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Chinese investment in the UK’s leading companies has surged to almost £90bn amid fears that Beijing is buying up Britain.
Analysis by Argus Vickers shows investors in Hong Kong and the Chinese mainland – including the country’s central bank – have amassed substantial stakes in the UK’s most valuable firms.
These include defence giant BAE Systems and National Grid, the power network that ensures British homes and businesses can keep the lights on.
The research shows Chinese investment in companies listed on the FTSE 100 climbed almost 40pc from £64bn in December 2022 to £88bn today.
It suggests Beijing has snapped up shares that account for roughly 5pc of Britain’s leading index, which has a market value of £2.1 trillion.
The Argus data shows the ultimate source of the money behind tens of billions of pounds of investment into the UK stock market can be traced back to China.
It comes amid growing concern about the implications of Chinese ownership of UK assets, after the Government was forced to seize control of British Steel.
The Argus analysis shows the People’s Bank of China holds a £2.4bn stake in Shell and £1bn in AstraZeneca, while China Investment Corporation (CIC), the country’s sovereign wealth fund, has stakes worth hundreds of millions of pounds in dozens of FTSE 100 companies including Barclays, Severn Trent and easyJet.
Both hold shares worth hundreds of millions of pounds in UK-listed defence firms including BAE Systems, which plays a significant role in the UK’s Trident nuclear deterrent, as well as engine-maker Rolls-Royce and Babcock, which helps to maintain Britain’s military tanks.
The three companies are considered so important for national security that the Government has a so-called golden share in Rolls and BAE, allowing it to block their takeover, as well as special powers over Babcock shipyards servicing the Royal Navy.
Although the stakes are not individually big enough to trigger a market meltdown if sold down, they show how Chinese investment in the UK has grown substantially in recent years, with hundreds of millions of pounds flowing back to Beijing every year in the form of dividends.
Susan Baldry, managing director of Argus Vickers, said the data “uncovers globally who truly owns and influences public companies”.
She said: “Thanks to the UK’s strong transparency laws, we’re able to see that investors from China hold a healthy stake in a broad range of Britain’s largest listed companies.”
China’s central bank also owns shares worth more than £200m in National Grid and £300m in drugmaker GlaxoSmithKline.
The National Council for Social Security Fund, another government-controlled investment fund, has also snapped up a number of stakes in UK-listed firms including Shell, mining giant Rio Tinto and energy firm SSE.