Brown push for Rover deal on China tour

CHANCELLOR Gordon Brown, beginning a three-day tour of China today, was expected to use his first visit to the Asian giant to lobby for a tie-up between ailing carmaker MG Rover and Shanghai Automotive Industry Corp (SAIC).

Brown's intervention could be critical in pushing the deal through after it reportedly ran into difficulties with China's regulators.

If successful, the transaction - which could see SAIC taking a 70% stake in Rover for £1bn - may help safeguard thousands of Midlands jobs.

Brown is due in Shanghai tomorrow after holding talks with Premier Wen Jiabao and Finance Minister Jin Renqing in Beijing today. He was also set to deliver a speech lauding China's economic emergence.

MG Rover announced the possible investment from SAIC late last year, and the lifeline could help keep the group afloat and provide it with a sales outlet to the mainland.

In return, SAIC would take control of Rover's brand and access to the British company's design team. SAIC already has production tie-ups with Germany's Volkswagen and General Motors of the US.

It has said it wants to be one of the world's top-six carmakers by 2020. It is owned by the Shanghai city government, which must give any UK investment its approval. A green light is needed from the National Development and Reform Commission, which oversees investments by Chinese groups.

'I see the rise of China not as a threat but as an opportunity,' Brown was expected to say.