Ben Chu and Lucy Gilder
BBC Check
Reuters
The fate of the work of Steel Scunthorpe highlighted new projectors on Chinese investment in the British economy, criticism raising questions about potential security risks.
The British steel plant belonged to Jingye Steel de China.
However, the British government has now taken control of the Scunthorpe site, in the midst of the affirmations that the Chinese owners planned to constantly publish its two stoves and to use its rolls to treat imported Chinese manufacturing metals.
The BBC Verify examines what we know about the extent of Chinese investments in the British economy – and the quantity of concern.
How many Chinese investments are there in the UK in total?
Office for the Office for National Statistics suggest that total Chinese investments in the United Kingdom in 2023 amounted to approximately 4.3 billion pounds Sterling-a small fraction of the total of 2 billion pounds of investment in the British economy that year.
However, this is probably a considerable sub-statement of the real Chinese investment scale in the United Kingdom, because official data only includes the country of immediate investment, and not the ultimate source of money-and due to a lack of transparency in Beijing with regard to property stakes abroad.
The independent estimates of the American Enterprise Institute Think Tank, using corporate reports, suggest that Chinese public and private investments in the United Kingdom between 2005 and 2024 increased up to $ 105 billion, or 82 billion pounds sterling.
This would have made Great Britain the third national destination for Chinese investments during this period, after only the United States and Australia.
What did Chinese companies invested in?
There is a wide range of Chinese investments in the United Kingdom, ranging from energy infrastructure and critical transport to challenges in private companies and football clubs.
Significant Chinese investments in British infrastructure include 10% stake in London Heathrow airport by China Investment Corporation, a sovereign fund owned by the Chinese state.
The Hong Kong industrial group, Li Ka-Shens, has UK Power Networks, which operates electricity distribution infrastructure across London, south-east of England and east of England.
The billionaire’s group also has 76% stake in Northumbrian Water Group, which provides water supply and sewers in northeast England.
There is also a large Chinese investment in the Hinkley Point C nuclear power plant in Somerset.
China General Nuclear Power Group was originally a participation of 33.5%, the others belonging to the French company EDF.
But EDF reports that the Chinese company has ceased to contribute to additional financing to the joint project – which traveled the budget – and, therefore, Chinese participation at the end of last year had decreased to 27.4%.
The same Chinese company has an even greater participation – 66.5% – in the Bradwell B nuclear site offered in Essex, according to the project website. EDF has the rest.
China General Nuclear Power Group (CGN) recently interrupted its funding from the Hinkley Point C nuclear site, although it still has participations in the project.
There are also Chinese investments in other sectors of the British economy, such as transport.
The Chinese car company based in Hangzhou, Geely Auto, has the company London EV de Coventry, including Cventry, which manufactures electric black taxis.
Chinese companies also have investments in consumer brands.
The Li Ka-Shing group owns the pub chain and the Suffolk Greene King pubs.
Wolverhampton Wanderers Football Club belongs to the conglomerate based in Shanghai Fosun.
Although Jingye Steel has a total control of the SCUTHORPE steel factory, it is important to keep in mind that Chinese investors do not always have majority in British companies, which would interfere with their ability to determine the operational decisions of these companies.
Some of these organizations such as airports and water services are also closely regulated, which potentially limits the freedom of maneuver of their Chinese owners in the control of assets.
It is also estimated that Chinese investors have considerable assets of British land and buildings.
The Leadenhall building, known as “Cheesegrater”, in the city of London, was acquired by a Chinese real estate investor for 1.15 billion pounds sterling in 2017.
What is the threat of these investments?
The potential danger posed by Chinese investments in British infrastructure has been widely debated in recent years – and a particular flash point has been the involvement of the Chinese technology company based in Shenzhen, Huawei, in the construction of the 5G communication infrastructure of the United Kingdom.
Huawei was founded by Ren Zhengfei, former Chinese army officer in 1987.
The National Cyber Security Center of the United Kingdom initially judged in 2019 that any risk posed by Huawei was manageable.
But the United Kingdom, however, forced Chinese society to withdraw from the United Kingdom’s telecommunications infrastructure in 2020, after being under pressure from the United States government during Donald Trump’s first term as president.
Huawei’s involvement in British networks has also been opposed to a number of deputies.
Getty images
Huawei began to be withdrawn from the British telecommunications infrastructure in 2020.
Grace Theodoulou, a Policy Policy on China at the Geostrategy Council, says that there are two main potential threats to consider for Chinese investment in critical infrastructure in the United Kingdom.
“The first is the spy potential – for example, having audiovisual Chinese manufacturing equipment installed in buildings or government devices.
“The second is that the infrastructure can be controlled by the manufacturer and, as such, could be disrupted for a geopolitical lever effect,” she said.
Some analysts argue that Chinese law – which obliges all Chinese companies to align themselves closely with the directives of the Chinese Communist Party and to help national intelligence efforts – represents a security risk inherent in all Chinese investments in Western infrastructure.
“A probable scenario where it could be in the interests of China (harming British infrastructure) would be to prevent the ability of Great Britain from imposing sanctions against Beijing in the event of Chinese invasion of Taiwan.
“If China was to invade Taiwan and if they had control over certain parts of our critical infrastructure, this would be strongly impacting the potential to apply sanctions or similar measures,” said Theodoulou.
However, other analysts are skeptical of knowing whether it would be in the financial interest of Chinese investors to sabotage British infrastructure or businesses, as such actions would collapse the value of their investments and would probably lead to their creation by the British government.
“This threat is affirmed and not proven, and these companies are focused on profit, so it is not in their interest to sabotage our infrastructure,” said Professor Giles Mohan of the open university.
And they argue that a distinction should be established between Chinese investments in vital infrastructure and investments in British companies that have consumption marks where the public damage potential is considerably lower.
