The curious case of the trade deal in the night – China and Scotland

scotland china mou

Source: SinoFortune web site

Here’s a strange thing.

The Scottish (i.e. SNP) government has signed a memorandum of understanding (MOU) with two Chinese companies that could, according to media reports, result in £10 billion of Chinese investment in Scotland. The Scotsman newspaper has been on the case, only yesterday reporting Labour questions about it as a news item and asking what the government had to hide over the deal.

This is the chronology as known.

  • Prior to 21 March – (presumably) contact and negotiation, amount and nature unknown,  between the parties concerned.
  • 21 March – the first minister signs the memorandum with representatives of the companies concerned, China Railway No.3 Engineering Group and SinoFortone Group. The Chinese consul-general in Edinburgh is present. There is no Scottish government publicity for the event.
  • Also 21 March – one of the parties, SinoFortune Group, posts a press release with photos about the memorandum on its web site. It includes quotes from Brian Souter of ‘Souter Investments’ (more widely known as the only-begetter of Stagecoach group and a generous SNP donor) and a banker from the Royal Bank of Scotland.
  • 2 April – the first media reports (for example, The Scotsman again) appear about the MOU, referring to questions being asked ‘yesterday’ i.e. 1 April, but not an April Fool’s joke.
  • 4 April – the Scottish government, or its civil servants because ministers are in the period of ‘purdah’ preceding the Holyrood election, place a copy of the signed MOU on the government web site without comment or accompanying press release.

Apart from further media activity and statement by sundry politicians including the first minister in the last couple of days, that’s it.

The response to criticism of what’s happened by the SNP or its friends on social media seems to take one of two tacks:

  • EITHER it’s a wonderful opportunity for Scotland, why are you doing the country down yet again by criticising it?
  • OR it’s only a memorandum of understanding, i.e. a preliminary statement of intent that makes no commitment, why are you blowing it up to something it isn’t?

Well, as they say in the classics, you can’t have it both ways.

I’ve no doubt the media (or parts of it) will ferret away at what’s really going on and come up with answers to some of the big questions that are doubtless occurring to all of us. That’s good because we’re not likely to get any real examination of the subject in the new parliament post-5 May with a continued SNP majority and a probably weakened opposition. Meantime here are some of those curious aspects of the case I referred to in the title of this article.

Why such great modesty about the MOU? There was no Scottish government press release about it on the day it was signed although a release was placed, un-noticed, on the web site of SinoFortune. On the same day, 21 March, the Scottish government issued no further than 21 press releases about topics as varied as work on a bypass getting underway and extension to a whistleblowing alert line. In fact in the four days from 21 March to the last press release on 24 March before the period of purdah began, they issued no fewer than 66 press releases. This was an administration in pre-election publicity overdrive. But not about £10 billion of good news. Curious.

Who was involved in or around the MOU and why?

Was Brian Souter’s contribution to the SinoFortune press release no more than a rent-a-quote from one of the Scottish business world’s great and good, or does he have some more substantial interest in the arrangement? If he does, could it possibly relate to Stagecoach’s rail interests, one of the signatories to the MOU being the, by our standards curiously-named and majority Chinese government state-owned, China Railway No.3 Engineering Group? One of the press reports on the MOU quotes a researcher at the Beijing National Development and Reform Commission (NDRC), a Chinese government agency, as saying ‘With high-speed trains traveling at a speed of over 300 kilometres per hour, it certainly will help Scotland change the situation in which its ground commuting systems long been dominated by automobiles’ (sic). Would that be high speed rail to cover the 50-odd miles between Glasgow and Edinburgh, the far-flung outposts of Edinburgh commuting in Fife (new bridge alert), or a yet unplanned link to the English high speed rail network that isn’t scheduled to go North of Manchester? Also curious.

What is the involvement of the Chinese government in all this? The consul-general seems to have smiled benignly on the unpublicised signing of the MOU but the Chinese state clearly has some sort of interest in whatever’s going on. Is it the same sort of interest that led to rent-a-panda at Edinburgh zoo? Is there a relationship to one of the visits to China made by Alex Salmond (three by 2011, another in 2013) or Nicola Sturgeon herself (post-indyref world tour)? Curious yet again.

On a more parochial level, who wasn’t involved on the Scottish side of the signing and why? There seems to no sign of anyone else present or involved apart from the first minister. Where were other ministers – the finance secretary, the cabinet secretary and minister ‘responsible’ for external affairs, or trade? Where was Scottish Enterprise? You have to wonder if this was a last-minute rushed event more to do with the first minister than anything or anyone else. Maybe not so curious.

Related to the question of involvement, where was the UK government in all this? Isn’t foreign affairs a reserved matter for Westminster? Why don’t they crack down on the SNP’s often naïve posturing on the world stage? Their lack of activity may not be curious in the run-up to the Holyrood election but it will be curious if they don’t do something about this sort of thing post-May.

The whole thing’s curious. I shall watch with interest how the story unfolds.

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