China to invest over £100 bn in UK infrastructure over the next decade

China is set to invest over £100 billion in the UK's infrastructure over the next decade, setting off a new wave of joint ventures with UK firms, constructionmanager.co.uk reported.

According to the report by the Centre for Economics and Business Research (Cebr) for law firm Pinsent Masons, of the £105 billion that China would invest in the UK by 2025, the largest chunk, £43.5 billion, would go into the energy sector and projects such as nuclear, wind and solar photovoltaic power generation.

The property sector would receive £36 billion while transport would get £19 billion.

UK and Chinese business leaders consulted for the report said a clear rise in the number of joint ventures between UK and Chinese firms was evident to them, with recent collaborations including the Royal Albert Docks in East London, one of the largest real estate developments in the UK, and the Nine Elms development in Battersea.

According to Richard Laudy, head of infrastructure at Pinsent Masons, this level of investment would be a game changer for UK infrastructure.

He added, over the past few years China's role as an investor had evolved from direct investor through sovereign wealth funds to Chinese businesses becoming co-funders, co-developers and co-contractors in major UK infrastructure projects.

The Scotsman reports that the injection, which would total an estimated £105 billion by 2025, would be expected to result in a rise in joint ventures such as the existing one between Ineos and Petro­China to run Scotland's only oil refinery at Grangemouth.

Laudy added as the need to modernise the UK's major infrastructure rose by the day, the projected influx of Chinese investment into UK infrastructure would be a welcome boost to the construction industry in particular and UK economy as a whole.

The biggest targets for Chinese capital were likely to be investment in projects including nuclear energy and renewables, such as wind and solar power.

The report said Chinese investments in the UK energy sector could exceed £43 billion in the next decade, with a further £36 billion being pumped into real estate and the transport sector seeing £19 billion.

The figures would be expected to come on top of money already spent by China in the North Sea, where state-controlled CNOOC paid £9.7 billion for the acquisition of Canadian explorer Nexen in 2012.

In a separate development China's Sinopec reported acquiring a 49-per cent stake in Talisman Energy's UK operations.