UK’s Osborne woos China with shared investment

Leslie Shaffer | Writer for CNBC.com
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The U.K. and China are well-set to give each other an economic leg up, Britain's Chancellor of the Exchequer George Osborne indicated as he opened a trade mission to the mainland.

"One of my principal goals this week is not just to increase British investment in China, but to increase Chinese investment in Britain," Osborne said in a speech at Peking University, as he touted not just the attractiveness of British products such as Rolls Royce airplane engines and Burberry luxury items, but also highlighted recent Chinese investments in his country.

(Read more: China charm offensive may not bring back UK investment)

On Sunday, Osborne announced a British-Chinese joint venture to develop Manchester's GBP800 million 'Airport City' development as part of an Enterprise Zone in the city, which he said he expected to create 16,000 jobs. In addition, Osborne Monday announced a partnership between Peking University and Manchester University to create a joint center for Genomic Medicine.

Osborne also announced measures to speed up visa applications for Chinese visitors seeking to travel to the U.K. It will offer a 24-hour "super priority" visa service for Chinese business leaders as well as a program to allow Chinese nationals visiting the euro zone to avoid submitting separate U.K. visa applications.

"British companies doing business with China, as well as those who count on Chinese tourism in the U.K., will breathe a collective sigh of relief at these measures," Adam Marshall, director of policy at the British Chambers of Commerce said in an email. "For too long, Britain has courted Chinese investment and tourism without facilitating the entry of Chinese visitors with the same vigor."

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But beyond an oblique call that "we should not be afraid of pointing out where we disagree," references to political differences or concerns over China's human rights record were absent from Osborne's speech.

"World leaders in general, after the economic climate we've had over the last couple years, are backing off the human rights issues and are instead looking at what you can do to draw investment from China," said Ben Cavender, associate principal at China Market Research Group.

George Osborne: More China investment needed
George Osborne: More China investment needed

"Overall, it's been put on a back burner. China has shown they're committed to economic development, including in the poorer regions," he said. "Countries are losing the will to press on that too much. They need the economic ties much more than China does at this point."

(Read more: Booming Britain? Not so fast, says Kingfisher CEO)

Highlighting Chinese investments in the U.K. may be driven in part by the government shutdown drama in the U.S., he noted.

"China's government is looking to diversify investment away from the U.S.," he said.

"China may be looking at other countries as good investment targets, Cavender said, noting the U.K. is business friendly and that it may be getting a lot of funds the Chinese might otherwise funnel toward the U.S.

In addition to highlighting the friendly business climate in the U.K., Osborne also highlighted his country's cultural exports, noting that 160 million Chinese are watching Downtown Abbey, about twice as many people as live in the U.K.

—CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1