How China bought a £190bn slice of Britain
Chinese interests own more than £190 billion in British companies and property and Beijing is making millions a year from asylum hotels, a new analysis reveals. The Sunday Times China List discloses that organisations linked to the Communist Party own three hotels blockbooked for migrants, netting them at least £15 million in Home Office contracts.
They are just some of the 442 UK assets owned by private individuals and firms from China and Hong Kong, as well as state-backed organisations, with a total value of £190 billion. Their value has risen from £134 billion in 2021 and £152 billion in 2023. Of the total, about £51.3 billion of assets are owned by organisations linked to the Chinese government, including the former site of the Royal Mint in London, earmarked for China’s new embassy.
The research, compiled using share prices, company valuations and publicly available accounts, found that the Chinese own:
● Large tracts of our national infrastructure including stakes in Heathrow airport, water companies, wind farms and power networks.
● 28 independent schools including Plymouth College, once attended by the Olympic champion Tom Daley.
● A giant warehouse group that has paid the Chinese state about £250 million in dividends.
● £92.4 billion of shares in FTSE-listed companies.
Keen to attract new investment, both Rachel Reeves, the chancellor, and David Lammy, when he was foreign secretary, have visited Beijing in the past year.
China has been described by Anne Keast-Butler, director of GCHQ, as an “epoch-defining and systemic challenge” to national security, prosperity and inter- national order. But in the past fortnight the government has been accused of putting the UK’s economic interests with China first, after spying charges were dropped against Chris Cash and Christopher Berry. Both have denied wrongdoing. The case collapsed over the government’s failure to brand Beijing a threat.
The shares deliver both power and handsome returns
Last week, during a debate in the House of Commons, the security minister, Dan Jarvis, said the UK’s relationship with China was complex. “Where we are able to co-operate economically where it is in our national interest to do so, we should proceed, but we should proceed with a clear set of principles that underpin that,” he said. “Fundamentally, our national security comes first.”
Dame Priti Patel, the shadow foreign secretary, told The Sunday Times: “Labour are bending over backwards to appease Beijing. Having wrecked our economy, they are now going begging abroad, putting our economic and national security up for sale to the highest bidder.”
Last year the government completed a China audit, parts of which were incorporated into a national security strategy published in June. However, the audit itself remains classified.
In response, the Inter-Parliamentary Alliance on China produced its own audit on the UK-China bilateral relationship which has been seen by The Sunday Times, though is yet to be published.
The report found: “Trade between the UK and China can no longer be regarded as a neutral or purely commercial space.
Instead, it increasingly reflects strategic competition, national security concerns, and contested norms around governance and technology.”
The report found that China was starting to dictate terms in critical areas such as renewables and electric vehicles.
The China List analysis shows how the acquisitions deliver not only power but handsome returns for President Xi’s regime through rising asset values and dividends. The £51.3 billion in assets owned by the Chinese state include:
● Hinkley Point C: The state-owned China General Nuclear Power Group (CGN) owns 27.4 per cent of the nuclear power station under construction on the Somerset coastline — a stake worth £13.2 billion — making it Beijing’s most valuable UK investment.
● Heathrow: The China Investment Corporation (CIC), Beijing’s sovereign wealth fund, owns 8.7 per cent of the UK’s busiest airport, worth £2 billion — an increase of more than £400 million since 2023.
● Thames Water: CIC’s 9 per cent stake has a value of £1.8 billion, according to the utility’s latest accounts.
● UPP: One of the UK’s largest developers of university accommodation, this London-based property firm is 40 per cent-owned by an arm of China’s central bank called the State Administration of Foreign Exchange (Safe). Its subsidiary Gingko Tree Investment has a stake in UPP worth £632 million.
● London property: The Beijing government spent £255 million to buy Royal Mint Court. Steve Reed, the housing secretary, was expected to announce this month whether the embassy would be approved but the decision has been pushed back to December. Arms of the Chinese state also own office blocks, residential developments and other London property worth more than £2 billion.
● Inch Cape Offshore wind farm: Expected to generate enough energy to power more than half of Scotland’s homes from 2027, Inch Cape is 50 per cent owned by State Development and Investment Corporation (SDIC). Its stake is worth £1.75 billion.
The three asylym hotels are owned by Kew Green Hotels and Campanile. Kew Green, based in Richmond upon Thames, southwest London, is a £300 million business wholly owned by Beijing through its China Tourism Group Corporation.
