UK firms eye opportunities in wake of Xi's speech

UK-based Imagination Technologies' shareholders have approved the company being taken over by Chinese-backed Canyon Bridge investment fund.

The $730 million acquisition of the chip-designer is the latest in a series of recent high-profile Chinese investments in the United Kingdom.

Other examples of big purchases include the acquisitions of London skyscrapers 20 Fenchurch Street－nicknamed the Walkie-Talkie－and The Leadenhall Building－which is known as the Cheesegrater -for $1.7 billion and $1.57 billion respectively.

The Chinese embassy in London estimates that Chinese nonfinancial investment in the UK last year amounted to $18 billion, while the Confederation of British Industry values British direct investment in China at$5.24 billion.

Critics have suggested Beijing made it difficult for foreign companies to invest in China in the past, but at the 19th National Congress of the Communist Party of China, President Xi Jinping proposed a series of measures to increase opportunities for foreign investment in China.

British companies and organizations are gearing up to strengthen investment and trade links, especially in areas highlighted as the country's development focus and direction in Xi's report to the congress.

In particular, British businesses in sectors including financial services, city planning, medical and life science, research and development, and high technology have voiced a confidence to grow in China, leveraging on British strength, to help China develop the "modernized economy" outlined in Xi's vision.

In his report, Xi outlined China's commitment to continued supply-side structural reform, and urged the country to increase efforts to promote better quality, higher efficiency, and more robust drivers of economic growth.

Xi also called for boosted factory productivity and accelerating the building of an industrial system that promotes coordinated development of the real economy, with technological innovation, modern finance, and human resources, and set out clear modernization targets by 2020 and 2035.

"This is, of course, a welcome continuation of support for the reforms introduced in the 13th Five-Year Plan (2016-20) and the role of technology innovation in driving continued economic growth," said Chris Rudd, provost of The University of Nottingham Ningbo China.

Rudd said British universities see immense opportunities to further strengthen R&D partnerships with Chinese companies, helping them move up the value chain and become more innovative while helping China cultivate a strong talent pool as the economy modernizes.

British pharmaceutical and life science companies are also eyeing China's huge healthcare market. The provision of equitable and widespread healthcare facilities was another area highlighted in Xi's speech.

"Britain's healthcare policy, healthcare system, and digital healthcare technology can all be shared with China to ensure more equitable and widespread provision," said Luke Zhou, UK representative of China's largest life science incubator, China Medical City, which is helping several British pharmaceutical and medical device companies establish subsidiaries in China.

China's commitment to combat pollution, and create more ecological and friendly living spaces for its citizens also encouraged Britain's urban planning and architecture companies.

"There is space for British architecture design companies to do more in China, in urban design, smart cities, and landscape architecture," said Yang Wei, the founder of a London fi rm of architects.

Green urban planning and low-carbon building techniques are seen as important solutions in reducing urban pollution and carbon emissions. It is estimated that the built environment is responsible for around 30 percent of China's carbon emissions, Yang said.

In the financial services sector, Xi highlighted China's commitment to continue to open its markets to foreign companies, deepen China's reforms of its financial systems, introduce more market mechanisms in the setting of exchange and interest rates, and improve financial-risk control mechanisms.

Yu Zongwen, CEO of the London-based advisory Shanghai-London Connect Limited, said China's commitment to broaden international financial collaboration is very encouraging news to London's financial services industry and to companies involved in capital markets, asset management, insurance and pensions, banking, green finance, and financial technology.

"While Brexit creates some uncertainty, it may also allow a deeper and closer economic relationship between China and the UK, without the restrictions of the European Union and especially since the UK has been one of the leading supporters of granting China market economy status," Yu said.

In addition, many of Britain's professional services companies were excited by what Xi said about China's commitment to growing trade, investment and infrastructure links as part of the Belt and Road Initiative and are looking to become involved.

"President Xi's comments reaffirming commitments to the project and global collaboration are hugely encouraging," said Harry Theochari, global head of transport at the UK law firm Norton Rose Fulbright. "We are working hard to leverage the skill-sets of our experts in all major markets to facilitate and connect investors and other businesses with viable and bankable projects."