A $1.24 billion-valued agreement between a British city and a Chinese manufacturing firm has been canceled after three years of inaction. The broken deal occurs amid chilly diplomatic relations between London and Beijing.
In recent weeks, London officials have expressed support for Hongkongers who have flooded the streets in protest of a controversial extradition bill that they consider an affront to the city’s autonomy—drawing Beijing’s ire.
Hong Kong was handed over from British to Chinese rule in 1997. The Chinese regime had promised it would preserve freedoms in Hong Kong that are not afforded in the mainland.
But the now-suspended bill, which proposed that any country, including mainland China, would be able to seek extradition of an individual to be tried in courts controlled by the Chinese Communist Party, sparked fears that Hong Kong’s rule of law would be infringed upon.
Following mass protests in Hong Kong, British Prime Minister Theresa May, Foreign Secretary Jeremy Hunt, and other UK politicians urged Chinese authorities to respect human rights and freedom in Hong Kong. Beijing responded with tough words.
An Iconic Project
In October 2015, when Chinese leader Xi Jinping visited the UK, then-British Prime Minister David Cameron said that the UK and China would enjoy a “golden age” of economic cooperation.Then, in July 2016, the third-largest district by population and notable industrial city Sheffield signed a 1 billion British pound ($1.24 billion) cooperation agreement with the Chinese firm Sichuan Guodong Construction Group. BBC dubbed it “an iconic project” of Cameron’s “golden age.”
“It is the first deal of its kind to be made by a UK city,” leader of the Sheffield City Council Julie Dore told BBC at the time. “We have the skills and the connections to drive economic growth in our city.”
The city council estimated that hundreds of jobs would be generated, though few details about the projects were made public.
Deal Dead
On July 9, Sheffield’s cabinet member for business and investment, Mazher Iqbal announced at Sheffield Town Hall that the deal was “dead.”It is unknown how much Sichuan Guodong had actually invested in Sheffield.
Sichuan Guodong is not the first Chinese company that failed to fulfill its promise in the UK.
In 2015, Peel decided to cancel the agreement because it had not received the investment from San Wa.