Royal Dutch Shell Group .com

Daily Telegraph: Lloyd's leads rush for Chinese billions: "Jeroen van der Veer, Shell's chief executive, added that Shell was keen to grow its business in China.": Thursday 10 November 2005

By Christopher Hope, Business Correspondent (Filed: 10/11/2005)
Lloyd's of London spear-headed a major push into China by some of the UK's biggest companies yesterday after the insurer was given the go-ahead to start selling reinsurance in China.

Other British deals with Chinese companies were signed yesterday by Rolls-Royce, Arup and Collins Stewart Tullett, while BP and Shell said that they were wanted to expand their operations there.

President Hu Jintao with Tony Blair at Downing Street
President Hu Jintao with Tony Blair at Number 10

The flurry of deals coincided with the visit to Britain of China's president Hu Jintao and underlines UK plc's determination to exploit the opportunities presented by China, which is undergoing its own industrial revolution.

Lord Levene, Lloyd's chairman, said Lloyd's will be able to reinsure local currency business which makes up nearly 90pc of the total Chinese market.

He said: "This is a huge day for Lloyd's. Lloyd's has been working on this deal for the past six years and I have done for the past three years.

"China is becoming the second largest economy in the world and we have got to be in there. The sky is the limit. In 20 years' time it will be very substantial."

Lord Levene said the deal compared with Lloyd's reaction to the 1906 San Francisco earthquake when the insurer helped to rebuild the city. The US market is now Lloyd's biggest, worth $9billion.

Separately, Collins Stewart said it had won approval to open up a money broking operation in China after three years of negotiations. Terry Smith, chief executive, said: "It is a great opportunity - we are the first people in there."

 

The joint venture with Shanghai International Group should be up and running by Christmas. "It is potentially the world's largest market," said Mr Smith. "This is the workshop of the world and you would expect it to become one of the biggest financially."

At 10 Downing Street yesterday, president Hu and Prime Minister Tony Blair witnessed deals worth $1.3billion being formally signed between British and Chinese companies.

The biggest was Rolls-Royce's $800m agreement to supply Air China with Trent 700 engines for a fleet of 20 Airbus A330-200 widebody jets. Engineering consultant Arup was also hired to develop a master-plan for three new cities by the Shanghai Industrial Investment Corporation.

Earlier, President Hu told a meeting at Buckingham Palace of the chief executives and chairmen of some of Britain's top companies: "I see the great potential for future growth and I am happy about it." Speaking on the sidelines, Lord Browne of Madingley, BP chief executive, said there was "more of China for BP", adding: "We are the largest British investor but this needs to be expanded."

Rather than take a big stake in a Chinese company - such as BP's 4.3billion investment in Russia's TNK two years ago - Lord Browne said BP was focused on building alliances with joint venture partners.

He said: "TNK was specific to Russia. It is a great deal. Who knows if it would work with China? You have to remember the vast bulk of the oil and gas industry is in the hands of the state."

Jeroen van der Veer, Shell's chief executive, added that Shell was keen to grow its business in China.

The meeting was co-ordinated by the China Britain Business Council.

26 October 2005: Carlyle investment is a first for China
21 October 2005: Growing taste for travel and mobile phones fuels China's growth
20 September 2005: Murdoch speaks of frustration with China

Click here to return to ShellNews.net HOME PAGE


Click here to return to Royal Dutch Shell Group .com