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UTILITY WEEK | 20TH - 26TH NOVEMBER 2015 | 17 Finance & Investment What it's like to work for Chinese owners? Gas distribution network Northern Gas Networks (NGN) is owned by Cheung Kong Infrastructure Holdings (CKI). The company says its owner is "committed to supporting its business in deliver- ing a safe and reliable gas service". The distribution company's chief executive, Mark Horsley, was full of praise for CKI in a recent interview with Utility Week (11 September), say- ing he is "deeply committed" to the group and its business values. "One of the strongest, successful elements of CKI is that they run their businesses indepen- dently – that makes great business sense," he said. "They believe in keeping things in a locality. We work closely together but the local management is very important. It's a lesson I've learnt as well, from being in larger organisa- tions trying to bring things together to run as a corporate." Horsley said that by keeping customer promises and improving efficiencies, NGN has generated significant savings, driving down costs for customers. He credits CKI with allowing him the flexibility to change the business to be more customer centric. What's in it for China? What can China expect to gain from investing in the UK? The Economist reports that the Chinese are not particularly interested in Britain as an overseas market, because it has a relatively small population compared with other financial powerhouses. Chatham House director Robin Niblett says the Chinese plan to use the UK, specifically London, as a platform to "go global". Access to London and its financial markets has become of "critical importance" to China's thinking, particularly as it seeks to internation- alise the renminbi, which it hopes will one day become an internationally traded currency to rival the dollar. Speaking at an international conference in Westminster in 2009, the then Chinese ambassador, Fu Ying, confirmed this, saying the UK is the "world economic and financial power" with a "comprehensive legal system, highly liberalised market and sophisticated financial service sector". "London is one of the world's financial centres," she said. "High-tech, design and managerial experience that the UK has to offer happens to be what is needed by businesses in China. Therefore, the UK is the preferred platform for Chinese businesses attempting to go global." try is "showing signs" that it is prepared to commit to the UK economy with 112 projects, including 13 investments from Hong Kong, in the past year. With regards to utilities, China already owns stakes in UK water, electricity distribution and gas distribution companies, including an almost 9 per cent of Thames Water parent company Kemble Water, bought for an estimated £500 million in 2012. But could we see an even greater invest- ment in UK utilities? There is broad con- sensus that the UK's infrastructure need is heavily concentrated in the energy sector. Pinsent Masons believes China will invest £105 billion in British infrastructure by 2025 and energy is expected to be one of the biggest beneficiaries, with £43.5 billion of investment expected to flow into UK energy infrastructure over the next ten years. While a slowdown from the double-digit growth in the size of the Chinese economy is "unavoidable", even with a slower pace of growth China is still on course to become the world's largest economy by 2030. But for greater investment to be forthcoming, major decisions from policymakers will have to be made, Pinsent Mason says, because "the Chi- nese will only invest if returns are available and the rules of engagement are clear". OTHER UTILITY INVESTMENTS Cheung Kong Group 50% Seabank Power April 2010 £211m Gingko Tree Investment 49% Statkraft's UK onshore wind portfolio [Alltwalis in Wales, and Baillie and Berry Burn in Scotland] bought in 2014 for an undisclosed amount THE BIG GLOBAL INVESTMENT NUMBERS Estimated annual overseas investment: £90bn Invested overseas since 2005: £570bn Estimated value of China's sovereign wealth funds: £2.7tn China Investment Corporation Type: Sovereign wealth fund Leadership: Ding Xuedong (chairman and chief executive) Total assets: $746.7bn Founded: 2007 Headquarters: Beijing Biggest projects: 10% of Heathrow Airport; 100% of the City of London headquarters of Deutsche Bank Ding Xuedong:"CIC mostly makes big investments, so we need to diversify. Our selection is purely based on financial returns." Cheung Kong Holdings Type: Private Leadership: Li Ka-shing (chairman) Total assets: $52.39bn Founded: 1971 Headquarters: Hong Kong Biggest projects: Purchased O2 for £10.25 billion (subject to regulatory approval); £1.1bn takeover of Eversholt Rail; [speculative] has been tipped to buy National Grid's gas distribution business Li Ka-shing:"I do not get overly optimistic when the market is good, nor overly pessimistic when the market is down." China General Nuclear Power Corporation (CGN) Type: State-owned Leadership: Zhang Shanming (chairman) Total assets: $43.7bn Founded: 1994 Headquarters: Shenzhen, Guangdong Biggest projects: 80% stake in three EDF UK wind- farms bought for $157 million; $7.7 billion agreement with Nuclearelec- trica to set up two nuclear reactors in Romania (10 Nov) China Harbour Engineering Company Type: Limited Leadership: Lin Yi Chong (president and chief executive) Total contracts: $10bn Founded: 2005 Headquarters: Beijing Biggest projects: Partnered with Namibian company Babyface to bid $76 million for two lucrative road tenders in the country KEY FACTS AND FIGURES BEHIND SOME OF CHINA'S INVESTORS IN UK UTILITIES