The role of Chinese investment across critical UK infrastructure has come under heightened scrutiny over the last few years. Key assets, from our airports to our national security energy projects, underscore the depth of this foreign ownership. The state of affairs poses serious implications on our national security and emerging geopolitical threats.
The most famous example of this is probably the Leadenhall Building in London – affectionately nicknamed, the “cheesegrater.” In 2017, a Chinese property tycoon bought it for £1.15 billion. Now under Chinese ownership, this high-profile purchase highlights the increasing appetite of Chinese investors for trophy assets in the UK capital.
Given its close ties to the Chinese government, Huawei—founded by ex-Chinese army officer Ren Zhengfei in 1987—has been at the center of this concern. The company’s involvement in UK telecommunications networks faced opposition from several Members of Parliament, despite the UK’s National Cyber Security Centre initially deeming any risks posed by Huawei as manageable in 2019. The unfolding scenario is a powerful, real-world example of the precarious line that exists between economic engagement and national security.
The impact of these Chinese investments reaches all sectors, even renewable energy. Red Rock Renewables is an owner of a 25% interest in the Beatrice offshore wind farm. This farm, situated in the waters of Scotland’s coast, is operated by state-owned SDIC Power. This level of involvement only underscores how deeply integrated Chinese companies have become into vital energy infrastructure projects in the UK.
Chinese investments have made deep inroads into U.S. transportation. China Investment Corporation The China Investment Corporation is a sovereign wealth fund, wholly owned by the Chinese state. It has a 10% interest in London’s Heathrow Airport. EDF Energy still owns the rest of the airport shares. Today this airport is the busiest in the world and an immensely popular hub for international travelers going any number of places on earth.
China General Nuclear Power Group is already active, it is increasing its ambitions. They initially took a 33.5% interest in the Hinkley Point C nuclear power station, now under construction in Somerset. As recent reports show, that stake has recently plummeted to 27.4%. The company has ceased making any additional financing infusions to the project. These transitions can indicate changes in fiscal policy as well as global power dynamics.
In the realm of transportation innovation, Geely Auto, a car company based in Hangzhou, owns the London EV Company, which manufactures electric black taxis in Coventry. This investment aligns with broader trends toward sustainability and electric vehicles and raises questions about foreign influence on domestic manufacturing.
The sports and utility industries are also indicative of huge Chinese investment. Wolverhampton Wanderers Football Club is majority owned by Fosun International, a Chinese conglomerate based in Shanghai. Additionally, Fosun holds a 75% stake in Northumbrian Water Group, responsible for essential water supply and sewerage services in the northeast of England.
UK Power Networks is owned by Li Ka-shing’s investment group out of Hong Kong. This government-owned company is responsible for any and all electricity distribution across London and the southeast of England. These investments are indicative of a widening link between China and essential public services in the UK.
Experts have differing opinions on just how much of a risk these investments pose. Prof. Giles Mohan stated, “This threat is asserted and not proven, and these companies are profit-driven so it is not in their interests to sabotage our infrastructure.” His comments show that fears of espionage, academic disruption, or worse are exaggerated.
Grace Theodoulou, a policy fellow at the Council on Geostrategy, highlights significant risks associated with foreign control over infrastructure: “The first is the potential for espionage – for example, having Chinese-made audiovisual equipment installed in government buildings or devices. The second is that infrastructure can be controlled by the manufacturer and, as such, could be disrupted for geopolitical leverage.”
The argument over Chinese investments goes on as players grapple with the economic opportunity and the risk to security. In response, the UK government has moved to route foreign acquisition of strategic assets under a finer-tooth comb. Recent developments reflect a growing awareness of the need for careful consideration when it comes to foreign investments in critical infrastructure.