Agenda item

China Economic and Civic Programme - Progress Update

Report of the Director of City Growth

Minutes:

5.1

The Committee received a report of the Director of City Growth, Place Portfolio, containing an update on the programme of activities that had been developed between Sheffield and Chinese partner organisations, in connection with investment, trade and education and civic activity in the City.

 

 

5.2

In attendance for this item were Councillor Mazher Iqbal (Cabinet Member for Business and Investment), Edward Highfield (Director of City Growth) and Howard Varns (Programme Manager, City Growth).

 

 

5.3

Councillor Mazher Iqbal introduced the report, referring briefly to the present position, and circulating information relating specifically to Sheffield’s links with Chengdu.

 

 

5.4

Members of the Committee raised questions, and the following responses were provided:-

 

 

 

·             It was very difficult to provide a figure in terms of the level of investment made by China in Sheffield over the last two to three years.  As highlighted in the additional information circulated at the meeting, Sheffield’s relationship with Chengdu held massive potential for both the City’s citizens and businesses, and which included plans for a Sheffield-Northern Powerhouse Business and Trade ‘Incubator’ Office, to open in Chengdu’s High-Tech Zone in early 2018.  This would provide all partners in the City with a base and resource to assist with developing business and trade opportunities. The two main developments in the City Centre comprised approximately £60 million of Chinese investment in new retail space, apartments and offices.  In addition to this, a number of smaller businesses had located to the City, primarily for the benefit of the Chinese community.  There had also been major investment in terms of the development of ‘sister’ schools by Sheffield and Chengdu, within each other’s high technology and innovation parks, with Oasis Don Valley Academy at the Olympic Legacy Park to be replicated in Chengdu and, with funding from the Chengdu Government, a programme of teaching and student exchanges between the two schools then developed.

 

 

 

·             It would be very difficult to assess whether the City had benefited financially, as a result of the work undertaken in terms of attracting the Chinese investment.  The only way this could be assessed was by commissioning a qualitative piece of research, which would be at a considerable cost to the Council.  Officers could contact colleagues in the Core Cities to obtain comparative data in terms of how Sheffield had attracted investment as compared with the other Cities.  Officers would look at the possibility of asking a University student to undertake this qualitative research on behalf of the Council, as part of their course. 

 

 

 

·             Despite being unable to progress a viable scheme involving the Central Library building, Guodong had expressed a willingness to continue to work with Sheffield in terms of future investment in the City.  The Council would continue working with Guodong in terms of promoting other possible development opportunities in the City.  The Council received numerous enquiries in terms of investment opportunities in the City, and would treat any further offers from Guodong the same as from any other companies.

 

 

 

·             It was accepted that it was rare for the Council to agree a Memorandum of Understanding with a company in terms of future investment in the City, and that such an arrangement with Guodong had been agreed simply on the basis that it had been deemed as good practice by the Chinese.  If any investors requested a similar arrangement in the future, the Council would give consideration to this.

 

 

 

·             The proposals in respect of the ‘sister’ schools had come about as a result of an approach from Chengdu, who wanted to improve the links between the two cities by establishing a school in Chengdu, which would be the first English-style school established within the Chinese state education system.  The Council was also looking at further and broader partnerships between Chengdu and other schools in the City.

 

 

 

·             In terms of major investment schemes, following the press release issued in July 2016, the Council had looked at a number of investment projects.  The only project which had been identified as viable, and able to bring benefits to the City, was the refurbishment of the Central Library building in order to establish a commercially viable hotel but, as a result of the significant structural issues with the building, this project had no longer been deemed viable.  There were no firm plans in respect of any future projects at this stage.

 

 

 

·             A Sheffield-based architect firm had been engaged by Chengdu directly to design the ‘Sheffield’ school in Chengdu.  Oasis Don Valley Academy at the Olympic Legacy Park would be replicated in Chengdu, and it was hoped that the Academy in Sheffield would become a centre of excellence in terms of Mandarin teaching, with teachers travelling from China to work in the school.  It was hoped that the ‘sister’ school would open in Chengdu in March 2019.  The school in Chengdu would adhere to the Chinese national curriculum.

 

 

 

·             In terms of the current position with regard to potential Chinese investment in the City, only as and when any deals had been agreed, would Councillor Mazher Iqbal, or any future relevant Cabinet Member, visit China.  It was considered that Sheffield was ahead of a number of other cities in terms of working with Chinese partners and securing investment.

 

 

 

·             As the majority of the negotiations had been held with Chengdu, it had been considered that Sheffield would focus on strengthening its links with that City.  Whilst the Council had, and would continue to, track the various different investment possibilities available, it had not got either the resources or capacity to deal with all investment enquiries.

 

 

 

·             The Council was very mindful of the position with regard to Brexit in relation to future discussions with Guodong.  Whilst there was a level of uncertainty, the Chinese viewed Brexit as a positive in terms of future trading opportunities.  Work would continue to help Sheffield businesses export more to China, as well as to other countries.

 

 

 

·             Guodong had a considerable amount of money that they wished to invest in the City, and wanted to know what the Council’s plans were in terms of future development in the City, prior to any agreements being made.  A considerable amount of work had been done in terms of preliminary discussions and negotiations, which the Council was confident would result in investment in the near future. 

 

 

 

·             Officers would be happy drafting a paper setting out details in terms of the preparatory work undertaken to date, including a rough estimate of the costs of such work.  It had been considered that the costs involved in terms of the preliminary negotiations and discussions had been justified, given the potential for major investment in the future. 

 

 

5.5

RESOLVED: That the Committee:-

 

 

 

(a)      notes the contents of the report now submitted, together with the additional information set out in the paper now circulated and the responses to the questions raised;

 

 

 

(b)      thanks Councillor Mazher Iqbal, Edward Highfield and Howard Varns for attending the meeting and responding to the questions raised; and

 

 

 

(c)      requests the Director of Creative Sheffield to:-

 

 

 

(i)            assess the possibility of a University student undertaking a qualitative piece of research in terms of assessing how the Council was performing;

 

 

 

(ii)           explore with Silverdale School, the School’s current contact with China; and

 

 

 

(iii)          provide a written response in respect of the preliminary work undertaken.

 

Supporting documents: