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Strong growth for top Chinese investments in UK
2017-03-16
Brief:Revenues at China’s top-performing businesses in Britain soar 174% on average.
 
Star performers: London's tallest tower is set to be sold to China’s CC Land and West Bromwich Albion was ought by Chinese businessman GuochuanLai in 2016 © FT Montage/Getty Image
 
Chinese holdings in the UK have seen revenues soar in the past two years, deflecting concerns that the “golden era” of China investing inBritain may be drawing to a close.
 
Despite a slowdown in outward investment from China to the UK — partly stemming from concerns over Brexit figures show that Chinese-owned companies in Britain have enjoyed  triple-digit growth, according to research by Grant Thornton, a UK-based professional services firm.
 
The best-performing 30 companies — which had a combined turnover of£9.8bn and employ about 20,000 people in the UK — expanded revenues by an average 174 per cent in 2015 against the previous year, according to the Grant Thornton data. Among these, privately-owned Chinese companies outperformed their state-owned counterparts, reporting a 210 per cent increase in revenues against 146 per cent.
 
The study marks the first time that revenues for a representative sample of Chinese-owned companies in the UK have been published.  A total of 280 ­Chinese-owned companies with revenues in excess of £5m are registered in the UK but only 153 of these had reported earnings for at least two consecutive years by October last year.
 
The 153 Chinese-owned companies, in sectors ranging from real estate to retail, reported revenue increases on average of 20 per cent against the previous year, according to rant Thornton.
 
Simon Bevan, head of China Britain services at Grant Thornton, said the 20 per cent rise was a particularly “positive performance” when set against British economic growth. Gross domestic product growth in the UK in 2015, the most recent full year for the company reports, was 2.2 percent.
 
"You in the UK see Brexit as huge but back home in China, we see this as a ‘first-world problem’" Denise Li, chief executive of PGC Capital.
 
The UK has become a favoured destination for acquisitions by Chinese companies, with a visit in late 2015 by Xi Jinping, China’s president, leading to official claims that the UK-China relationship had entered a“golden era”.
 
Despite prominent deals, such as this month’s purchase of London’s “Cheesegrater” skyscraper by China’s CC Land for more than £1bn, Beijing’s move to tighten capital controls has taken its toll. Data compiled by Grisons Peak, a UK investment bank, show the total value of overseas deals announced by Chinese companies fell from $32bn last October to $6bn this February.
 
The most-favoured sector for Chinese acquisitions in the UK is property, accounting for 44 per cent of the value of deals announced between 2012 and the end of the first half of 2016.
 
That is followed by 28 per cent for the consumer sector, 8 per cent for financial services, 7 per cent in oil and gas and 5 per cent in healthcare, according to Grisons Peak.

FT
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