February 27, 2009 / 3:08 PM / 9 years ago

UPDATE 2-Rolls Royce signs $1.2 bln deal with China's HNA

* Rolls Royce in engine supply deal

* Jaguar Land Rover signs China supply deal (Adds Jaguar Land Rover contract paragraphs 7,8)

LONDON, Feb 27 (Reuters) - Rolls Royce Group (RR.L) signed a $1.2 billion agreement to supply aircraft engines to China’s HNA Group on Friday.

Rolls Royce will supply Trent 700EP engines to power Hong Kong Airlines’ new fleet of 20 Airbus A330s, the British company said in a statement. The deal includes a long-term service agreement.

HNA is a major shareholder in Hong Kong Airlines.

The contract was among $2 billion of deals signed during a visit to Britain by China’s Commerce Minister Chen Deming.

“This high-profile mission, sent so soon after the China-UK business summit, shows how highly the Chinese value their trade with the UK, and demonstrates their commitment,” said British Business Secretary Peter Mandelson who watched the signing.

HNA Group is also the parent company of Hainan Airlines (600221.SS), China’s fourth-largest carrier, which is based in the south of the country.

Another deal signed on Friday was a three-year supply contract between luxury car maker Jaguar Land Rover, a unit of India’s Tata Motors (TAMO.BO), and Chinese firm SCAS, the British government said.

    News reports said the agreement calls for Jaguar Land Rover to supply 13,000 vehicles to China. The deal should bring some relief to Britain’s car industry which has been hard hit by temporary plant closures and job losses due to the recession.

    Britain has strengthened its relations with China in the last few years, seeing scope for greater trade and investment ties with China at a time when Europe and the United States are mired in recession.

    During Chinese Premier Wen Jiabao’s visit to Britain earlier this month, Prime Minister Gordon Brown said Britain aimed to double exports to China in the next 18 months.

    Britain exported goods worth 4.6 billion pounds ($6.53 billion) to China in the first 11 months of 2008, but they were dwarfed by imports of 20.7 billion pounds.

    Before arriving in London, Chen visited Berlin, where German and Chinese firms signed new business contracts worth more than $10 billion. (Reporting by Adrian Croft, editing by Bernard Orr)

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