Heseltine talks trade not democracy

Michael Heseltine, the President of the Board of Trade, yesterday hailed "a very good start to a new chapter in Sino-British relationships", and said he had received a "very warm reception" from the Chinese Prime Minister, Li Peng.

But Mr Heseltine, leading the largest-yet British trade mission, was less forthcoming on how to balance the Government's desire to do more business in China with its commitment to pursue greater democracy in Hong Kong against Peking's wishes.

Mr Heseltine's seven-day visit is intended to drum up business for British industry. Meanwhile, in Hong Kong, the Governor, Chris Patten, is still at loggerheads with Peking over issues such as the colony's future Court of Final Appeal.

Asked by a BBC reporter whether there was now a two-track strategy emerging from the Government, Mr Heseltine lashed out: "I suppose I would broadly say that there is always some mischievous slant that the British journalists will find and that sounds pretty close to the first one I've heard today."

Mr Heseltine confirmed that he had discussed Hong Kong in his meetings with Chinese leaders. But he said that it would have been "quite inappropriate" for this to have included detailed talks "or the specifics of Hong Kong policy". Asked how his "new chapter in Sino-British relationships" squared with the refusal of Lu Ping, China's top official on Hong Kong affairs, to meet Mr Patten during a visit to the colony this week, Mr Heseltine said: "I can only talk about the warmth of the reception that I have received here in Peking."

As the first Cabinet minister to visit China for nearly two years, Mr Heseltine preferred to dwell on prospects for improved Sino-British relations. Li Peng was quoted in yesterday's official China Daily as hoping the visit "could become a turning point in improving Sino-British ties". Mr Heseltine said: "It is quite apparent that both governments look to the future ... there will be co-operation at government level, there will be co-operation at company level."

Such co-operation was toasted on the lawn of the British ambassador's residence yesterday as a number of UK companies celebrated business links with China. There was general bemusement, however, at Mr Heseltine's claim that British companies had signed up to more than £1bn of business "in the run-up and during" the trade mission.

He said the figure covered the past "few weeks" and included business ranging from technology sharing agreements to export deals to planned British investment in Chinese joint ventures. Department of Trade and Industry officials said they could not provide a full list of the deals because some companies "did not want publicity".

Recent trade missions by the United States, Germany, France and Canada have ended theatrically with billions of dollars of agreements or planned deals being signed in a stage-managed finale. The British team tried to follow suit yesterday, but the only genuinely new deal appeared to be a £60m joint venture between Bass Brewing and a Chinese brewer in Jilin province. Others, including a £110m boiler contract for Babcock Energy and a £30m fibre optic cable link for GPT have been known about for months.

According to Chinese official statistics - much quoted by Mr Heseltine - the value of promised and actual British direct investment in China at the end of 1994 was nearly $5.5bn (£3.6bn), more than any other European country. Of this,$1.2bn has already been spent on 1,017 projects. Britain also ranks first in Europe for technology assistance to China, he said. However, Britain's trade deficit with China shows no sign of shrinking from last year's £800m.

Today the trade mission moves on to Shanghai, but one world-famous British export will remain a visible presence in Peking. Arsenal football team arrived yesterday for a two-match tour. Asked to comment on the coincidence of their own and Mr Heseltine's visit, the Arsenal captain, Tony Adams, said: "I'm sure he'll be doing a lot of business that we can't do. And we'll be doing a lot of football that he can't do."