Chinese investment wave heads for UK infrastructure

New arrivals at Heathrow Airport... Photo: Alice Photos Shutterstock
New arrivals at Heathrow Airport... Photo: Alice Photos Shutterstock

Employment prospects for UK construction professionals have been given a huge boost by a report that says China will invest £105Bn in UK infrastructure over the next ten years.

 

Energy, transport and property will be the most attractive targets for the Chinese investment, says a report from the Centre for Business and Economic Research and law firm Pinsent Masons. A spokesman said the investments will represent a 'game changer' for UK infrastructure funding with the Chinese more willing to shoulder construction risk than other international infrastructure investors.

 

Chinese investors have already invested over £11Bn in the UK, and hold a 10% stake in Thames Water and 10% in Heathrow Airport. China Nuclear Power Corp has already said it wants a stake in the EDF nuclear power station to be built at Hinkley Point.

 

The scale of Chinese ambition can be seen in news today of their attempt to buy London's HSBC tower, one of the UK's biggest ever property deals at over £1Bn, but which they were outbid on by the Qatar Investment Authority.

 

A Pinsent Masons spokesman said the investment seen so far was the beginning of a major trend and a trickle of Chinese investment would turn into a 'wave' over the coming decade.

 

Chinese investment companies are thought likely to form partnerships with UK construction companies rather than try to overcome the difficulties of using their own engineering and other construction staff. Precedents include Carillion working in partnership with Beijing Construction Engineering Group on the £800M Manchester Airport project. 

 

Other international investors like Canadian and Asian pension funds are also keen on making UK investments but there are few 'shovel ready' projects for them to invest in and their appetite for construction risk is not thought to be high.

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