Brexit making UK more attractive to Chinese companies
Dozens of Chinese companies believe the United Kingdom’s impending departure from the European Union will lead to more investment opportunities, according to a new survey.
The Ipsos Mori poll assesses the attractiveness of Europe and the UK as investment destinations. The majority of Chinese respondents said they were more likely to make future investments in the UK because of Brexit.
A total of 360 companies from China, Germany, France, the UK, and the United States participated in the poll, which was commissioned by Brussels-based investment trade association Invest Europe.
More than half, or 58 percent, of the 81 Chinese companies that shared their opinions said they were more likely to invest in the UK during the next five years. The participating Chinese companies do business in a range of sectors and have either made the decision to invest internationally in the last 12 months, or have previously considered investing in a European company.
Michael Collins, chief executive of Invest Europe, said the results may reflect the potential for new trade relations between the UK and other international markets, including China.
The UK is in the process of negotiating its departure from the EU, the world’s largest trading bloc, following a referendum held last year.
“One explanation is that companies might see a way in which, post-Brexit, the UK might become even more open to foreign direct investment than it has been in the past,” Collins said.
He noted that some international companies may be banking on continued favorable
... post-Brexit, the UK might become even more open to foreign direct investment than it has been in the past.” Michael Collins, chief executive of Invest Europe
pricing of sterling-denominated assets, following a drop in the value of the pound following the referendum.
“The reduction that’s happened already has made the UK more attractive and you might not think sterling will necessarily recover significantly, or you might see a scenario where sterling could decline further,” Collins said.
Political and economic uncertainty around the Brexit issue has left some European investors wary.
In the poll, 55 percent of investors from Germany and 52 percent of investors based in France said they were less likely to invest in the UK because of its decision to leave the EU. Fifty two percent of respondents from the United States said Brexit would not change their investment plans in relation to the UK.
“The closer you are to the debate, I suppose it’s more likely that you are following the twists and turns of Brexit on a day-today basis, so it probably looms rather larger in your thinking,” Collins said. “There is a degree of integration between the UK and French and German economies precisely because of EU membership.”