China's president Xi Jinping in Manchester as part of UK visit

George Osborne, left, stands with China's President Xi Jinping, right, his wife Peng Liyuan, centre Image copyright AP
Image caption Chancellor George Osborne at a London event with China's president Xi Jinping (right) and his wife Peng Liyuan

China's president Xi Jinping will be in Manchester as he comes to the end of his UK visit. A mixture of excitement and protest is expected for what is believed to be the first time the city has hosted a state visit.

It comes as the government is trying to persuade the Chinese to invest in the region's economy.

About 230 people will sit down for lunch in Manchester Town Hall to watch civic history in the making.

Local dignitaries and business people will break bread with President Xi and David Cameron, and witness the state visit.

He will also visit Manchester City's stadium and Manchester University.

It is not a coincidence the city is being placed on the diplomatic map.

The Chancellor and MP for nearby Tatton, George Osborne, has been ambitious in marketing the "Northern Powerhouse" - his strategy to strengthen the economy in the north of England.

'Sales pitch'

Last month Mr Osborne visited China to build economic and political links, and he took local government leaders from northern England with him - a sales pitch for the "Northern Powerhouse".

On the final day in Chengdu, Mr Osborne even published a catalogue offering the Chinese a range of investment opportunities.

Image copyright WPA Pool
Image caption George Osborne has been keen to champion graphene's development in Manchester

Part of the Chancellor's problem is that he is ambitious. Creating a "Northern Powerhouse" would reverse a historic economic decline.

An important part of the strategy rests on creating new transport infrastructure. None of this is cheap.

But at the same time, George Osborne has pledged to eliminate the budget deficit.

That's why he's turning to others for the finance. And China has plenty of spare cash.

Capital investments

But while the Chinese have shown a willingness to invest in property schemes such as Manchester Airport City or Middlewood Locks in Salford, there does not appear to be as much enthusiasm to put cash into infrastructure.

Will that change?

It would be odd if President Xi did not come bearing gifts. But the main announcement expected is new direct flights between Manchester and Beijing.

That will be a welcome boost, calculated to be worth about £50m per year to the regional economy. But it does not feel like a breakthrough announcement.

The reality is that George Osborne has spent a lot of political capital building links with China. And he will need a fair bit of Chinese financial capital in return to convince critics that it was worth it.

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Image copyright Getty Images
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