significant impact on British cement.”
The report added that China is also buying British cement at a time when it is experiencing a severe shortage of raw materials and has begun importing raw materials, including steel.
Last month, China’s Commerce Minister Yang Jiechi said that if Britain does not buy Chinese cement, it could see a drop in its cement production and “could seriously damage the industry.”
China is also looking to increase its share of the cement market in the United States, which it has the world’s second largest market after the UK after the US.
Chinese cement producers will also receive an extra £5bn in investment in the next three years, as part of a new £30bn investment in cement infrastructure.
Under the deal, the British cement company will supply the Chinese firm with 50 per a cent share in the cement and cement products.
PetroChina has been investing in the production of cement and steel in the country for years, but it has been unable to make a significant dent in the global market, due to the price of cement.
Last month the British government said it was reconsidering its decision to sign an agreement with China to import cement from its CNOoc cement producer.
This follows a series of comments from Chinese officials over the last few months, which have highlighted concerns about the impact that the country’s steel industry could have on UK steel production.
After an internal study, a government-appointed panel has suggested that a deal should be struck between China and the British company, but the government is still waiting for the results of the report.