When George Osborne, the British chancellor, told a Beijing audience during a trade visit two years ago that there was “no country in the west more open to investment from China” than the UK, there was more than a grain of truth amid the bluster.
From airports to student accommodation, from water utilities to London skyscrapers, over the past decade China has quietly become one of the biggest foreign owners of British bricks-and-mortar assets. Between 2005 and 2013, China spent about £11.7bn acquiring stakes in UK businesses — dominated by infrastructure — largely through state-owned investment funds, while billions more have been spent on office space and prime real estate.
Since Chinese economic growth began to falter and its stock market was sent spinning — weeks of turmoil have seen the authorities burn through $200bn to support share prices — the spotlight has fallen on this strategy of funnelling some of the country’s vast $3.65tn foreign exchange reserves overseas.