David Cameron has announced a deal between French energy company EDF and China General Nuclear Power Corporation to build the UK’s first nuclear power plant in decades at Hinkley Point in Somerset.
The state-owned Chinese company will fund £6 billion, or one-third of the costs of the nuclear plant, which EDF has said will cost £18 billion.
Hinkley is just one of many projects that David Cameron is presenting to the Chinese president Xi Jinping as a potential area of investment during his London visit. It represents a small fraction of the £30 billion-worth of transport, energy and property deals up for grabs. That means China could double the £29.5 billion it has invested in the UK since 2005.
China is a already a huge investor in international energy and property among other industries and its interest in assets overseas is growing. Chinese overseas investments have grown from £20 billion in 2005 to $171 billion last year. So far, the UK has only been a minor partner.
Interest in the UK has increased in fits and starts since 2005, but it is expected to increase rapidly if the Chancellor George Osborne signs off on just some of the projects up for grabs.
Chinese companies already own a controlling stake of Weetabix, House of Fraser and Sunseeker yachts. Pizza Express is 100 per cent owned by a Chinese company.
China’s largest single UK investment is a $3 billion slice of Barclays. Given the size of the bank, this only buys a 3 per cent share.
The deal at Hinkley would boost Chinese investment in the UK energy sector, which already accounts for half of China's interest in the UK.
But property is by far China’s biggest interest. Mr Osborne has billions of pounds in property deals prepared for the Chinese in his deal book, including a New Chinatown in Liverpool and a new retail quarter in Sheffield. There’s also a Science Centre comprising houses and shops for sale in Newcastle that is described as a “living laboratory” where “solutions” to cities can be tested and commercialised.
Join our new commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies