The Chancellor personally intervened to prevent the Chinese President coming to Birmingham during a high-profile visit linked to major trade deals, the Birmingham Post has learned.
Instead, George Osborne he insisted President Xi Jinping go to Manchester, the heart of his pet so-called "Northern Powerhouse" project.
Mr Xi's four-day state visit is seen as an opportunity to secure further trade deals and investment from China, the world's second-largest economy.
Birmingham had been pushing for Mr Xi to come to the city and the Chinese themselves wanted the visit to take place, the Post has been told.
Those lobbying for Birmingham included senior councillors and officials, John Lewis managing director Andy Street, who also chairs the Greater Birmingham and Solihull Local Enterprise Partnership, and Business Secretary and Bromsgrove MP Sajid Javid.
The original plan was to use the visit to announce that Chinese manufacturer Changan Automobile was to create hundreds of jobs by relocating its UK operations to Birmingham Business Park but this actually came out last month.
Announcements about Chinese investment in rail and infrastructure were also planned.
China is also set to build the HS2 high-speed rail line, which will initially run between London and Birmingham, after Mr Osborne last month invited Chinese firms to bid for contracts.
But even though the £50 billion line is expected to have its headquarters in Birmingham, the city will not be included in the state visit.
Mr Xi will follow an itinerary drawn up by the UK Government which is standard practice with all visits by foreign leaders.
He will fly into Manchester on Thursday evening and stay there overnight.
On Friday, he will have lunch at Manchester Town Hall, attended by local council and business leaders.
He will visit The University of Manchester, accompanied by Mr Osborne, and Manchester City's stadium, with Prime Minister David Cameron.
The Government has made Manchester the heart of its flagship "Northern Powerhouse" policy which is designed to boost the economy in the north of England.
However, Birmingham will have a delegation at a business summit in London on Wednesday where discussions will take place with Chinese investors.
A source in Birmingham City Council said: "We are meeting the money men which is what matters most."
The Government says the state visit will see more than £30 billion worth of trade and investment deals completed, creating over 3,900 jobs across the UK.
Asked why the Chancellor had insisted the Chinese delegation visited Manchester rather than Birmingham, a Treasury spokesman referred us to Number 10 press office.
A Number 10 spokesman said: "The details of the visit were agreed between the Chinese and us and there is no reason for us to comment further."