With a population of nearly 1.4 billion, an economy worth $10.5 trillion, and where a city with the population of the whole of North East England (2.6 million) would be considered extremely modest, the mind boggles at the sheer scale of China.
People keep asking me about the inward investment opportunities that China can bring to the North East and the UK. The country is the second largest source of foreign direct investment in the world (after the USA) so to say there are opportunities is an understatement…
A few weeks ago at the NOF Energy national conference at the Sage Gateshead, a Chinese delegation consisting of potential investors dropped in on our stand. They were looking at investments in a number of different areas including incubator space in the offshore energy sector. They had also been meeting with various other partners in the North East looking into other property investment opportunities.
Their visit is the latest in a long line of meetings and conversations I’ve had with a variety of Chinese investors at places such as MIPIM in London, a key property investment exhibition. I’ve also had several invitations to attend conferences in China promoting trade and investment links between our two countries.
One thing is clear, Chinese investors are actively searching out opportunities outside of London and the South East, their traditional first choice destination. It could be said they are following a path well-trodden by the thousands of Chinese students making the most of the fantastic universities and quality of life to be found in the North East.
Mergers and acquisitions have been the traditional routes for Chinese businesses to invest overseas and there have been some very significant acquisitions of key North Eastern companies. Northumbrian Water, for example, was bought by Cheung Kong Infrastructure Group in 2011 – an acquisition which fell into the typical mould of Chinese investment in infrastructure and property assets. However, some of the fantastic technology companies we have in the North East have also attracted interest.
A couple of weeks ago I represented the North East Combined Authority at a visit by CRRC to the region. CRRC owns of one of the jewels in the UK subsea technology crown, SMD. The Chinese company is the largest railway rolling stock manufacturer in the world. It bought SMD a few years back and this visit to SMD’s factory and offices in Wallsend brought together key Chinese civic leaders, local government officials, representatives from the Bank of China and senior management from CRRC.
On view at SMD was the incredible technology and innovation excellence which CRRC has invested in – the company is a true world leader in subsea technology with their innovative ploughs, tractors and remotely operated vehicles (ROVs) used for digging trenches, mining and laying cables deep under the sea.
But apart from this technology-fest, the thing that struck me during the visit was the fact that CRRC are clearly seeking out new opportunities for investments in the UK, and with the array of bankers and financiers that accompanied them, they clearly have the funds to back up any interest. This is something that we at Invest North East England will be looking to build on over the next year, alongside similar opportunities from other countries around the world, for example India, but that’s another story……
Director, Invest North East England