Great expectations for secure trade between China and UK
The booth of Tencent is seen at ChinaJoy, a digital entertainment expo, held in Shanghai last year. CHEN YUYU/FOR CHINA DAILY
Despite leaving the European Union, the United Kingdom remains a key area for investment
Businesses from China and the United Kingdom can be confident about the prospects for bilateral economic cooperation, according to a report released by multiple parties.
Both countries will be focused on domestic policies, such as common prosperity and the dual circulation development pattern in China and the British government's "leveling up"－a plan to transform the UK by spreading opportunity and prosperity to all parts－in the coming years. But they also intend to look outward, said a study released by accountancy firm Grant Thornton in collaboration with China Daily UK and the China Chamber of Commerce in the UK, or CCCUK, in late February.
The study identified 845 Chinese companies operating businesses in sectors including consumer goods, education, financial services, private healthcare, media, manufacturing, real estate and construction in the UK. They had a combined revenue of 63 billion pounds ($83.27 billion) in 2021.
Together, these Chinese companies had created or supported 60,945 jobs across the UK. Almost 30 percent of the employees work in northwestern England and 20 percent work in London, although that city accounts for 80 percent of aggregate revenue, said Simon Bevan, head of China-Britain services group at Grant Thornton.
He said the other half work in other regions of the UK, including the east of England, West Midlands, Scotland, Northern Ireland and Wales.
Manufacturing and industrial companies contributed 80.3 percent of the combined revenue last year, showing that Chinese investors are active across a wide swathe of the UK economy.
Chinese companies adopted merger and acquisition measures to come to the UK for the first time or to bolster existing operations in 2021. Important M&A deals during the year included Tencent Holdings' 919-million-pound takeover of Sumo Group, Wuxi AppTec's purchase of Oxford Genetics for 96.7 million pounds and Pharmaron Beijing's acquisition from AbbVie of Allergan Biologics for an estimated 85.3 million pounds.
Shenzhen-headquartered Tencent also participated in an investor group involved in the second-largest transaction of the year. It saw CMR Surgical, a Cambridge-based robotic keyhole surgery machine developer, raise $600 million in a series D funding round.
The UK will remain a key place where Chinese companies are willing to invest, whether as first-timers or with established operations in the country, said the report. It noted that given its new status since leaving the European Union, the style of Chinese investment in the UK may change. This is because companies will want to make sure they retain a foothold in the EU, but the UK will form an important part of their European strategy.
Experts said that after Brexit, the UK government's global strategy will offer opportunities for better cooperation with countries beyond Europe. The UK set out its case for joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in June 2021.
"The Regional Comprehensive Economic Partnership, or the RCEP, which China is a part of, is the other important trading bloc in the region and their overlapping memberships open up new markets for the UK," said Zhang Jianping, director-general of the Beijing-based China Center for Regional Economic Cooperation.
The RCEP has been in effect in most of its 15 member countries－the 10 members of the Association of Southeast Asian Nations plus Australia, China, Japan, the Republic of Korea and New Zealand－since the beginning of this year.
As the pact is to gradually cut tariffs to 0 percent on a range of goods over the coming years, British exporters will have the opportunity to build a strategy for this free trade zone, just as the UK was formerly the focus for Chinese companies' strategy in the EU, said Zhao Ping, vice-dean of the Academy of China Council for the Promotion of International Trade.