China's Premier promises steps to boost UK trade

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Media captionChinese Premier Wen Jiabao: "We will welcome more British products into the Chinese market"

China's Premier Wen Jiabao has pledged to take measures to increase trade between Britain and China.

Mr Wen, who is on a three-day visit, said he wanted to welcome more UK products into China.

Speaking to the BBC's business editor, Robert Peston, he also said he would like to see more enterprises based on the China-owned model used by the MG car plant at Longbridge.

And he said China would continue to support the crisis-hit eurozone.

China's leading automaker the Shanghai Automotive Industry Corporation became the owner of MG Rover's Longbridge plant after a merger in late 2007 with its smaller rival, Nanjing Automobile Group.

The cars are designed and assembled in the UK, from parts made in China.

Mr Wen visited the plant, once the site of Britain's mass-car manufacturing where a launch ceremony for the company's new sports sedan the MG6 Magnette took place.

Mr Wen also told the BBC it was a priority to boost consumption by the Chinese, as well as reducing its foreign trade surplus and reliance on exports.

He described China as Europe's friend in its time of acute need.

"When some European countries were hit by the sovereign debt crisis, China has actually increased the purchase of government bonds of some European countries and we have not cut back on our euro holdings.

"I think these show our confidence in the economies of the European countries and the eurozone."

He added: "Before I came to the UK I visited Hungary. We reached agreement on the Chinese government buying a certain amount of government debts of bonds on the Hungarian side... that is China lending a helping hand to Hungary at a time when that country is in difficulty.

"We have done this for Hungary and we will do the same thing for other European countries."

China has foreign reserves of about $3tn and is believed to be diversifying some of its holdings from US dollars into euros and other currencies.

'Flagship projects'

Image caption The BBC's business editor, Robert Peston, interviewing the Chinese premier, Wen Jiabao

Up to £1bn worth of business deals are expected to be announced during Mr Wen's three-day UK tour.

Culture Secretary Jeremy Hunt said China offered "huge opportunities" adding that it was important to have a full dialogue with China.

Mr Hunt, who earlier accompanied the life-long Shakespeare admirer Mr Wen to Stratford-Upon-Avon, said: "We want to have a broad-based relationship with China which encompasses political, economic and social dialogue.

"It's obviously an incredibly important economic power and a massive investor in the UK.

"But what this visit is about is saying that it's not just about jobs, it's also about a broader cultural relationship which is the best possible way to make sure we understand each other and avoid the kind of misunderstanding that so can bedevil relationships, as has happened in the past."

With China having overtaken Japan as the world's second largest economy, many European companies are looking for investment, while Chinese acquisitions in Europe have also been increasing.

Mr Wen is thought to be leading a Chinese bid for work on the HS2 high-speed rail line between London and Birmingham.

Chinese ambassador Liu Xiaoming said last week China was looking for "flagship projects" and had "the knowledge, expertise and experience" to assist with HS2.

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Media captionJeremy Hunt: "We want to have a broad-based relationship with China"

On Monday, Mr Wen will attend the annual UK-China Strategic Summit and meet his British counterpart, David Cameron.

That meeting will also involve the Foreign Secretary William Hague and the Chancellor George Osborne.

Mr Wen will also hold talks with Deputy Prime Minister Nick Clegg and business leaders, before leaving for Germany on Monday.

Human rights

While economic, commercial and political ties are the focus of the visit, Britain remains concerned about China's human rights record and the issue is expected to be raised in talks, says the BBC's Adam Mynott.

Last week dissident artist Ai Weiwei was released from custody in China, heading off protests which might have greeted Mr Wen's visit to Britain.

On Saturday news broke that another prominent Chinese dissident, Hu Jia, had been released from prison and reunited with his family.

He had campaigned for the environment and in support of patients with Aids.

But the Free Tibet pressure group has held a demonstration outside the Longbridge plant, and has promised to hold demonstrations outside Downing Street when Mr Wen goes to meet Mr Cameron.

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