UK sees huge potential for investment by China
There is massive potential to increase Chinese investment in Britain, the head of Britain's trade promotion agency said on Friday after Prime Minister David Cameron led a high-powered British business mission to China. Andrew Cahn, chief executive of UK Trade & Investment, also voiced concern in an interview with Reuters about the potential impact on British trade of the economic crisis in Ireland, a major market for Britain and a big investment partner.
Copyright Reuters, 2010
A $1.2 billion China Eastern Airlines order for Rolls-Royce engines was the highlight of a string of business deals agreed during this week's trip to China by Cameron, senior ministers and more than 40 business leaders. Cameron, who heads a six-month-old coalition government, has made increasing trade with emerging markets a priority, aiming to boost Britain's economic recovery at a time when public spending cuts are likely to depress demand at home. He set a goal of doubling two-way trade with China to more than $100 billion a year by 2015. Britain's trade with China is dwarfed by that of European powerhouse Germany.
In meetings with Chinese politicians and business leaders, Cameron was "particularly focused on getting more Chinese inward investment into Britain," said Cahn, whose agency helps British firms to export and overseas firms to invest in Britain. "The pitch the prime minister made was that London should be their springboard into Europe," Cahn said a day after returning from China where he was part of Cameron's delegation. Some 400 Chinese firms operate in Britain, although Cahn acknowledged inward investment from China, at just 27 million pounds ($43.3 million) in 2009, was small.
"But the potential is massive," he said. Britain wanted to persuade China's $300 billion sovereign wealth fund, China Investment Corp, to invest in Britain and it was important that Chinese companies listed on the London Stock Exchange, he said. "If they are going to raise capital outside of Asia, we want them to raise it in London," he said. Asked about potential impact on British trade from Ireland's debt crisis, Cahn acknowledged it was a concern. "Ireland is going through trials and tribulations. That is going to impact upon us - all the more important for us to focus on emerging markets, which are growing rapidly," he said. Cahn said the only way British firms could acquire a substantial share of the Chinese market was by working with Chinese partners.