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China spreads its financial muscle to Great Britain
by Hasan Suroor January 23, 2012
Edited by Joseph Earnest
Newscast Media HOUSTON, Texas — In what is being hailed as a "great leap forward" in China's growing economic presence in Britain, the China Investment Corporation (CIC) has bought an 8.68 percent stake in Thames Water, Britain's largest water and sewerage company serving about 14 million customers.
The deal is China's first plunge into Britain's cash-strapped utility sector amid an aggressive British campaign to woo Chinese investment, especially in the country's creaking infrastructure. It has boosted expectations in other sectors such as wind farm energy and nuclear power plants to get a slice of the so-called "Peking Pound".
Britons are already driving cars made in Chinese-owned factories, consuming goods made in China and may soon be riding high-speed trains built with Chinese money and expertise while London is being touted as a major offshore center of trade in China’s currency, the Yuan.
The deal, estimated to be worth up to £1 billion, followed a high-profile visit to China by Chancellor George Osborne last week to tap into China's growing economic prowess and is being portrayed as a show of confidence in Britain’s recession-hit economy.
Mr Osborne, who met China's Vice-Premier Wang Qishan and the heads of CIC and the ICBC bank during his visit, described it as a "significant step by China".
"It is a vote of confidence in Britain as a place to invest and do business. This investment is good news for both the British and Chinese economies," he said.
The CIC, a sovereign wealth fund created to invest China's immense
foreign reserves abroad, indicated that it was keen to invest in
infrastructure development in Britain. Its head Lou Jiwei described
Britain as "one of the most open economies in the world".
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