Chinese president Xi Jinping addressed the Palace of Westminster on Tuesday afternoon. The focus, as expected, was on economic ties.

The Financial Times reported Tuesday that China's central bank has attracted more than 30 billion yuan ($4.7 billion) in orders for its first debt sale in London's markets, coming alongside bilateral investment deals worth an estimated 30 billion pounds ($46 billion) that are expected to be agreed during Xi's visit.

Will this visit usher in a new era for overseas investment by China? It is still too early to draw simple conclusions. But the UK can perhaps serve as a testing ground to help dispel concerns over China's high-tech investment and enable Chinese firms to expand their business in the EU.

Official data from China's Ministry of Commerce shows that Chinese firms' non-financial investments in Europe rose by 367.8 percent year-on-year in the first five months of this year, but some investments are still distributed in low value-added industries. However, investment in low-end sectors is not likely to satisfy China, because the country now intends to speed up the process of outgoing investment in high-end manufacturing industries such as high-speed rail and nuclear power plants.

Over recent decades, China has seen fast-growing competitiveness in high-end manufacturing industries, along with the emergence of multinationals such as telecommunications equipment maker Huawei Technologies. In May the State Council, China's cabinet, outlined 13 prioritized sectors for enhancing cooperation with other countries and regions. The sectors - including telecommunications, automobiles and shipbuilding - all involve high-end manufacturing.

However, under the pretext of security concerns, the EU has often put up barriers to Chinese companies' investment in certain European industries. Therefore, Britain can perhaps serve as a pragmatic bridgehead for Chinese investment in the EU's high-tech manufacturing industries.

According to media reports, Britain will give China a stake in the Hinkley Point nuclear power plant in southwest England during Xi's state visit. There has, unsurprisingly, been controversy about Chinese investment in the nuclear project, but the misunderstandings will be easy to eliminate if the project runs smoothly. Xi said in an recent interview with Reuters that the Hinkley Point project is the product of tripartite cooperation between China, the UK and France. He also said that he hopes companies from the three countries will fully leverage their respective strengths to ensure the successful launch of this project.

A "golden era" in China-UK ties is expected to make it possible for Chinese firms to invest in some sensitive industries in the UK, and successful individual investment cases will help to set a good example for other places in the EU to treat Chinese investment fairly. Besides, the UK's open attitude toward Chinese investment will also encourage the EU to further lower market access thresholds during the ongoing negotiations over the China-EU Bilateral Investment Treaty (BIT).

There is still a lot of potential space to promote bilateral investment between China and the EU, which could be a win-win situation for both parties. Chinese investment will help to create job opportunities and bolster the economy, and Cameron's office was quoted by Bloomberg as saying that deals brought by Xi will create 3,900 jobs in the country.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn

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