29 June 2005

ASIA PACIFIC INVESTMENT INTO UK SURGES NEARLY 50%, HIGHLIGHTING ITS POSITION AS EUROPE'S NO 1 DESTINATION FOR ASIA BUSINESSES

Globalisation and growing awareness of UK as an ideal high-technology location for dynamic companies is driving Asian investment

Inward foreign investment into the UK from Asia Pacific jumped 43 percent during the past year, underpinned by a big increase in investor flows from China and India which hit record levels, said UK Trade & Investment Regional Director (Inward Investment) Paul Grey at the release of the 2004-5 investment review report.

“The increase demonstrates the UK’s position as the leading investment location in Europe for businesses from the world’s fastest expanding economic region, the Asia Pacific,” he said.

The growth in investment from the economic powerhouses of China and India was partly driven by the forces of globalisation as local Asian companies ventured abroad in their search for new sources of growth, skills and technology.

“We are experiencing strong interest from investors because there is a growing awareness the UK is an ideal place for dynamic Asian businesses to grasp new opportunities, technologies and markets in an open and cost-effective environment,” said Mr. Grey.

UK Trade & Investment today released its UK Inward Investment 2004-5 report in London. In 2004-5, 1066 foreign companies from around the world chose to invest in the UK - a 31 percent increase from the previous year. The investment rate is significantly higher than in recent years, exceeding the last peak of 2000-1. The UK also welcomed around 300 expansion projects, more than ever before.

Investment from Asia-Pacific rose 46 percent to 226 decisions to locate or expand in the UK. China and India were the fastest growing Asian markets in terms of investment into the UK with 37 and 36 projects respectively – record successes again for these markets. Australia’s deep links with the UK were demonstrated, with 42 projects started or expanded.

Major projects from the Asia-Pacific region included:

• China Telecom’s decision to locate its European HQ in London in order to support existing customers overseas while developing its telecoms business in the UK and Europe
  
  
• Midea, the leading home appliance exporter in China, opened its European design centre (its first overseas) in the UK
  
  
• ASIMCO Technologies Ltd, one of the largest independent producers of automotive components (power train and chassis components) in China, set up an operation in Leicestershire to cater to automotive export customers in Europe
  
  
• Huawei Technologies, the biggest telecommunications equipment manufacturer in China, which provides products to over 90 countries and for over 300 operators, chose the UK as its European headquarters

During the 2004-5 financial year, significant investment flowed from Hong Kong such as PCCW’s commitment to provide a broadband network across the UK with an initial capital investment of over US$50million and another US$40million for the commercial roll out of the service. Cheung Kong Infrastructure Holdings acquired Cambridge Water for US$100million and the North of England gas distribution network for US$2.5 billion. The MTR Corporation set up a representative office in London.

The UK’s success in attracting foreign investment highlights its status as the best place in Europe for starting a business. “Our strong, stable economy and our commitment to free trade play an essential part. So does our massive investment in the science base, making the UK an ideal place to conduct research and development,” said Alan Johnson, Secretary of State for Trade and Industry, and Jack Straw, Secretary of State for Foreign and Commonwealth Affairs.

The UK’s scientific and technological know-how are proving a strong pull factor for investment particularly from the Asia-Pacific - its science budget will have more than doubled in real terms to US$6.6 billion by 2007/8 with the Government introducing a number of schemes to improve entrepreneurship in the science sector and incentives encouraging universities to transfer advanced knowledge to the economy.

ENDS

For further information, please contact:

Glenn Schloss
Hill & Knowlton
Tel: (852) 2894 6328
glenn.schloss@hillandknowlton.com

Briony Peters
Hill & Knowlton
Tel: (852) 2894 6214
briony.peters@hillandknlowlton.com

Notes to Editors:

1. UK Trade & Investment is the Government organisation that provides integrated support services for UK companies engaged in overseas trade and foreign businesses focused on the UK as an inward investment location. The principal aim of the Inward Investment Group is to attract, retain and add value to investment by communicating the benefits of the UK as the first choice in Europe for potential investors, and their influencers world-wide. It identifies and approaches potential investors and assists them with all aspects of locating and expanding in the UK.
   
   
2. The ‘UK Inward Investment 2004/5’ report records all inward investment decisions notified to UK Trade & Investment for the financial year 2004/5 by the by the nine English regional development agencies and the national development agencies in Scotland, Wales and Northern Ireland. It includes new investments, expansions, and acquisitions. Acquisitions were independently validated and verified by the UK development agencies.
   
   
3. Copies of the UK Inward Investment 2004/5 report are available in a downloadable format from the UK Trade & Investment website: www.uktradeinvest.gov.uk.
   
   
4. To Download the UKTI Graphs and Charts in PDF format.

TOP 10 INVESTMENT SOURCES FOR 2004/05

PROJECTS 2004/05 - TYPE OF INVESTMENT

TOP 15 SECTORS BY PROJECT

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