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People's Daily Online>>China Business

UK opens arms for Chinese deals

By Zhang Haizhou, Cecily Liu and Li Xiang  (China Daily)

08:17, December 06, 2011

LONDON / BEIJING - The United Kingdom is welcoming Chinese investment in its infrastructure sector.

"I believe Chinese companies are capable of getting involved in these opportunities," Susan Haird, deputy chief executive of UK Trade and Investment, told China Daily.

"Infrastructure investments themselves are very stable and the UK government will guarantee transparency," Haird said.

The UK government plans to invest 200 billion pounds ($312 billion) to develop the country's infrastructure in the next five years.

Hopes of persuading the private sector and foreign investors to help rebuild Britain's aging infrastructure have received encouraging signs from China Investment Corporation, China's sovereign wealth fund.

Lou Jiwei, chairman of the fund, said in a recent article in the Financial Times that his fund "is keen to team up with fund managers or participate through a public-private partnership in the UK infrastructure sector as an equity investor".

"Traditionally, Chinese involvement in overseas infrastructure projects has just been as contractors. Now Chinese investors also see a need to invest in, develop and operate projects," he wrote.

Richard Wellings of the London-based think tank Institute of Economic Affairs said UK infrastructure projects may generate good financial return for Chinese investors, but cautioned that significant policy risks exist.

"Profitability is subject to government policies, which could change a lot quicker than an infrastructural project can finish. The UK government currently gives yearly subsidies of 5.2 billion pounds to our rail system, which is out of the control of rail investors," Wellings said.

A buyout by Transport for London of private contractor Tramtrack Croydon is one example.

Tramtrack Croydon won a 99-year contract to build and maintain a tramway system in South London in 1996. But subsequent fares and ticketing policy changes forced Transport for London to pay Tramtrack Croydon yearly compensation of 4 million pounds under the terms of the contract. Transport for London bought back the project for 98 million pounds to avoid these payments.

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ASEAN at 2011-12-06220.255.1.*
It is very interesting to read that UK welcomes Chinese investments. Just a few months back, UK Prime Minister David Cameron had warned African countries of the "Chinese Invasion in Africa ". So the UK is a country of great hypocrisy. When the Chinese invests in UK and in the process create jobs for the British, it is not considered an invasion. But when the Chinese companies invested in African countries and create jobs for the Africans, it is considered a "Chinese Invasion".What a joke. By the way, Chinese should not invest too much there as the British are well know to change its rules and regulation to its benefit. Chinese companies should not be a suckers ! Chinese companies should invest more in third world countries such as Indonesia, South America countries and of course African countries. China’s rise should benefits poor countries in the world. Many poor people in poor countries are looking forward to China’s investments. Use your investment to benefits them.
elee at 2011-12-06183.39.42.*
UK can be a sound place to invest rather than too much being asked to help EU and USA. However, the political common sense of UK & Her Majesty must prevail independently away from NATO"s destructive demands. EU consists of very high risk components due to 2 scores of european nations in it whilst USA is getting too "politically & militarily funny" with the rest of the weaker worlds other than against China with cold war mentality. UK needs China"s investments and efforts to rebuild its own glory after too many easy historical years and since UK understands China better than the rest of the western worlds through past conflicts and occupations of the latter. China also needs a steady & sound pay master for its good money invested and developed. Why spend on very high risk exposures in EU & USA, and the latter with war drums beating along the corridors of China? Irrespective of the opportunities in UK, China ought to revaluate the risks of vengeful attacks on UK’s infrastructures since UK had participated most actively in the revolts of the Mid_Eastern revolutions and subsequent attacks on African Libya, mercilessly.
helen at 2011-12-06203.82.80.*
Time to invest in UK, EU and other developing countries. Not much leverage and prudence in continuing to "Ride the Weimar US$" and be lured into US entrapment.Other than high tech investments in the United States which their Congress and Unions will inevitably put up deliberate barriers, there are really not many areas there to invest. It is a mere waste of time to explore the US markets given their racist mentality and superiority complex. And given also the US ongoing agenda to contain China economically, militarily .....

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