§ Mr. Wilson
[holding answer 30 October 2001]: My recent visit to China focused on promoting the UK aerospace and energy industries.
On aerospace, my agenda was to develop good bilateral relations with the Chinese aviation authorities and airlines—particularly in respect of commending the possible purchase of fifty Airbus narrow-body aircraft by China; promoting UK collaboration on developing a domestic Chinese regional jet and encouraging Chinese airlines to firm up outstanding options on the Airbus A340 large aircraft powered by Rolls-Royce engines. (As you will know, Airbus wings are made in the UK, as are Rolls-Royce engines).
As elsewhere, we have found that much of the aerospace business we have secured with China in the past has been dependent upon good, long-standing relations at Government level and with the airline and aerospace manufacturing industry.
China is the world's fastest growing aviation market and looks set to continue to grow rapidly over the next 20 years based on the anticipated expansion of the Chinese domestic economy. This will provide many new opportunities for the UK aerospace industry to benefit from both selling to China and entering into profitable industrial collaboration arrangements with the Chinese aerospace industry.
Current prospects in China remain buoyant, despite the aviation downturn in the West. Airbus has just announced that it is expected to deliver eight A318 aircraft to Air China by 2004 and no Chinese airline customers have postponed Airbus aircraft orders since Sept 11.
The opening up of China's vast western regions also offers enormous opportunities for UK companies to benefit in helping China develop its airport and energy infrastructure. During my visit I also encouraged the Chinese authorities to expand their use of UK companies in the development and upgrading of China's airports, building on the recent success by Ove Arup in winning the contract to design the new terminal building at Chongqing.
On the energy side, China's growing market for gas also offers good opportunities for UK companies. The Chinese Government have decided to develop a pipeline from the western region to the industrialised east. A number of major liquified natural gas (LNG) projects are also under way.
I addressed the Beijing Energy Forum, co-chaired by senior officials of the DTI and their Chinese counterparts. The establishment of the Forum was an important development, especially now that natural gas has been ear-marked as a major source of energy for China.652W
A newly established China-Britain Natural Gas Working Group will also strengthen links and help to identify opportunities in this area. The Working Group will facilitate the sharing of UK experience and help ensure that the development is both safe and environmentally acceptable. There are four key areas of collaboration—policy creation, gas supply, infrastructure and the utilisation of natural gas in China. The promotion of joint ventures to fill identified capability gaps in China will enable more activity between Chinese and UK businesses.
In Shanghai I launched a new brochure prepared by the British Consulate-General in Shanghai which catalogues current local opportunities for UK companies. The rate of growth in this dynamic region is awesome and the brochure outlines a number of major projects in which British companies could become involved. From my discussions with the Government and Shanghai city authorities it is clear that a higher level of British involvement would be welcomed. One of the major opportunities is presented by BP's involvement in the biggest-ever joint venture in China to build a petrochemicals complex at Caojing, on the outskirts of Shanghai. I held discussions with BP during my visit and asked them to encourage as much British involvement as possible in the supply chain.