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Hinkley, China and the Northern Powerhouse – what next?

The ongoing delays at Hinkley Point C might not seem like an immediately obvious topic to discuss with construction professionals in the north of England.

After all, the core Northern Powerhouse cities and Hinkley Point C are hundreds of miles apart, and much of the dialogue around the North’s development has been on transport and connectivity, rather than electricity generation and supply.

But that doesn’t mean that the delays do not have far-reaching consequences across the country, and indeed across government policy.

Chinese relations

Although Theresa May’s government has undertaken a subtle rebranding of the Northern Powerhouse as a wider ‘industrial strategy’, it hasn’t dampened enthusiasm for investing in the North, but one part of the Hinkley delay has raised concerns.

“Chinese firms and investors are taking a long-term view on investment [in the North]”

The Northern Powerhouse was former chancellor George Osborne’s pet project – and with it he brought a strong relationship with the Chinese government and Chinese investors.

However the new prime minister seems to have taken a slightly cooler stance on Chinese investment, while chancellor Phillip Hammond is something of an unknown quantity when it comes to Sino-British relations.

That said, his former role as foreign secretary means that he is well placed to continue on George Osborne’s relationship with China.

Nevertheless, one concern raised so far is that, in the North, a sizeable amount of foreign investment has been from China – not just Airport City, but also at the £700m Middlewood Locks housing scheme, where Beijing Construction and Engineering Group and its JV partners have already started work.

Foreign investment

So if Hinkley is delayed yet further, and the Chinese investors behind that are put off, would that not mean that further foreign investment is put at risk?

Not necessarily.

One leading subcontractor told me that they are not worried about Chinese investors pulling out of the North, and pointed out that investors have been in Manchester and Liverpool in particular for a number of years.

“Chinese firms have already started to build relationships with the local supply chain”

They also highlighted the strong relationships that Chinese firms have already started to build with the local supply chain.

On top of that, Chinese firms and investors are taking a much more long-term view on investment, meaning that even if there are further delays to Hinkley, investment in the North is unlikely to be impacted.

As industry professionals have told me, the Chinese are in it for the long term and they see the UK as a great place to invest – inside or outside of the EU.

And as for Hinkley, contractors are still bullish on its prospects, with M&E specialist NG Bailey’s CEO David Hurcomb telling Construction News that an extra two months’ delay to the project “won’t make a difference”.

Dare I say it – despite everything that’s happened, it could still be business as usual for the Northern Powerhouse.

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