Toxic Debt at Home Makes Chinese Firms Secure UK Assets

Overview

All around good news for China as optimism among business owners have increased towards the end of the 3rd quarter. Furthermore, Chinese state owned firm CGN has announced it is going to help fund and design a new nuclear power plant in the United Kingdom.

Article Highlights

  • Business Confidence Increasing Among Business Owners
  • CGN Agree Nuclear Power Agreement
  • China Still Expected To Hit Growth Targets

Good news all around for the China business world as confidence seems to be rising among companies and entrepreneurs alike. According to China’s Central Bank the business confidence index rose up to 51.2% in the third quarter. The index is a measure used by the bank to indicate the amount of optimism by managers and workers about their company’s general outlook.

While the economy has been a little sluggish over the course of the year, owing due to a period of change, latest news suggests positivity. Retail sales grew above expectations for the month of August, as did factory output levels. These areas have been helped by consistent government spending on infrastructure as well as a strong housing market.

Nuclear Power

Official government expectations are still on track to be met, with the International Monetary Fund (IMF) suggesting a 6.6% growth in the nations GDP, in line with the 6.5-7% target originally set. The country has also hit international headlines around the world following the state firm CGN committing around $8bn to help build a nuclear power station in the UK. However, the firm is not only providing a third of the overall investment, they have been awarded exclusive rights to design the reactor for the plant. This continues to show the advancements being made by China, and while the country has made its name on cheap exports, shows the countries specialized capabilities.

The deal agreed may also help further the relations between the UK and China. With the uncertainty surrounding the UK considering its exit from the EU, the country may be an attractive trading partner for China. While many experts suggested the relationship between the countries was a way for China to get access to the overall EU market, this move should be one of many to come which suggest otherwise.

CGN have already confirmed they continue their interest in another site planned by the UK for a nuclear power plant. While this current agreement has gone through turbulent times with many stops and starts, CGN is optimistic further agreements will happen more quickly. Others disagree though, with a decade being seen as a reasonable timeframe before any construction begins.

It is the continued frequency of moves by Chinese companies entering into international markets that is really starting to make waves. The sheer size and power of the Chinese economy has enabled the country to strategically set up positions in other countries. While the UK government balked at the sheer cost of a new power station, Chinese firms may continue to provide investment in other countries who are unwilling to pay themselves.

While many are questioning the long term sustainability of the growth seen throughout China, there is no doubt that the country will make its mark internationally. It is true growth is beginning to slow down, but the changing basis of the economy may open up new areas which can revive the currently stuttering situation. As many other economies globally are still feeling the strain follow the financial crisis and shortly after Eurozone crisis, China continues to be the flame that burning

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