China's excellence in the field of infrastructure is universally recognized, and her participation in the (much-needed) modernization of Britain's transport and energy sectors is welcome. But there is a perception in the U.K. that the British steel industry is suffering under competition from imported Chinese steel, as it is well known that economic developments within China have resulted in a degree of overproduction in the steel industry. This, of course, is a positive element in the context of the "Belt and Road" initiative, through which China can supply steel to infrastructural projects in countries lacking in domestic capacity. But, in Britain, the domestic steel industry has been under severe pressure for some time, and the Indian company Tata, which owns much of it, is trying to sell off a number of steel plants, threatening to put large numbers of employees out of work.

Hammond is not, of course, blaming any of this on China. But he is hoping that, in the context of the new revival of bilateral relations, China will understand the British position and do what she can to help. China, after all, is very well acquainted with the social problems which can be caused by de-industrialization and unemployment. He urged China to accelerate its efforts to reduce levels of steel production. This falls in line with the existing Chinese policy; a statement issued on April 9 expressed that plans to shut steel mills over the next five years would cut capacity to an estimated 1.13bn tonnes by 2020. However, even this figure far outstrips current estimates of domestic demand.

Hammond told his Chinese interlocutors that the steel industry, despite competitive pressures related to labour costs, energy prices, and the regulatory environment, remains an item of strategic importance for the U.K. One potential answer to this problem, which Hammond repeatedly raised, might be to invite the interest of Chinese companies into making investments in U.K. steelmaking. It remains to be seen whether this will be successful. Nevertheless, the appetite of the British industry for further Chinese investment remains strong.

It is of course a constant concern in Sino-British relations that China should not regard Britain as a disruptive factor in issues regarding Hong Kong. Hammond visited the HKSAR immediately before arriving in Beijing, the first British foreign secretary to visit the territory for five years. He underlined British commitment to the Sino-British Joint Declaration on Hong Kong and subsequent agreements relating to the 1997 transfer of sovereignty, and explicitly repudiated any suggestion by extreme elements of "Hong Kong independence." The visit was aimed at assuring the Chinese that Britain has no interest in antagonizing China, either politically or economically, and at registering hopes that any obstacles to the smooth roll-out of the bilateral cooperation program can be swiftly removed.

The writer is a columnist with China.org.cn. For more information please visit:

http://www.ccgp-fushun.com/opinion/timcollard.htm

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