Some proposed investments from China that were expected to regenerate England's northern cities have failed to materialize, dulling prospects of a "golden era" in China-U.K. relations promised by former U.K. Prime Minister David Cameron and his Chancellor George Osborne, the Financial Times reported Feb. 2.
Peel, a U.K. private property conglomerate, signed an agreement with China's Sam Wa Resources Holdings to build a £175 million international trade center in Wirral on the River Mersey. A £4.5 billion redevelopment of disused docks over the water from Liverpool was also planned.
But the proposed development is "no longer going ahead," said a Wirral council statement. The deal was first discussed in 2010.
Stella Shiu, chairwoman of Sam Wa, was declared bankrupt in a Hong Kong court in 2008 for failing to repay a loan, the FT reported in 2013. Several companies registered under her name had been dissolved in China. Shiu did not respond to a request for comment on Feb. 1, the report said.
In another case, Sheffield, which has lost many of its manufacturing jobs to China because of cheap competition, announced in 2016 a £1 billion property deal with Sichuan Guodong Construction, said to be the largest ever in the U.K.
The construction group would invest the money over a period of 60 years, with the first five projects attracting £220 million within three years, Sheffield's Labour council said.
But Sichuan Guodong has already backed out of a project to buy and convert a historic library into a hotel after it discovered the remedial work would cost more than expected. Sheffield's city council said it is working with the Chinese company on other projects in the city. Sichuan Guodong declined to comment.
Former council leader Lord Scriven, from the Liberal Democrat party, said deals with Chinese companies were like "candyfloss."
"It is spun into something substantial and alluring but the moment you touch it, it starts to disintegrate," he told the FT. "Is the investor a strategic fit for Sheffield? Are we sure the due diligence has been done?"
He has filed requests for more information on Sheffield's agreements with Sichuan Guodong, but has been refused on grounds of commercial confidentiality, said the FT.
