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The British government’s decision to seize control of British steel from Chinese owner Jingye has brought a greater scrutiny of China’s investment in the country.
But it will be difficult for Beijing and Chinese companies to spend decades in the UK economy since 2000: More than $100 billion has flowed into the country, according to data from research clothing.
According to the American Corporate Academy think tank, about one-third of China’s spending on large UK projects has been in the energy, technology and transportation sectors.
Labour’s high-level figures have raised concerns about important areas including nuclear power, telecommunications and transportation, saying Chinese ownership could endanger the UK’s economic security and undermine supply chains.
Energy alone has accounted for almost one-fifth of China’s major investment since 2005, reflecting a wide range of projects from wind farms off the Scottish coast to natural gas networks in Wales and Northern Ireland.
Derek Scissors, a senior researcher at AEI, said the “scale and expertise” of state-owned enterprises makes them attractive partners for large-scale energy and transportation projects such as nuclear power plants.
He added: “The frightening drawback is the role of the Chinese state in important national infrastructure.”
Leading state investors include China Investment Corporation (China Investment Corporation), which owns 8.7% of the Thames River water and 10% of Heathrow Airport – China General Nuclear (CGN), which owns a minority stake in the Hinkley Point C plant in Somerset.
CGN also plans to work with French energy company EDF on a new nuclear power plant in Bradwell, Essex, but officials Recommended this week The government will stop its investment under increasing pressure to reduce Beijing’s influence.
Although state-owned enterprises concentrate investment in energy and infrastructure, private investors focus on real estate and strategic manufacturing industries such as semiconductors, steel and transportation.
Geely, which owns Volvo Cars, acquired black taxi maker LeVC and owns sports car brand Lotus, both of which have British factories.
Both state-owned and private companies have cut funding in recent years, with China’s FDI accounting for only 3% of its 2017 peak last year.
The decline reflects a “less welcome” attitude, with Beijing’s tightening of capital controls and private investors also blocking private investors due to poor performance of property assets, scissors said.
He added: “Chinese private investors sent a lot of money to the country in 2015-16, and the easiest way to do this was to buy real estate. Many of the purchases fell at the time.”
The UK is not alone to see a sharp decline in Chinese funding, with AEI data showing investment in major projects in the United States falling by 97%, and between the mid-2010s and 2023, investment in Europe fell by 97%.
Armand Meyer, senior research analyst at Rhodium Group, said the UK regulator “has been more scrutinized” and has helped reduce investment in recent years.
But he added that the UK has been one of the main destinations for Chinese funds over the past two decades, with state-owned companies accounting for “especially high” of funds.
“UK historically attracted more infrastructure investment from China due to its open attitude to foreign ownership of the strategic sector,” he said.
“One of the major challenges for the UK and other OECD countries is the acquisition legacy completed before the acquisition of the investment screening regime.”
