‘China will provide £105bn infrastructure boost to UK by 2025’

The report from law firm Pinsent Masons say that the leading recipients of this cash will be the energy, real estate and transport sectors.

The UK energy sector is expected to be the biggest target for Chinese capital, with investment in projects including nuclear energy, wind power generation and photovoltaic power generation could be set to reach £43.5bn. The real estate and transport sectors could receive £36bn and £19bn respectively over the next decade, the report claims.

Richard Laudy, head of infrastructure at Pinsent Masons, said: “As the need to modernise UK’s major infrastructure gets greater by the day, the projected influx of Chinese investment into UK infrastructure is expected to be a welcome boost to the construction industry, in particular and UK economy as a whole.

“As a foreign investor, China is going to become increasingly important for UK infrastructure by 2025. This means UK-China partnerships need to grow over the next decade.

“Our report finds that this level of investment is going to be a game-changer for the UK infrastructure. Over the past few years we have seen China’s role as an investor evolve from making indirect investments through sovereign wealth funds – Chinese businesses are now becoming co-funders, co-developers and co-contractors in major UK infrastructure projects. We are already seeing this happen – for example, Beijing Construction Engineering Group making a major investment in Manchester Airport City.”

UK and Chinese business leaders who were consulted in connection with the report are already reporting a rise in the number of joint-ventures between UK and Chinese firms, including one of the largest real-estate developments in the UK, Royal Albert Docks in East London and the development at Nine Elms in Battersea.

Business leaders also believe that the energy sector is expected to see a continued increase in Chinese investment in projects including offshore wind farm development and other key renewable power networks. However, the report finds that this will pick up significant pace in the latter half of the forecast period.

Mr Laudy said: “Over the coming decade, we expect a significant increase in direct investment from the Chinese coming through in the shape of joint-ventures and strategic alliances.

“Four out of five of the world’s largest construction and engineering companies are now Chinese, with a growing appetite for infrastructure investment and with the potential to invest vast amounts of capital in advanced economies in Europe. Entry by China into the UK market will create significant sector opportunities.”