UK top European destination for Chinese investment

UK top European destination for Chinese investment 

Want China Times 09-Dec-13 

The United Kingdom has become China's top destination for investments in Europe due to its comparatively looser labor regulations and market liberalisation. 

British Prime Minister David Cameron concluded a three-day trip to China on Dec. 4, leading a group of representatives from over 130 UK businesses, with deals signed that reached ￡6 billion (US$9.8 billion). 

Trade ties between China and the United Kingdom have been characterised in recent years by an unprecedented surge in Chinese investments in the latter. 

Before Cameron's trip, Chinese investments in the UK this year have included a total of ￡1.2 billion (US$2 billion) that was injected by Chinese realtors in the development of the Royal Albert Dock, and ￡720 million (US$1.2 billion) that was injected by Chinese conglomerate Dalian Wanda Group to develop a hotel in southwest London. 

China Investment Corp has also spent ￡800 million pounds (US$1.3 billion) in property acquisitions so far this year, while Zhongrong Holdings Group is planning to spend ￡500 million (US$817 million) to restore London's landmark Crystal Palace. Meanwhile, Chinese direct investments in the UK reached ￡8.9 billion (US$14.5 billion) last year alone. 

The UK has been receiving more Chinese investments than any other European country, which was attributed to a freer business environment and more relaxed controls being imposed on businesses. The country boasts a lower corporate tax than other major European economies, levying a 30% tax on companies, while corporate tax rate is expected to drop further to 20% next year. The UK also has fewer labor regulations than its European counterparts, with laborers working an average of 43.1 hours a week, compared with the 41.9 hours in other European Union countries. 

Lu Yubiao, an executive at the Beijing branch of UK professional services firm PricewaterhouseCoopers (PwC), said that real estate and infrastructure have attracted the majority of investments from Chinese entrepreneurs due to the relative stability of the British property and infrastructure markets and because of the returns awarded to investors. 

Chinese investments in the British property market in the first 11 months of this year totaled US$3.8 billion, according to figures from research and consulting firm Real Capital Analytics. The infrastructure arena has also been drawing investment in recent years after the British government unveiled a plan in 2011 to ramp up the improvement of the country's infrastructure to maintain its global competitiveness. 

According to official government figures, the UK has an investment shortfall totaling ￡200 billion (US$326.8 billion) in projects spanning energy, water supply and treatment, public transportation, telecommunications and waste disposal.