How did the China deal happen – and why did it fail?
How did Sheffield end up doing a £1 billion deal with China – and why did it collapse?
It all started in 2015 when the then Chancellor George Osborne said that he wanted Britain to be China’s “best partner in the West” and to share a “golden decade” together.
Coun Mazher Iqbal, cabinet member for business and investment, explained: “Before I came into this role, I remember George Osborne taking a number of city leaders on this trade delegation to China as part of the Northern Powerhouse initiative with various government departments, including Trade and Industry.
“Sheffield met Mr Wang and we entered into an agreement where he says, I have a billion pounds to invest and we say great news, how can we work together? We put Sheffield investment opportunities in front of Mr Wang.”
Mr Wang’s daughter studied in Sheffield so he was already aware of the city.
A year later council leader Julie Dore, with her then deputy leader Leigh Bramall, flew out to China to sign the deal.
The 60-year partnership with Sichuan Guodong Construction was supposed to be the biggest Chinese investment outside London.
An initial £220m deal promised millions in foreign investment into the city over three years, and up to £1 billion over the following 60 years.
In the now infamous photo, Coun Dore wears a floral buttonhole and panda scarf as she shakes on the deal with Mr Wang. On her return, she said: “This deal is huge, this is a massive vote of confidence in Sheffield. It’s £220m to invest in our great city.”
Over the past three years opposition councillors have repeatedly questioned the lack of progress and Freedom of Information requests have kept a tally on how much the council is spending on wooing Chinese investors.
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Finally, this week, Labour admitted it was dead in the water. Mr Wang hasn’t invested any money in the city and isn’t even acknowledging the council.
Coun Iqbal admitted he didn’t know when the council was last in contact with Mr Wang. “Last year Sheffield Property Association created a pitch book outlining development opportunities in the city. It was a really good piece of work that we sent to Mr Wang but he didn’t respond.”
The council says Sichuan Guodong Construction may have been caught by increased restrictions made by the Chinese Central Government which has made it harder for private companies to invest in real estate projects outside mainland China.
Two of the five sites exclusively offered to Mr Wang, Hoyle Street and one at West Bar, have already been developed.
Coun Iqbal is keen to stress plenty more doors to China have opened. “In 2016 deals with China were in their infancy and we have learnt a lot.
“No money has come out of Mr Wang but it definitely put Sheffield on the map and brought in a number of opportunities.
“The council is supporting the New Era development and continues to have the largest number of Chinese students outside London at its universities. There are many other Chinese deals being considered across Sheffield.
“Sometimes things don’t benefit the council but they help the universities and the Chamber. It’s Team Sheffield.”