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Xi Jinping's UK state visit
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China's President Xi Jinping, right, meets Britain's Prime Minister David Cameron, 3rd left, and other senior members of his government in the cabinet room in 10 Downing Street. Photo: AP

The buying of Britain: Chinese biotech, insurance and tourism firms line up to make British acquisitions

Beijing see acquisitions as way for domestic businesses to update products and technology

Equipment makers, tourism agencies and insurers are joining China's mining, oil, and gas giants in investors in British business as mainland companies look to expand their horizons.

China's deal to take a one-third stake in French power giant EDF's £25 billion (HK$300 billion) next-generation nuclear project at Hinkley Point attracted all the big headlines.

However, that was only one of many deals signed during last week's British state visit by President Xi Jinping , involving 150 projects worth about £40 billion (HK$595 billion), which emphasised the nations' strengthening business ties.

Before the global financial crisis Chinese firms focused largely on acquisitions in oil, gas and mining, yet since the start of the year firms have invested in more diverse industries including restaurants and hotels, transportation, real estate and technology, according to data from the financial services company Dealogic.

Ping An Insurance, China National Travel Service (HK) Group, Taikang Life Insurance, Wanfeng Auto Holding Group and CSR Group, the mainland train manufacturer, are some of the companies that have made British acquisitions this year.

Ping An bought Tower Place in London for £327 million in January, its second purchase in the city's financial district in less than two years. Then in April, CSR completed the £130 million buyout of the British submarine equipment maker. Specialist Machine Developments.

China National Travel bought Kew Green Hotels in August for more than £400 million.

"Britain is an established industrial power and London is a world leader in financial, professional and other services, such as in shipping, insurance and arbitration," said Carson Wen, of counsel at law firm Jones Day.

"There is a lot that Chinese enterprises can investment in, license from, form partnerships with British enterprises."

Beijing wants to encourage domestic companies to make foreign deals to help them update their products and technology and expand their market share, not simply generate profits.

SinoVet, a Chinese animal health technology company working in the field of vaccines, set up a new facility near Edinburgh, which aims to use British animal health research and development expertise.

Geely, the private Chinese car maker that owns Coventry's London Taxi Company - maker of the iconic London black cabs - invested an extra £50 million to build clean energy-fuelled taxis.

A report by China's National Development and Reform Commission said Chinese and Britain businesses were "highly complementary to each other" and that there was now "tremendous" demand among mainland firms for British investment.

Yet China, including Hong Kong, is far from being the biggest investor in the UK; its firms invested in 112 British projects in the 2014-15 financial year, which created 4,728 new jobs, the UK Trade and Investment's Inward Investment Report showed.

Indian firms invested in 122 projects that created 7,730 jobs, while US firms invested in 564 projects that created 26,505 jobs.

This article appeared in the South China Morning Post print edition as: Insurers, tourism firms keen to join British expansion
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