O'Neill baffled by Hinkley Point delay as China questions UK's post-Brexit openess

Treasury minister Jim O’Neill threatened to quit over Theresa May’s handling of China’s involvement in the Hinkley Point nuclear power plant project, as China’s news agency questioned whether Britain was truly open for business post-Brexit.

According to the Financial Times, Lord O'Neill, the former Goldman Sachs chief economist, told friends that unless May can explain why she wants him to stay, he will leave the government in September.

Lord O’Neill was brought to the Treasury by former Chancellor George Osborne to build economic relations with China and was confounded by the decision to postpone plans to go ahead with the Hinkley Point C reactor, as the government post-Brexit was keen for foreign investment and trade ties with China.

The decision, thought to come from the top of government, came hours after France’s state owned utility provider EDF narrowly agreed to go ahead with building Hinkley Point C.

May said she had security concerns over China’s investment in the project. Chinese companies CGN and CNNC agreed to invest £6bn in the £18bn nuclear reactor.

Last year, Lord O’Neill told the Financial Times in Beijing that Britain had to “get over one of its perpetual problems of being a fair-weather friend”.

China also has ambitions to build another nuclear power plant in Bradwell, Essex and Hinkley Point was seen as an important precursor to this.

Meanwhile Xinhua, China’s official news agency, said on Monday that China would not tolerate “unwanted accusations” regarding investment in Britain and since Brexit, the UK could not afford to drive-away foreign investment.

In an English-language commentary, the news agency said it understood that Britain's new government needed time to think but objected to security concerns.

“For starters, for a kingdom striving to pull itself out of the Brexit aftermath, openness is the key way out. As the initiator of the ‘free trade’ theory and full implementor of free market economy, Britain has long been known for its extraordinary attractiveness to foreign investment with its openness.

“The ‘suspicious approach’ towards Chinese investment pervading in the postponement actually triggers much concern that Britain might be thinking of erecting a wall of protectionism, which 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.”

The commentary, although not an official statement, does give insight into Chinese government, and said security suspicions could add uncertainties to the golden era of China-UK ties.

"China can wait for a rational British government to make responsible decisions, but can not tolerate any unwanted accusation against its sincere and benign willingness for win-win cooperation. After all, the hard-won momentum in China-UK relations cannot be wasted, and the golden era cannot afford to be delayed.

David Cameron's government encouraged ties with China and last year hosted president Xi Jinping on a state visit. The UK also participated in the Asian infrastructure bank, proposed by China.