Creative juices flow with the Thames

London's magnetic attraction for Chinese investment

Companies in the creative industries are leading the charge as Chinese investment floods into London.

Over the past four financial years, 105 Chinese companies have invested in the city, and 20 percent of those are in the creative industry, says London & Partners, the city's official promotional organization.

China's leading mobile gaming company, Rekoo, opened a London office last year with a view to market its games to Europeans and bring games from European game developers to China.

Rekoo, which is well-known for games such as Finding Something and Sunshine Winery, already had a presence in international markets including the United States and Japan and aims to invest heavily to increase its market share in Europe.

Rekoo's UK office is in Tech City, an area in central and east London where many technology companies have gathered, including Cisco, Facebook, Google and Intel.

Since Tech City was opened in 2010, the number of digital companies in east London has grown from 200 to more than 1,600, says Jeff Cao, head of Asia Pacific at London & Partners.

Pan Jinyu, vice-president of Rekoo, says the company chose Tech City because the area has a liberal atmosphere, which facilitates easy communication between different companies.

London & Partners estimates that the 105 Chinese companies that set up shop in the city in the past four years have created 3,052 jobs.

In the 2013-14 financial year, the organization helped 24 companies from China set up shop in London; it helped 22 the year before.

Gordon Innes, CEO of London & Partners, says: "London has seen a wave of investment from China in the last year, and the city is clearly an attractive and welcoming destination for Chinese companies as they seek to expand worldwide."

The Chinese companies include major real estate firms such as ABP, which is developing the 1 billion pound Royal Albert Dock project, and Dalian Wanda Group Corp Ltd, one of China's largest and most ambitious conglomerates.

Dalian Wanda closed two deals in June last year, investing 700 million pounds ($1.2 billion; 858 million euros) to build a five-star hotel by the River Thames and buying a 92 percent share of Sunseeker Yachts for 320 million pounds.

"We are extremely excited to be operating in London," says Lizhou Zhang, general manager of Dalian Wanda UK. "The city is one of the main business and financial hubs in the world, and it is the perfect place for us to be in order to develop our major new project, all the while reaching new markets and helping us to achieve our international ambitions."

Cao says: "As the number of Chinese companies going global continues to rise, London appears to be well and truly open to Chinese investment. London provides the best financial and professional services, which makes it easier for them to grow and expand their businesses, even branch out into other markets like Europe, Africa and the Middle East."

London has many outstanding attributes that are recognized worldwide, Innes says, including "a deep pool of talent, superb access to markets and financial backing, and a well-earned reputation for innovation and creativity".

Investment by new Chinese companies will create 1,138 new jobs after they have been in London for three years, London & Partners says.

Innes says he is proud that London & Partners has been able to showcase its strengths to China, not only helping many Chinese companies to come to the city and develop there, but also creating jobs and economic growth that will benefit not only London but the country.

Zhou Xiaoming, minister counselor of the Chinese embassy in London, says the Sino-UK business relationship has promoted the growth of Chinese companies and helped them go global. It has also boosted growth and employment and helped the British economic recovery.

China and the UK are complementary economies, Zhou says.

"Britain has abundant experience in the service and creative industries and technical innovation, while China, as an emerging market, offers capital and a large potential market."

The fast growth of Chinese companies in London also highlights the huge potential of the Sino-UK business relationship.

Chinese investment in London has huge potential, Cao says, adding that over the next two or three years, new investment from China will surpass that from the US, source of the most foreign investment in London for many years.

From the US, 54 companies set up operations in London last financial year, compared with 49 in 2012-13, 32 of those being technology firms, including well-known names such as LinkedIn.

"Besides China, companies from other Asia-Pacific countries such as Australia, India, Japan and South Korea have also set up branches and are investing in London," Cao says.

Asian firms pledged about 3 billion pounds toward major regeneration projects in London in 2013-14, Cao says.

Across the world, London & Partners helped 260 international companies establish their businesses in London, 16 percent more than it helped the previous year.

zhangchunyan@chinadaily.com.cn

(China Daily European Weekly 05/16/2014 page19)