* China says it hopes Britain can proceed with Hinkley deal
* UK says right to review project, still wants close China
* UK will not comment on reported security concerns
* France's EDF says already spent 2.4 billion pounds on
(Adds context, quotes)
By William James and Ben Blanchard
LONDON/BEIJING, Aug 1 Britain said on Monday
that it wanted closer ties with China but resisted pressure from
Beijing to sign off on a $24 billion nuclear power project that
was delayed at the last minute by Prime Minister Theresa May.
May's decision to review the building of Britain's first
nuclear plant in decades has raised concerns that her government
could take a sterner view of Chinese investment, potentially
souring ties with the world's second largest economy.
Chinese Foreign Ministry spokeswoman Hua Chunying said they
had "noted" the British decision to conduct a review and called
for the project to go ahead.
China "hopes that Britain can reach a decision as soon as
possible, to ensure the project's smooth implementation", she
added, without elaborating.
Under plans drawn up by former prime minister David Cameron,
French utility EDF and Chinese partner China General
Nuclear would fund the 18-billion-pound ($24 billion) cost of
the project, while Britain committed to pay a minimum price for
the power generated by the plant for 35 years.
The Hinkley financing deal was agreed during a state visit
by President Xi Jinping last year designed to cement a "Golden
Era" of relations between the two countries. Britain also sought
Chinese investment in rail and other projects during the visit.
But after winning Britain's top job in the political turmoil
following the June 23 Brexit vote, May's decision to review the
project indicates a much more cautious view of Chinese
investment and a willingness to take a tough line with EU allies
such as French President Francois Hollande.
Hinkley is seen as the frontrunner to closer Chinese nuclear
involvement, paving the way for another project in Britain that
would use Chinese nuclear technology.
May's spokeswoman said nuclear power remained an important
part of Britain's energy supply plans, and it was natural for
the incoming government to want to look at the plans in detail.
"This is a big infrastructure decision and it's right that a
new prime minister and a new government take the time to make
sure that they are fully informed before they take that
decision," she said. "The government will make a decision in
She said that Britain still wanted to attract foreign
investment and valued its ties with China.
"With the role that China has to play on world affairs, on
the global economy, on a whole range of international issues, we
are going to continue to seek a strong relationship with China,"
The Financial Times reported that high-profile Treasury
minister Jim O'Neill, an influential former Goldman Sachs
economist brought into government to promote ties with China,
was baffled by a change in approach and could quit the
May's spokeswoman said O'Neill still had a role to play in
A former colleague of May said on Saturday she had
previously expressed concern about the security implications of
the planned Chinese investment.
Last year, Nick Timothy, now May's joint chief of staff,
said security experts were worried the state-owned Chinese group
would have access to computer systems that could allow it to
shut down Britain's energy production.
Asked whether national security would play a part in the
review of the Hinkley Point nuclear project, the spokeswoman
declined to comment on the review process, other than to say
that it would look at all component parts of the deal.
China's official Xinhua news agency published an
English-language commentary saying China would not tolerate
"unwanted accusations" about its investments in Britain. Xinhua
said people might think Britain was trying to erect a wall of
This "will surely stain its credibility as an open economy
and might deter possible investors from China and other parts of
the world in the future", read the commentary, which is not a
government statement but offers a reflection of official
Asked about the commentary, May's spokeswoman said the
government could take time to reach its final verdict.
"The prime minister's focus is about making sure that we
take the right decision; recognising that we need a reliable and
secure energy supply, recognising that nuclear energy is an
important part of that and recognising that we can take some
time to make that decision," she said.
She said she was not aware of any direct communication
between May and China over the review.
EDF said it had already spent 2.4 billion pounds on Hinkley
Point so far but declined to comment on whether there are any
contract clauses specifying possible damages in case of
withdrawal of the British side.
The cost of the Hinkley project has already come under
scrutiny, with British lawmakers warning that the energy price
guaranteed by the government is too high, and union officials
saying the up-front costs could jeopardise EDF's future.
The EDF board voted narrowly to proceed with the project
A spokeswoman for Britain's Department for Business, Energy
& Industrial Strategy said on Monday the government is not
responsible for any costs until a contract is signed.
French Economy Minister Emmanuel Macron told French weekly
Le Journal du Dimanche on Sunday that he did not believe Britain
would reverse its position.
(Additional reporting by Susanna Twidale and Nina Chestney in
London and Geert De Clecq in Paris; editing by Guy Faulconbridge
and Anna Willard)