China helping fuel tech growth in Britain

Chinese venture capital is pouring into London, where efforts are afoot to knock down more barriers and expand cooperation

London's high-tech prowess is growing as the city and surrounding regions have become the top destination for Chinese investments, especially those aimed at the tech sector, British experts say.

The link is thriving in part because the two economies are more in sync than ever.

Gordon Innes, the CEO of London & Partners, says experts from the institution are forecasting that there will be record investment from China in UK this year. Ren Qi / China Daily

London's service-based economy makes a comfortable match with Chinese companies that are thriving in the light of the growing consumer focus of China's economy, according to Gordon Innes, the CEO of London & Partners, a promotional and development organization funded by the mayor of London.

In the past nine months alone, 28 Chinese companies have pledged to make investments worth 220 million yuan ($33 million; 31 million euros) in London's economy, a figure that is expected to rise to close to 40 companies by the end of March, according to London & Partners.

The previous best year for Chinese investment in London was in 2011-2012, when 30 Chinese companies came to the city.

Economics experts from London & Partners are forecasting that there will be record investment from China in UK in 2016, increasing by 35 percent, Innes told China Daily.

Another sign of the trend was the Beijing-London Tech Venture Forum, a Jan 19 event in the Chinese capital focused on venture capital opportunities and organized by London & Partners and Tsinghua University Science Park, known as TusPark. The park is the flagship of Tus-Holdings Co Ltd and the largest single university science park in the world, with more than 1,200 enterprises housed in a 770,000 square meter area.

TusPark is the location of the research and development headquarters of many multinational corporations in China, as well as the headquarters of Chinese technology and innovation-based enterprises.

The forum demonstrated the growing ties between the two cities and their nations in innovative technology and financial services in recent years, and pointed to further cooperation.

More than 30 major business elites from venture capital funds and enterprises from both countries participated in the event, which included in-depth discussions about Sino-British bilateral innovative tech investment.

Innes said during the forum that London is the fastest growing and largest tech-cluster in Europe, and highly complementary to Beijing's tech-cluster, which has been highly successful, especially in areas such as financial technology.

As a result of President Xi Jinping's visit to the UK last year, more Chinese companies and venture capital funds are being encouraged to look at London as the next big tech investment.

Still, Wang Xiangyun, senior partner in Shengjing Technology, told China Daily that difficulties sometimes crop up when Chinese companies try to invest in overseas markets because of mutual unfamiliarity that can create a credibility gap.

She says European companies sometimes perceive gaps in the operating procedures and investment philosophy of Chinese enterprises, especially small and medium-sized enterprises.

Wang says her company assisted one client, a medium-sized firm, as it explored overseas markets. She says the company was competitive and demonstrated great sincerity in its talks with European negotiators. Yet, it was met with doubts that it would be able to make the investments it proposed within the needed timeframe.

Wang says the arrangements were worked out and the deal was very successful, but negotiations weren't smooth at first.

To avoid such issues, Innes suggested that newcomers from China find local partners and think about how to localize their products, including how to adapt their products and services for the UK and European economies in case cultural differences arise when they go to London.

Innes said he didn't see any political obstacles to commercial interaction between the UK and China, and he stressed that Chinese companies and funds are welcome to invest in all sectors.

"It's worth noting that during President Xi's visit, UK authorities announced 40 billion pounds ($57.3 billion) worth of investment deals with China," he said, "including investment in critical infrastructure, in which there might be sensitive areas of the economy such as nuclear power, water networks and health networks".

renqi@chinadaily.com.cn