Chinese firms accelerating expansion into UK

Tou Ying tracker shows private companies are making a bigger contribution to overall investment

Chinese firms are accelerating their of expansion into the UK, according to results of the Tou Ying 2015 Top 25 tracker, which were released at an awards dinner in London on Jan 14.

The tracker, in its third year, showed that total revenue for the 25 fastest-growing Chinese companies in the United Kingdom in 2014 reached 35 billion pounds ($49.9 billion; 45.8 billion euros), up from 25 billion pounds in 2013 and 17 billion pounds in 2012.

Together, the companies employ more than 2,500 people.

Their growth points to the vibrant and flourishing UK-China trade and investment relationship, which received a boost from President Xi Jinping's state visit to the UK in October, during which deals worth around 40 billion pounds were signed.

The tracker, compiled by accountants Grant Thornton in collaboration with China Daily, showed that the growth of the top 25 companies in 2014 was 44 percent, up from the previous year's 38 percent. In comparison, the UK's economy grew 2.6 percent in 2014, the fastest pace since 2007.

Jin Xu, minister counselor of the economic and commercial office of the Chinese embassy in London, says the UK is the country of choice for Chinese investment.

"Chinese companies are expanding into the UK with a focus on localization and sustainable long-term development. They have achieved tremendous results, fulfill their social responsibility, contribute to the UK's economic growth and create employment."

Jin says four major trends of Chinese investment into the UK in 2015 were infrastructure investment, high-technology manufacturing and research and development investment, financial services investment and property investments.

The potential for bilateral cooperation in R&D, services industries and infrastructure are immense, Jin says, as the UK has unique expertise that can help China achieve the necessary structural shift to achieve sustainable growth and internationalization.

Simon Bevan, partner and head of Grant Thornton's China-Britain services group, says the latest tracker analysis shows private Chinese companies are making an increasingly bigger contribution to overall investment. In addition, China's growing consumption market is leading an increasing amount of emerging Chinese investment in the UK in the retail, leisure and entertainment industries.

"The country's booming technology sector, especially in mobile communications and social media, is becoming a hotbed of innovation, rather than a producer of copycat Western goods and services. Increased investment in tourism and leisure reflects a boom in Chinese overseas travel," Bevan says.

The tracker's data also demonstrated that a larger number of Chinese firms are expanding into the UK by acquisition compared with previous years. Their geographical location also show increasing diversity, as a result of growing familiarity with the UK market.

Key sectors represented by the tracker's top-ranking companies are technology, media and telecommunications, financial services, retail, and energy. Notable names on the list are Sinochem, Petrochina, Bank of Communications, Agricultural Bank of China, China Taiping Insurance, China Telecom, China Unicom, ZTE, Hisense and Lenovo.

The latest version of the tracker monitored revenue growth of companies from December 2013 to December 2014. In Chinese, touying means "investing in the UK".

cecily.liu@mail.chinadailyuk.com

(China Daily European Weekly 01/22/2016 page26)