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• Mon Apr 14 2025

How much vital UK infrastructure does China own?

15 hours ago Share Save Ben Chu & Lucy Gilder BBC Verify Share Save

Reuters

The fate of the Scunthorpe steel works has shone a fresh spotlight on Chinese investment in the UK economy with critics raising questions over potential security risks. The British Steel plant had been owned by China's Jingye Steel. But the UK government has now taken control of the Scunthorpe site, amid claims the Chinese owners were planning to permanently decommission its two blast furnaces and use its rolling mills to process imported Chinese-made metal instead. BBC Verify looks at what we know about the extent of Chinese investment in the UK economy - and how much of a concern it should be.

How much Chinese investment is there in the UK in total?

Data from the Office for National Statistics suggests total Chinese investment in the UK in 2023 amounted to about ?4.3bn - a small fraction of the total ?2 trillion of overseas investment in the British economy in that year. However, this is likely to be a considerable underrepresentation of the true scale of Chinese investment in the UK because the official data only includes the immediate investing country, not the ultimate source of the money - and because of a lack of transparency from Beijing when it comes to overseas ownership stakes. Independent estimates from the American Enterprise Institute think tank, using corporate reports, suggest total public and private Chinese investment in the UK between 2005 and 2024 added up to $105bn, or ?82bn. This would have made Britain the third largest national destination of Chinese investment over this period, after only the US and Australia.

What have Chinese firms invested in?

There is a wide range of Chinese investment in the UK, ranging from critical energy and transport infrastructure, to stakes in private companies and football clubs. Significant Chinese investments in UK infrastructure include a 10% stake in London's Heathrow airport by the China Investment Corporation, a sovereign wealth fund wholly owned by the Chinese state. The Hong Kong-based industrialist Li Ka-shing's investment group owns UK Power Networks, which operates electricity distribution infrastructure across London, the South East of England and the East of England. The billionaire's group also owns a 76% stake in Northumbrian Water Group, which provides water supply and sewerage in the north east of England.

There is also a large Chinese investment in the Hinkley Point C nuclear power station in Somerset. China General Nuclear Power Group originally had a 33.5% stake, with the rest owned by the French company EDF. But EDF reports that the Chinese company has stopped contributing additional financing to the joint project - which has been running over budget - and, as a result the Chinese stake at the end of last year had declined to 27.4%. The same Chinese company has an even larger stake - 66.5% - in the proposed Bradwell B nuclear site in Essex, according to the project website. EDF owns the rest.

China General Nuclear Power Group (CGN) recently halted its funding of the Hinkley Point C nuclear site, although it still has stakes in the project.

There is also Chinese investment in other sectors of the UK economy, such as transport. The Hangzhou-based Chinese car company, Geely Auto, owns the Coventry-headquartered London EV Company, which manufactures electric black taxis. Chinese firms have some investment in consumer brands too. Li Ka-shing's group owns the Suffolk-headquartered pub chain and brewery Greene King. Wolverhampton Wanderers Football Club is owned by the Shanghai-based conglomerate Fosun. While Jingye steel had total control of the Scunthorpe steel plant, it's important to bear in mind that Chinese investors do not always have majority stakes in UK businesses, which would interfere with their ability to determine those companies' operational decisions. Some of these organisations such as airports and water utilities are also tightly regulated, potentially limiting the freedom of manoeuvre of their Chinese owners in controlling the assets. Chinese investors are also estimated to have considerable holdings of UK land and buildings. The Leadenhall Building, known as the "cheesegrater", in the City of London was acquired by a Chinese property investor for ?1.15bn in 2017.

How much of a threat could these investments pose?

The potential danger posed by Chinese investment in UK infrastructure has been extensively debated in recent years - and a particular flashpoint was the involvement of the Shenzhen-based Chinese technology company Huawei in building the UK's 5G communications infrastructure. Huawei was founded by Ren Zhengfei, a former Chinese army officer, in 1987. The UK's National Cyber Security Centre initially judged in 2019 that any risk posed by Huawei was manageable. But the UK, nevertheless, required the Chinese company to begin pulling out of the UK's telecoms infrastructure in 2020, after coming under pressure from the US government during Donald Trump's first term as President. The involvement of Huawei in UK networks was also opposed by a number of MPs.

Getty Images Huawei began to be removed from the UK's telecoms infrastructure in 2020.