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Chinese investment driving growth in UK

The top 30 Chinese companies in the United Kingdom employ more than 5,000 people and have a combined annual turnover of more than 11 billion pounds ($15.4 billion), according to a report by business advisers Grant Thornton LLP.

The Grant Thornton Tou Ying Tracker was developed in partnership with China Daily and identifies the fastest-growing Chinese companies in the UK, as measured by percentage revenue growth, based on the latest published accounts filed on Oct 6, 2017. Tou ying translates to "invest UK".

Simon Bevan, head of the China Britain Services Group at Grant Thornton in London, said that since publishing the first report five years ago, Chinese investment has driven growth and created jobs in many sectors, helping to shape a vibrant economy across the UK.

The enterprises are UK-registered companies, each with an annual turnover of more than 5 million pounds, and have been based in the UK for at least two years. They are also 50 percent or more owned by an entity or individual in the Chinese mainland.

Grant Thornton divides the companies into two groups: State-owned enterprises and private businesses.

The fastest-growing SOE was China National Offshore Oil Corp, which has become the largest oil producer in the British North Sea. Its revenues in the UK increased by 809 percent year-on-year. Other SOEs, such as China Mobile (359 percent) and China National Cereals, Oil and Foodstuffs Corp (249 percent) also achieved triple-digit growth. The average growth of SOEs operating in the UK was 174 percent.

The fastest-growing private company was Anker Technology, which develops chargers and other products. Its turnover grew by 140 percent. Other private companies that showed triple-digit growth included Huawei Global Finance, which achieved a growth rate of 129 percent, and MP & Silva, which owns and distributes television and media rights for major sports events and achieved a growth rate of 110 percent.

The average growth rate for the top 15 private companies was 71 percent.

In the decade to 2016, more than 23 percent of Chinese foreign direct investment in the European Union came to the UK-around 23 billion euros ($28.4 billion) worth.

Investing in the UK gives Chinese investors access to UK brands, technology and management, as well as global connections, the report said. Many Chinese businesses use the knowledge they acquire through their UK investments to develop new and existing businesses, both at home and elsewhere in the world.

SAIC Motor Corp Ltd, which acquired MG Motor UK Ltd in 2007, now carries out final assembly of the MG3 supermini in China, having moved the operation out of the UK in 2016.

The continued growth of Chinese companies in the UK has taken place in spite of major obstacles.

In December 2016, the Chinese authorities tightened regulation on capital outflows.

The UK's decision to leave the EU has created a great deal of uncertainty for both domestic and international businesses. Chinese businesses appear to be taking a bullish view and have taken advantage of the fall in the value of sterling to buy up assets, such as Ctrip's acquisition of the Edinburgh-based travel company Skyscanner.

According to Bevan, the Belt and Road Initiative provides the UK with further opportunities to foster Anglo-Chinese business relations.

"Since its launch in 2013, the Chinese government's Belt and Road Initiative has formed the backdrop for Chinese outbound investment," he said. "The UK's location at the very end of the new Silk Road has helped to bring some of this to the UK."

Hong Kong-based companies, which are not included in this survey, are not subject to the government's financial restrictions and have taken advantage of the cheap pound to buy property in the UK. Acquisitions include the purchase of buildings in London popularly known as the Cheesegrater and the Walkie-Talkie.