Its Holiday Inns in Warrington, Cheshire, and Ashford, Kent, are blockbooked to house asylum seekers and were subjected to protests in August.
Their accounts suggest they have made about £15 million from the Home Office contracts. Campanile, which is owned by the Shanghai municipal people’s government, has a three-star hotel in Cardiff which has housed asylum seekers since 2022. Kew Green was approached for comment.
Strong returns
In purely financial terms, one of the Chinese government’s most valuable UK investments is the logistics company Logicor, a crucial cog of the digital economy with 176 distribution centres. About 60 per cent of the outfit is owned by the CIC.
Financial statements published by Logicor show the business paid out £40 million to its investors last year and another £18 million in February. CIC’s cut of these payments should have been £34.8 million, on top of £222 million paid out in earlier years.
In addition, the Chinese central bank owns shares in FTSE 100 companies with a combined value of more than £11.9 billion including stakes worth £2.1 billion and £901 million in the oil giants Shell and BP, a £484 million holding in the global mining company Rio Tinto, plus a chunk of the pharmaceutical behemoth AstraZeneca worth £1.1 billion.
Analysis of shareholder registers by the data provider Argus Vickers reveals the sovereign wealth fund of Hong Kong, subject to China’s rule for 28 years, owns FTSE 100 shares worth nearly £1.5 billion.
Two state-owned retirement funds have holdings worth £287 million.
Susan Baldry, managing director of Argus Vickers, said: “Our analysis of shareholder registers shows that shares worth at least £92 billion are now owned by China or Hong Kong-based investors.
However, the real number may be even higher.
“That’s because about 300 companies listed on the London stock market, including nine of the FTSE 100, are not domiciled in the UK and therefore do not have to publish a register showing who their owners are. This lack of transparency may present national security and governance risks, particularly when foreign state-linked investors are involved.”
Skyscrapers and schools
The China List includes nearly £139.2 billion of assets owned by private companies and people based in China and Hong Kong. Many of them may not support Xi or his policies. Their investments range from vast residential property developments and shopping arcades to videogame studios and pharmaceutical firms.
They include a stake of around 50 per cent in Clarks shoes, the car brand Lotus, Wolverhampton Wanderers Football Club and Wentworth Golf Club in Surrey.
Born in Chongqing, in southwestern China, Cheung Chung-kiu owns swathes of London property, including the 52-floor Leadenhall Building. Better known as “the Cheesegrater”, the tower block has delivered rental cheques totalling £42.1 million over the past year.
The “Walkie Talkie”, another famous fixture on the City skyline, garners £46 million a year of rent for Lee Kum Kee Group, the Hong Kong-based food manufacturer owned by the Lee family.
There are 28 private schools owned by Chinese investors. Last year Phil Brickell, a Labour MP who sits on the Commons foreign affairs committee, said that Britain’s “world-leading education system is an obvious target for influence” for China and “should be protected accordingly”.
One office block in the City makes £46m a year in rent
Political influence
No individual Chinese investor has more British business interests than Li Ka-shing. The 97-year-old tycoon and his family own the Greene King pub chain as well as 75 per cent of Northumbria Water and nearly half of VodafoneThree, the telecoms goliath. Superdrug, Savers and The Perfume Shop are also part of Li’s CK Hutchison group.
Li’s relationship with the Chinese state is complex. He served on the body that selects Hong Kong’s chief executive and his elder son, Victor Li, 61, is a member of an advisory body to the government.
However, Beijing was enraged by the Lis’ sale of two Panama ports this year. It urged CK Hutchison to “think twice” about “what position and side they are on”, later ordering state-owned firms to stall new contracts with the family.
No Chinese or Hong Kong company is ringfenced from Xi’s regime. There is a legal duty for all Chinese firms to follow the state’s instructions when required.
Tug of war
In 2020 British Steel was snapped up by Jingye Group, owned by Li Ganpo, 76, a former teacher who served as a communist party official for nearly 15 years.
But the Chinese owner is now in legal dispute after the UK government drove through emergency legislation to ensure the Scunthorpe furnaces could be kept going. MPs and trade unions had raised concerns that Jingye might be trying to sabotage the operation to make the UK more dependent on Chinese imports.
Jingye put a price of at least £1 billion on ceding legal control of British Steel amid tense negotations. But, in an indication of how blurred the lines between the Chinese state and private sectors have become, it has apparently offered to reduce it to zero — if Sir Keir Starmer approves the new London embassy.
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