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Last Updated: Tuesday, 8 November 2005, 14:29 GMT
At-a-glance: UK-China economic links
Tony Blair and Hu Jintao
Mr Blair was in Beijing in September to sign off on several trade deals
The British prime minister, Tony Blair, says his talks with the Chinese president, Hu Jintao, will focus on economic and business links between the UK and China.

But how close is the economic relationship between the two countries?

Here is a brief guide:

TRADE

Trade between the UK and China is rising fast. It was worth $19.7bn (11.4bn) in 2004, according to official Chinese sources. This was an increase of 37% on the previous year.

In the first half of this year, the total value of two-way trade between the two countries rose by another 30% compared to the same six months of 2004.

This makes Britain China's fourth largest trading partner after Japan, the US and Germany.

Unlike Germany, which is a big exporter of goods to China, UK imports from China are much greater than sales in the other direction.

The UK imports from China approximately five times as much as it exports.

The biggest categories of imports include textiles and consumer electronics.

China has agreed to limit its exports of textiles and clothing to the EU until 2007, following a surge this year after the Multi-Fibre Agreement which set strict quotas on textiles was ended.

During the tough negotiations, the UK was presumed to belong to the "northern" pro-free-trade group, but had to keep quiet because of its obligation, as EU president, to play the role of "honest broker".

Several EU countries, such as Greece, Italy, Portugal and Spain, took a more protectionist stance, in an attempt to preserve local textile industries.

INVESTMENT IN CHINA

China's accession to the World Trade Organisation in 2003 triggered a welter of investment by Western companies.

British companies have been investing more in China than firms from any other EU country.

British direct investment in China by companies stands at about $13bn.

Several of the largest deals have involved the British-based banks, HSBC and Royal Bank of Scotland, taking stakes in China's leading banks.

Economists say that as China's economy matures, there is likely to be less demand for manufactured goods and greater demand for the kind of financial and consultancy services which UK companies would be well-placed to provide.

In other moves, oil firms BP and Shell have both set up joint ventures to open chains of petrol stations across China.

And British retailers like B&Q and Homebase are attempting to tap into the growing Chinese home ownership market.

INVESTMENT IN THE UK

There has also been an increase in the past year in high profile overseas purchases by Chinese companies.

Much of the interest has focused on the US, but Chinese firms have also dipped their toes into the UK, with the car maker, Nanjing Automobile, buying MG Rover in July.

Nanjing has said it will re-start Rover car production in the UK but it is also re-locating some manufacturing to China with British help.

Chinese attempts to buy a US oil company sparked protests in the US Congress and eventually led to the withdrawal of the offer.

OTHER ISSUES

Analysts say the talks between the British and Chinese leaders will also touch on attempts to increase co-operation on tackling global warming.

China, like the US, rejects the targets-based approach of the Kyoto protocol, but it is expected to become the second largest producer of greenhouse gases as its economy expands.

Britain is helping it develop cleaner technology for burning fossil fuels.

Mr Hu is also expected to raise the issue of the EU embargo on arms sales to China, which has been in place since pro-democracy protests in Tiananmen Square were put down in 1989.

But analysts say Mr Blair is unlikely to signal a shift in the EU position.




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