British finance minister stresses importance of China ties

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British finance minister George Osborne on Wednesday said Sino-British trade ties were "exceptionally important" as he defended his prime minister's call for China to open up its political system.

Britain's Chancellor of the Exchequer Osborne said David Cameron's message to Beijing about ushering in greater freedoms was necessary, but stressed the need to boost commercial relationships between the two countries.

"We should be doing a lot more trade with China," he told a business luncheon in Hong Kong.

"It is very important to have a political dialogue with China... But (we) also have a commercial dialogue with China that is exceptionally important."

In a speech to students at Peking University on Wednesday, Cameron is set to say he hopes China's breakneck economic gains would "go in step together" with increased political freedoms, according to excerpts released by his office.

Osborne is part of a British delegation to China seeking to clinch business deals ahead of a Group of 20 summit in Seoul on Thursday.

His remarks come a day after the announcement of a 1.2-billion-US-dollar agreement between Rolls-Royce and China Eastern Airlines Corp under which the British group will provide jet engines to power 16 Airbus A330 aircraft.

Osborne declined comment on widespread criticism that China artificially undervalues its yuan currency to boost exports.

"If you just reduce it to the level of currencies then you're missing a much broader economic argument, which is how do we get surplus and deficit countries to work together to try and reduce the imbalances," he said.

"I am hoping for greater progress (on the issue) in South Korea later this week."

Osborne also said it was "in everyone's interest" that the hard-hit US economy recovers, dismissing criticism of Washington's economic stimulus measures worth 600 billion US dollars.

The move has sparked sparked concerns that it will release a flood of speculative money in mostly Asian developing economies and raising the spectre of asset bubbles.

"Don't underestimate one of the most dynamic economies the world has ever seen," Osborne added.

"I hope like everyone else that the US economy is going to be back firing on all cylinders."

Osborne said he hoped Britain could "partner" Hong Kong as the southern Chinese city moves to become an offshore trading centre for the yuan, which Beijing hopes will eventually become a global currency.

"There is potentially a very, very substantial new market for London and Hong Kong as partners," he said.

© 2010 AFP

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