BEIJING: Britain and China agreed on Monday to a series of initiatives ranging from an expanded currency swap agreement, Chinese investment in British nuclear power, and a feasibility study for a scheme to connect the London and Shanghai stock markets.

Speaking on the second of a five day visit to China, finance minister George Osborne said Britain would be Beijing's "best partner in the West".

He said the recent market turmoil in China was no reason for Britain not to engage more deeply with the world's second-largest economy.

Osborne wants more Chinese investment in Britain, and has championed London's bid to become the dominant centre for offshore yuan trading in Europe. He said connecting the London and Shanghai stock markets would benefit Britain in the long run.

"It's in our interests that we have deeper and more mature financial markets across the world," Osborne told reporters, when asked whether a stock market link would put Britain at risk of contagion from future bouts of volatility in China.

"Britain should run towards China. We should be doing more business with China. We should be better connected to the Chinese economy, our financial institutions should establish stronger links."

The announcement follows the November launch of the Shanghai-Hong Kong Connect scheme, which allows foreigners to trade Shanghai shares from Hong Kong, and domestic Chinese investors to trade Hong Kong shares from Shanghai.

Since its launch, that scheme has suffered dwindling investment flows in both directions, with less than half of an already small quota utilised.

Still, linking Shanghai to the London Stock Exchange would mark a further significant step in the opening up of China's markets, potentially allowing domestic Chinese access to a wide range of British and European stocks.

Any link between the two markets would have to overcome significant hurdles, however, including differences in time-zones, and regulatory challenges.

Moreover, international investors' enthusiasm for China has fallen since the country's share markets began to crash in June.

Subsequent heavy intervention in both share and currency markets by Chinese regulators dismayed some foreign advocates, who feared that it revealed Communist China's lingering distrust of free markets.

To enhance cooperation in global markets, China and Britain will expand a yuan/sterling swap line, though neither provided details, and China's central bank will issue short term yuan debt in London "in the near future", the first outside of China.

Britain wants to "continue to play our role as the world's leading financial centre in helping with the gradual internationalisation of the renminbi", said Osborne, using the formal name for the Chinese currency.

The British government has moved forcefully to strengthen financial ties with Beijing. Earlier this year, it broke ranks with the United States by signing up as a potential founding member of China's new infrastructure investment bank, which is seen by some as challenging the Japan and U.S.-led Asian Development Bank.

Critics have accused British Prime Minister David Cameron's government of treading too softly on human rights issues as it pursues deeper trade ties with China. Osborne's visit comes ahead of Chinese President Xi Jinping's trip to Britain next month.

Despite disagreements over human rights and the former British colony of Hong Kong, China values Britain's staunch defence of free trade and lack of obstacles to investing in Britain.

Osborne announced that Britain will also provide 2 billion pounds ($3.1 billion) of initial support for a new nuclear power station at Hinkley Point in southwest England with China's backing.

Osborne said Britain welcomes "potential for majority Chinese investment in future nuclear projects in the United Kingdom" and that it sees an opportunity for Chinese investment in high-speed rail, given China's expertise in the area.

"We want to make sure that Chinese companies, perhaps partnering with British companies, can bid into the contracts when they're let -- but let's be clear the contracts will be done in a completely impartial way."