Britain should make clear that the Hinkley review is for economic, not security, reasons, says leading business figure

Peter Batey, one of the most senior British figures in the China business community, says British Prime Minister Theresa May should not listen to junior advisers when determining Sino-UK relations.

The British government has been accused of Sinophobia over the decision to review whether to build the Hinkley Point C nuclear power station in which China would be a major investor.

May's chief of staff Nick Timothy is said to want a more distant relationship with China than the one envisaged when Chinese President Xi Jinping visited Britain in October.

"I would hope that ministers were making these decisions, not 30-year-old kids who have these advisory positions in No 10 (Downing Street)," he says.

Batey, who is founder and chairman of Vermilion Partners, and who was a political private secretary to former British prime minister Edward Heath, says the British government needs to make clear the review is taking place for economic and not security considerations if it is to avoid damaging relations between the two countries. May has now attempted to dampen down the controversy with a personal letter delivered to the Chinese President.

"I think there will be tremendous damage to the bilateral relationship if it doesn't go ahead. The government should say plainly it is an economic issue, not let this impression build up that it's a security one instead.

"There really ought to be some consistency between the position of one Conservative government and the next. I don't like to see these great oscillations in policy. After all, a British government made this (the Hinkley Point investment) a central feature of the Chinese president's state visit, so they have to recognize their actions have consequences for leaders of other countries as well."

Batey, a former chairman of the British Chamber of Commerce in China, who last year was awarded the Companion of the Order of St. Michael and St. George for services to Sino-UK relations, says it is wrong to present former prime minister David Cameron and chancellor George Osborne in wanting to deepen UK-China relations as following an outlier strategy.

"Is it not consistent with the approach of, say, the Germans to China? They have maintained a close relationship with China over a far longer period than we have. Look at the number of visits Chancellor Angela Merkel makes to China."

Batey, 58, who was speaking in his offices in Beijing's China World complex, says the China row only compounds Britain's decision to leave the European Union in the June referendum.

"I saw there was a headline running across the bottom of the screen this morning saying that Nissan is now worried about its investment in Sunderland (the Japanese car maker has its largest European manufacturing base near the city). This is close to my heart because I come from that part of the world.

"The great irony of it all is that it is these people in the northeast who voted for Brexit. They have benefited enormously from Britain's membership of the European Union but they simply didn't see it that way."

Batey believes the decision was a "leap in the dark" for many people who voted to leave because they were "not happy with their lot" rather than on any particular view about the EU.

He believes ultimately - despite what the politicians currently say - there could eventually be a second EU referendum, and people may decide to remain.

"We've first got to ask ourselves whether Brexit will happen and what form it will take. People knew what they had when they were in the European Union, or thought they did, but they didn't really know what they were going to have in terms of coming out.

"The government is now seeking to craft the package, in which one of the most important issues will be whether we remain part of the single market. It may want to put that to the people whether through a general election or a further referendum. It may dawn on people that if we want to remain in the single market, they might be better off remaining in the European Union."

Batey, who is from Consett in County Durham and studied philosophy, politics and economics at Oxford University, is celebrating 30 years in China this year. He first arrived to work as a representative for accountants Arthur Andersen.

He set up Vermilion Partners in 2004 and has been involved in a number of high-profile investment deals involving China and the UK. His firm advised on the acquisition of English Premier League side West Bromwich Albion by Chinese entrepreneur Guochuan Lai, which was announced earlier this month.

One of the big concerns about the UK leaving the EU is how it will impact on Chinese investment in Britain.

"It certainly might affect it. One of the reasons why companies from China or Asia - although not the only reason - invest in the UK is to have access to the European market.

"On the other hand, China has been very successful in the European market anyway. What is driving most of China's outbound mergers and acquisitions at the moment is not really market access but the acquisition of technology. The problem area for the UK could be financial services, whether institutions who base themselves in London can passport their operations anywhere else in the European Union. So far, however, there hasn't been an enormous amount of Chinese investment in the financial services sector."

The UK leaving the EU has a personal dimension for Batey as it was his former prime minister boss who was the undoubted driving force behind the country joining the then Common Market in 1973.

Batey has been instrumental in preserving Heath's legacy, being now behind the charitable foundation trust to preserve the prime minister's former home Arundells in Salisbury as a visitor attraction. This year is the centenary of his birth and there will be an event in Beijing next month to celebrate this.

Does the Brexit decision affect his legacy?

"Well, look in terms of anybody's legacy, we were a member of the European Union from 1973 and to at least 2016 and beyond. I think membership has contributed greatly to the prosperity of this country for that period. I think that in itself is a substantial legacy."

He believes those who think Britain can create some new great Commonwealth trading bloc involving Canada, New Zealand and Australia are not living in the real world.

"It is a folly. The Australian economy is only a fraction of the size of the British economy and you have to look also at the distances involved."

Batey insists that being a member of the European Union never prevented Britain doing trade with whoever it liked anyway.

"In many ways we had the absolute perfect deal with the European Union, which is what makes it all such a shame. We had the bits of Europe that we wanted and not the bits we didn't want. We weren't in the single currency, nor part of the Schengen passport area and we had opted out of ever-closer union."

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