UK investment in China to quadruple by 2020, says study

UK investment in China is set to quadruple over the next five years, according to King & Wood Mallesons study.

UK investors will pour four times as much money into China by 2020 when compared with last year, according to a new study from King & Wood Mallesons. The report highlights that foreign direct investment (FD) in China will double by 2020, however, the UK’s contribution to the total will quadruple in five years’ time.

The study, titled Branching Out: Investment Opportunities in China, states that the total investment from the UK is expected to rise to £26 billion by 2020, up from £6.7 billion, as the Chinese economy opens up further to foreign capital.

“With stable development, China has become the fastest growing country attracting the most investment in the world not merely because of the size of the market, but also due to our improving legal environment and increasingly healthy society,” said Wang Ling, managing partner of King & Wood Mallesons in China.

China’s total FDI investment should surpass £1 trillion

It seems that China’s attractions will continue to shine brighter, especially if growth in Europe stagnates further, and could see FDI nearly double to an incredible £1.3 trillion.

Data from the study highlights that the UK is forecast to see the largest percentage increase in overall investment, as the projected change is 0.97 percentage points. However, the total will remain leagues below the capital flows from Hong Kong, which continues to contribute the majority of FDI.

The financial services sector is expected to receive the largest investment (£143 billion), with life sciences next in line to attract huge capital investments (128 billion). Other notable sectors should include energy industry and media and entertainment.

“The government has identified a range of areas that need foreign investment so that China can meet domestic demand and successfully rebalance its economy towards quality growth,” said Stuart Fuller, global managing partner at King & Wood Mallesons.

“This blueprint for investment will play a key role in identifying and unlocking the potential in and across the many markets that comprise China. In this respect, fortune will favour the brave and fortune will require planning, persistence and perseverance.”