The total value of disclosed deals involving Chinese investment in the UK was £3.59bn in 2021, with the number of Chinese-owned companies filing an audited revenue figure in the last two financial years increasing to 845, compared with 838 in 2020.
According to the Grant Thornton 2021 Tou Ying Tracker, developed in collaboration with CCCUK (China Chamber of Commerce in the UK) and China Daily, there are around 30,000 companies that are part of a China-owned corporate group.
Consumer businesses dominate this year’s Tracker, accounting for 28% of the 845 companies, followed by Manufacturing and Industrial (22%) and Business Support Services (17%).
However, private healthcare was the standout sector for revenue and employee growth as the 36 companies included in the research (a 29% increase on the previous year) grew their revenues by 40% and staff numbers by 14%, with most sectors seeing a reduction in employee numbers.
Additionally, the Tracker revealed that Chinese companies have created or supported almost 61,000 jobs in the UK, although this is down from more than 75,000 in 2020. Of the businesses included in the Tracker, almost 30% of their employees work in the North West, and 20% in London.
However, it found that the revenue growth of the companies included has dipped slightly year-on-year. Together, the 845 companies have an average overall revenue growth of 5% which is down from 12% in 2020 Tracker, and they have combined revenues of £63bn, down from £92bn year-on-year,
The Tracker also found that the mid-market business, with average revenues of between £50m to £1bn, account for almost 70% of employees from businesses in the Tracker, though the market segment reportedly represents only 10% of companies.
Simon Bevan, head of China Britain Business Group at Grant Thornton, said: “This is the fourth consecutive year that the number of businesses included in the Tou Ying Tracker has grown – despite economic headwinds including the Covid-19 pandemic and Brexit.
“Surging energy prices, clogged supply chains, uncertain consumer confidence and inflation all contributed to a lack of confidence about global economic conditions.”
He added: “In spite of these difficulties, Chinese businesses in the UK are showing increasing confidence about the future. Though Chinese foreign direct investment (FDI) into Europe fell to a 10-year low in 2020, the UK retained its position as one of the top three destinations in the region.”