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Tou Ying Tracker reveals scale of Chinese investment in UK

The Grant Thornton 2021 Tou Ying Tracker, developed in collaboration with CCCUK (China Chamber of Commerce in the UK) and China Daily, finds that Chinese companies continue to make an important contribution to the UK economy.

This year’s research identifies 845 Chinese-owned companies that filed an audited revenue figure in at least one of the last two financial years*, compared with 838 in the 2020 Tracker.

Now in its ninth year, the Tou Ying Tracker [ 3283 kb ] finds that the revenue growth of the companies included has dipped slightly compared to the prior year. Together, the 845 companies:

  • have an average overall revenue growth of 5% (down from 12% in 2020 Tracker)
  • have combined revenues of £63billion (down from £92billion in 2020 Tracker)
  • employ almost 61,000 people (down from more than 75,000 in 2020 Tracker).

Private healthcare sector demonstrates greatest growth

Consumer businesses dominate this year’s Tracker, accounting for 28% of the 845 companies. This is followed by Manufacturing and Industrial (22%) and Business Support Services (17%).

However, private healthcare was the standout sector for revenue and employee growth in the Tracker. The 36 companies included (a 29% increase on the previous year) grew their revenues by 40% and staff numbers by 14% - a rarity in this year’s Tracker, with most sectors seeing a reduction in employee numbers.

Simon Bevan, Head of China Britain Business Group, Grant Thornton UK LLP, said:

“These Chinese companies represent only a fraction of those doing business in the UK. In total, we identified around 30,000 companies that are part of a China-owned corporate group or are majority held by a Chinese national.

“The average revenue growth of Chinese businesses in the UK remains strong and this is the fourth consecutive year that the number of businesses included in the Tou Ying Tracker has grown - despite economic headwinds including the COVID-19 pandemic and Brexit - showing that the UK continues to be an attractive place to invest and work. Our Tracker finds that Chinese investors are active across a wide swathe of the UK economy, with companies from eight sectors included in this year’s research.”

Chinese companies give boost to regional economies and employment

The Tou Ying Tracker finds that Chinese companies have created or supported almost 61,000 jobs in the UK. Of the businesses included in the Tracker, almost 30% of their employees work in the North West, and 20% in London.

The Tracker also finds that the mid-market (businesses with an average revenue of between £50 million – £1 billion) accounts for almost 70% of employees from businesses in the Tracker, though the market segment represents only 10% of companies.

Chinese M&A activity in the UK  

The Tou Ying Tracker report also analyses the complete Chinese investment landscape in the UK – in which mergers and acquisitions play an important part. The research finds that, in 2021, 58 deals in the UK involved Chinese investment. TMT and the Life Sciences sectors made up the majority of these, accounting for 29% and 26% of total deals respectively. The total value of disclosed deals involving Chinese investment in the UK in 2021 was £3.59 billion.

Simon Bevan added:

“The COVID-19 pandemic has undoubtedly made business more difficult, but trade and investment between the UK and China has held its own. But this was not the only impediment to international trade and investment over the last year. Surging energy prices, clogged supply chains, uncertain consumer confidence and inflation all contributed to a lack of confidence about global economic conditions.

“In spite of these difficulties, Chinese businesses in the UK are showing increasing confidence about the future. Though Chinese foreign direct investment (FDI) into Europe fell to a 10-year low in 2020, the UK retained its position as one of the top three destinations in the region.

“We expect that the UK will remain a key market for Chinese investors, both for those investing for the first time and those with well-established operations in the country. Given its status outside the EU, the style of Chinese investment into the UK may change, as companies make sure they retain a foothold in the EU, but the UK will still likely form an important part of their European strategy.”

*To compile the 2021 Tou Ying Tracker [ 3283 kb ], the firm identified all Chinese-owned companies that have filed an audited revenue figure of at least £1,000 on Companies House in at least one of the last two financial years to 30 September 2021, and that are at least 50% owned by a Chinese corporate, investor or national.

Tou Ying Tracker 2021 Read the report