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China wants to back High Speed 2

The BBC reports that the state-owned China Development Bank wants to become a significant backer of Britain's major infrastructure projects, the BBC has learned.

China Development Bank (CDB) is a wholly owned subsidiary of the Chinese government.

The BBC understands that it wants to directly fund two project areas in the UK - High Speed 2 and the next generation of nuclear power stations.

Despite the political controversy surrounding the £42.6bn HS2 project, CDB's position will be a welcome boost for supporters of the line.

Downing Street has previously insisted the route will be wholly funded by the taxpayer, but a large investor could come in to run the service or to build stations and ancillary connecting services. The first part of the 250mph line to Birmingham is due to open in 2026.

Premier Li offered direct help to build HS2 during Mr Cameron's visit to China last December. That offer, which came as surprise to Number 10, was quickly followed by China Railway Group, a subsidiary of the state owned China Railway Engineering Corporation, saying that it could also help with construction projects connected to HS2.

"HS2 could be an attractive investment opportunity," said Sir Gerry, who is also the chairman of pension provider, Standard Life. "This is not some wishy-washy diplomatic gesture."

"Soft power"

CDB is one of the biggest players in infrastructure development loans worldwide and is seen as an arm of Beijing's economic development policy as well as an extension of the country's "soft power" around the globe.

Sir Gerry describes it as the "trillion-dollar bank" and it spends billions of pounds every year supporting projects, particularly across Asia and Africa. CDB is now looking to extend its influence, and that of China, into Europe.

They are not alone. The Bank of China also announced a memorandum of understanding with the London Stock Exchange on Tuesday to increase its presence in the City.

On Wednesday, another state-backed giant, China Construction Bank, is expected to be confirmed as the first Chinese clearing bank designated for offshore renminbi trading in London - a shot in the arm for the City's aspirations to be the major centre outside Hong Kong for dealing in the currency.

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