Manchester Airport becomes catalyst for links with China

Manchester Airport is pushing forward an array of cooperation projects with China, and in the process acting as a catalyst for further economic links between China and the English midland and northern regions.

On October 23, the Airport announced its first direct flight to Beijing, to be operated by Hainan Airlines, which is estimated to generate economic benefits of 250 million pounds for the UK economy over the next decade.

Meanwhile, the construction of the 800 million pound commercial complex adjacent to the airport has already started, thanks to the project's partnership with the Chinese construction firm Beijing Construction Engineering Group.

Known as Manchester Airport City, the commercial complex is a major infrastructure project in that hopes to attract the regional headquarters of British and foreign firms.

On October 23 the airport also announced the launch of a 'China Cluster' within the Airport City, a 130 million pound project to provide a commercial base for Chinese businesses arriving in the UK and offering a wide range of high quality office premises.

The China Cluster will be based around two campuses within the Airport City development – Wuhan Square and Shenzhen Gardens – together totaling 45,000 square meters of space.

Both deals were announced in the presence of Chinese President Xi Jinping and the UK Prime Minister David Cameron. Manchester was the last stop of Xi's four-day UK state visit.

Xi said in a speech during the launch ceremony that Airport City Manchester is one of the largest development projects in Europe, and its emphasis on smartness and the internet is in line with the trend of industrial development in the world today.

He said that the project will not only serve as a hub for passenger transport, business and logistics in the UK, and even Europe, but also become a catalyst for further development in Manchester and north England.

"Economic cooperation between China and the UK have produced fruitful results in recent years, China's investment in the UK in the last three years is three times that of the past 30 years combined, with infrastructure being a highlight," Xi said.

"Airport City Manchester is a first project to be materialized since our two countries signed a memorandum of understanding on infrastructure cooperation in 2011," Xi said.

"It is also the first major infrastructure project in the UK, with the involvement of a Chinese company in the form of equity investment," said Xi, adding that he hopes the two sides will work closer together and make Airport City Manchester a demonstration of the two countries' future infrastructure cooperation.

Xie Haoming, president of Hainan Airlines, said that his team first started discussions with Manchester Airport over this potential route three years ago. After conducting extensive research on the market demand for the direct flight, his team decided to launch the flight, believing that passenger numbers are sufficient.

"We realized that Manchester is a hub for many commercial activities in the English Midlands and North England, and having a direct flight between Manchester and Beijing makes sense because it will capture passenger flow from an area much larger than Manchester itself."

"We have witnessed the number of students from China coming to Manchester and surrounding areas grow, and business passengers are also growing on this route, so we are convinced that the route will be economically viable," says Xie.

Hainan Airlines will begin operating the new route, using Airbus A330-200 aircraft, between Manchester and Beijing Capital International Airport from June 10, 2016. Manchester Airport will become the only UK airport outside London to offer direct scheduled services to Mainland China, and this route marks the first time Hainan Airlines will operate a UK route.

The flights will provide a connection between Manchester and Beijing for the first time, giving the 100,000 passengers travelling each year between the two cities the convenience of direct scheduled services.

The Manchester-Beijing route is worth at least 250 million pounds in economic benefits to the UK over the next decade, with two-thirds being felt directly in the Northern economy in terms of increased jobs, economic activity and tourism, according to estimates provided by the airport.

By providing a non-stop service, the new route will also generate journey time savings worth 5 million pounds every year for business passengers and avoid the inconvenience of changing planes at another airport.

Charlie Cornish, chief executive officer of the Manchester Airport Group, says that the Manchester Beijing route is very significant for the airport, because the high amount of passengers expected on the route will provide consumption for the airport's restaurants, shops, and nearby hotels, as well as lead to more investment into surrounding areas, which benefit the airport indirectly.

In December, Cathy Pacific started to operate the first direct flight between Manchester and Hong Kong, and Cornish says the estimated economic benefits of the flight are now been experienced.

The Hong Kong flight, which currently runs four flights a week, may increase to a daily flight, says Cornish, adding that his team is in discussion with Cathy Pacific about this increase. He says that in due course as the Beijing-Manchester flight demand increases, then he could see Hainan Airlines potentially increase this route to a daily flight too.

Manchester Airports Group has actively been pushing for a direct China since the signing of a sister agreement with Beijing Capital International, the owners of Beijing Airport, in 2011.

Meanwhile, construction of the Airport City is already one year into its timeline, and 25 percent of all infrastructure is complete, says Dai Binbin, chairman of BCEG.

Announced in October 2013, Airport City Manchester is a joint venture partnership that brings together Manchester Airports Group, BCEG, Carillion PLC, the Greater Manchester Pension Fund and Argent.

BCEG is one of the equity partners of the deal, owning 20 percent of the overall equity stake. It is one of the contractors for the construction of the project, alongside Carillion, and is expected to complete 50 percent of all the construction work.

Currently BCEG has a small team of management staff based at Manchester airport, but it has subcontracted out most of the construction work to local suppliers in the UK.

"We want to create a win-win relationship so we handle a lot of the management work and we subcontract the actual construction work to local firms, who are very familiar with construction work in the UK market," Dai says.

Dai says that one major advantage of BCEG in the UK market is its international experience, and another is its access to good value for money construction material, which it has helped to select and bring to the UK for the Airport City project.

BCEG, which was established in China in 1953, already has a presence in many developing countries. It expanded into Western markets in 2007 by building a hospital in Dallas.

One key event that allowed BCEG to expand into Dallas was because the company won a contract to participate in the construction of the US embassy in Beijing in 2004, a project that took four years to complete.

At that time, it was the only Chinese company working on the embassy construction, and through this project the company learnt about US construction standards and the characteristics of the US construction market, and subsequently it won the Dallas contract.

Following on from this success, BCEG wanted to further expand into the European market, and the Airport City was its first step on this journey.

Dai says that he sees many more opportunities for BCEG to further expand into the UK market because the UK's Northern Powerhouse initiative is creating great demand for infrastructure construction, and BCEG's credential on the Airport City project will greatly help.

The Northern Powerhouse initiative is a UK government plan to boost economic growth in the north of England particularly around the "Core Cities" of Liverpool, Manchester, Leeds and Sheffield. The proposal is based on urban agglomeration and aims to rebalance the UK economy away from London and the south east.

To contact the reporter: cecily.liu@mail.chinadailyuk.com