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Business / Economy

China set to invest 105 billion in UK over next 10 years, report says

By Chris Peterson (China Daily Europe) Updated: 2015-10-16 19:25

Chinese and UK officials are forecasting a 'golden time' for relations between the two countries and a report is placing a figure on that amount – 105 billion pounds of Chinese investment here over the next 10 years.

The forecast is contained in a joint report by the independent think tank the Centre for Economic and Business Research and the international law firm Pinsent Masons.

"China remains on course to become the world's largest economy by 2030," says Scott Corfe of the CEBR.

"China is interested in energy and transport, and the UK has a significant infrastructure problem in both those areas."

Richard Laudy, head of the Global Infrastructure Sector of Pinsent Masons, says: "The scale of investment from China is expected to be a game-changer form UK infrastructure and potentially could propel Britain back into the global infrastructure 'premier league.' "

Two key areas attracting Chinese investor interest are nuclear energy and high speed rail transport.

Next week's state visit by President Xi Jinping is expected to focus attention on Chinese involvement in three planned UK nuclear power stations.

A new station at Hinkley Point in Somerset, southwest England, is a joint venture with France's EDF and Chinese investment, using French technology, while stations at Sizewell in Suffolk and Bradwell in Essex, both in eastern England, will use Chinese-designed reactors which will meet UK regulatory requirements, generally seen as amongst the strictest in the world.

Chinese rail firms are poised to bid for roles in the construction of Britain's proposed HS2 rail link, which could see Chinese-designed high-speed trains linking London with the country's northern cities at speeds of over 200 miles an hour.

"We estimate that over 105 billion pounds of investment will flow into the UK infrastructure and real estate from China between now and 2025," the report says.

"This includes 43.5 billion pounds of investment from China that we estimate will flow into UK energy infrastructure between now and 2025. Over 25.5 billion pounds of investment will flow from China into UK transport and other infrastructure between now and 2025.

"Over 36 billion pounds of investment will flow from China into UK real estate between now and 2025," the report concluded.

Gershon Cohen, head of Infrastructure funds at Aberdeen Asset Management, says "The UK has a massive infrastructure deficit from decades of under-investment. Chinese investment could help unlock much-need infrastructure development to support the UK economy."

Sir John Armitt, chairman of the UK transportation group National Express, says "the key difference is China's ability to take a much longer-term view of risk than the UK."

Both the nuclear power investments and Chinese involvement in the HS2 rail project are expected to be announced during President Xi's four-day visit from October 20.

To contact the writer: chris@mail.chinadailyuk.com

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