World Economy

China Investment in EU Doubles

China Investment in EU DoublesChina Investment in EU Doubles

Chinese investment in the UK has reached an all time high with $13b invested in the past three years and overall financial transactions in the EU double 2013 levels.

The UK attracted almost one third of all Chinese investment into the EU – accounting for $5.1bn – according to research by legal firm Baker & McKenzie conducted by Rhodium Group, Research reported Wednesday.

Tim Gee, global head of M&A at Baker & McKenzie said: “It is remarkable that, even as Chinese investment into Europe has grown almost exponentially over the past decade, the UK continues to attract nearly one-third of all Chinese investment into the EU. The statistics underline, once again, the strength of the UK economy, the health of its brands and Britain’s attractiveness as a country in which to do business.

That is a great testament to British business, especially when you consider that UK investment in the rest of the world continues to outpace total foreign direct investment into the UK.”

Europe has emerged as a leading region for Chinese foreign investment globally; there were 153 separate investments worth $18b last year.

Chinese investments in the EU are spread across a wide range of sectors. For the entire period of 2000-2014, the top recipients of Chinese capital were energy ($17b), automotive ($7.7b), agriculture ($6.9b), real estate ($6.4b), industrial equipment ($5.3b), and information and communications technology ($3.5b).

  Chinese Brands

The UK’s bank brands collectively lost 3% of their value according to the Brand Finance Banking 500 while Chinese brands overtook many major western brands.

NatWest, RBS and Nationwide all saw their brand values fall, although the worst affected was Coutts, which lost 42% of its brand value last year according to the ranking from brand valuation and strategy consultancy Brand Finance.

HSBC remains the UK’s most valuable bank brand, with a value of £17.5b ($26.7b). Both HSBC and second placed Barclays have registered negligible growth rates of 1.5% and 0.1% respectively. The consultancy said most UK banks have been affected by a toughening regulatory regime.

Lloyds was the only one of the Big Four to show strong growth, having increased 16% to £4.4b.

Wells Fargo remains the world’s most valuable bank brand. Following growth of 15%, its total value stands at $34.9b. Some other US banks have registered respectable brand value growth such as Citi and Chase (both up 7%).

Chinese brands have been gaining ground. Brand Finance’s research found ICBC had moved from sixth to second place in the rankings, overtaking HSBC which is now in 3rd globally. China Construction Bank, which has already overtaken HSBC in terms of market capitalization, has grown its brand by 39% to overtake Citi, BoA and Chase. Spain’s Santander has been pushed to the bottom of the top ten by Bank of China and Agricultural Bank of China.

Brand Finance CEO David Haigh said: “A strong brand builds loyalty, helping to reduce churn.

As switching becomes easier and with nimble competitors emerging, some banks may have to rely on the power of their brand ever more heavily to hold onto customers.”