Mayor seeks Chinese money to remake London
BEIJING, Oct. 13 -- London Mayor Boris Johnson and his business delegation arrived in Beijing Sunday, kicking off a campaign to lure Chinese sovereign funds, banks and developers to fund an overhaul of the British capital in the years to come.
"Our mayor's interest is about new infrastructure," said Gordon Innes, chief executive officer of London and Partners, the official promotional organization for the city.
"The mayor identified 33 areas across the city where we will be intensifying the density of house and putting in new infrastructure," he said.
During its six-day trip in China, the delegation will meet China's foreign exchange regulator and the nation's sovereign wealth fund China International Corporation (CIC) to discuss funding for Chinese developer's investment in London's urban regeneration projects.
China's State Administration of Foreign Exchange (SAFE) has invested in the city's property market, while CIC have been involved in a number deals to acquire offices and apartments in the city.
"The message is that London is welcoming and open to development for SAFE, CIC and other institutional investors from China," Innes said, adding that infrastructure and property development is a key priority for the London government.
Chinese companies have made several high-profile deals in London. Chinese developer Advanced Business Parks (ABP) recently invested 1 billion pounds (1.59 billion U.S. dollars) to redevelop Royal Albert Dock. Zhong Rong Group invested 500 million pounds to rebuild the Crystal Palace.
China's largest commercial property developer Dalian Wanda Group also stuck a 1.08-billion-U.S. dollar deal in June to build its first overseas luxury hotel at a prime location in the city.
Chinese investment in Britain rose to 4 billion U.S. dollars in 2012, up 80 percent from a year ago, with London being the destination of 60 percent of China outbound direct investment in the United Kingdom.
At least part of these ambitious projects have to be financed by loans from banks. The delegation will also hold talks with the Bank of China and the Shanghai Pudong Development Bank, in a bid to present these deals to Chinese banks as a "good bet on investment."
"The discussion will be about making sure these banks look at London from an investment point of view, as they will be financing quite a lot of investments we hope in London over the years to come," said Kit Malthouse, London's Deputy Mayor for Business and Enterprise.
Malthouse said that as with a population growth of a million every ten years, London's growth comes with problems in housing, jobs, offices, science and manufacturing.
The city thus needs to "attract lots and lots of capital to come in and help us solve these problems," the deputy mayor said.
The delegation also intends to expand existing trade and investment cooperation to other industries, with life sciences likely to be the next industry to see massive Chinese investment.
"What we want to do is to make sure when Chinese organizations think about overseas investment, they have London on their radar," Malthouse said.