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Chancellor fosters confidence among China's investors

By Cecily Liu in London | chinadaily.com.cn | Updated: 2017-03-10 01:48

Britain's optimistic growth projections outlined by Chancellor Philip Hammond on Wednesday gave Chinese investors confidence in future United Kingdom projects, with infrastructure, healthcare, and regional development key sectors worthy of interest, analysts said.

They reacted on Wednesday, after Hammond announced that the British economy had shown "robust growth”as the UK began its exit from the European Union.

Christopher Bovis, a professor of European and international business law at the University of Hull, said the budget's commitment to infrastructure and technology development makes the UK more attractive for Chinese investment, because those are key sectors where China and the UK can achieve great synergy.

"These investments are the ingredients for the resilience of the UK economy post-Brexit," he said.

The chancellor announced more than 500 million pounds ($608 million) for infrastructure, technology and training to "start to close"the productivity gap between Britain and its competitors.

Meanwhile, the UK's reduction of corporation tax to 17 percent by 2020 was also attractive for Chinese investors, Bovis said.

Simon Bevan, head of the China Britain Services Group at accountancy firm Grant Thornton, added that the budget's emphasis on education and healthcare could inspire more Chinese companies to invest in the sectors.

"The budget's emphasis on sectors for government investment, like education and social care, could mean Chinese entrance into those sectors could strategically realize benefits. There may be more opportunities for Chinese companies to invest in those sectors, and bring lessons back to China, which also has a big market for sectors such as social care," said Bevan.

In the social care sector, the government will provide 2 billion pounds of funding between 2017 and 20, to help ensure people receive the social care they need and to reduce pressure on the National Health Service. It will also invest a further 425 million pounds on improving local NHS services and supporting accident-and-emergency improvement.

Despite the rosy picture the UK budget offered, Bevan said it highlights some areas that Chinese companies should be wary of. For example, the UK government's emphasis on raising living standards for British citizens should also be taken into consideration by Chinese companies in their treatment of local employees.

"They should recognize the importance of ensuring employee satisfaction, especially because Brexit means their employees could increasingly be UK local employees, who are increasingly aware of their rights," said Bevan.

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