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China’s buy-up of Britain sees £1bn in dividends flow back to Beijing – The Times – 01.01.23

Arms of Xi Jinping’s state have snapped up stakes in many businesses in recent years. Experts fear the long-term aim is growing economic control for Beijing - by Roberts Watts and Jamie Nimmo.

It is a busy time for Logicor’s warehouses. This low-profile property group owns and manages 170 distribution centres around the UK for Amazon, Marks & Spencer, PrettyLittleThing, DHL and numerous other well-known businesses. After the stampede of Christmas deliveries follows a rush of returns. Logicor’s cavernous “sheds” are teeming with unwanted presents heading back to retailers. But Logicor also deals with a rather different type of return — the hundreds of millions of pounds it hands over to the Chinese state.

For the past five years it has been 60 per cent owned by China Investment Corporation (CIC), Beijing’s sovereign wealth fund. As a result, every time it pays a dividend to investors, tens of millions of pounds flows to Xi Jinping’s authoritarian regime, which wholly owns CIC.

Logicor is one of several large British companies that have together paid out more than £1 billion to CIC over the past five years. Analysis by The Sunday Times today reveals more than 100 big British companies, including Logicor, count the Chinese state as a shareholder.

These investments range from utility companies and other critical national infrastructure to innovative tech firms developing facial recognition technology, robotics and artificial intelligence. Our research investigated the shareholder registers of hundreds of UK public and private companies. We also looked at the ownership of dozens of properties.

In 2021, The Sunday Times compiled the China List, a detailed analysis of more than 200 British assets snapped up by Chinese and Hong Kong-based government agencies, companies and investors, worth more than £135 billion. The updated list, published today, puts the UK assets held by the Chinese state at £45 billion and the total held overall by Chinese and Hong Kong investors at £152 billion.

At the G20 summit in November, Rishi Sunak called China the “biggest state-based threat” to Britain’s economic security. “That is how I think about China,” he said. “That is why I said over the summer that it’s important that we take the powers that we need to defend ourselves.”

The prime minister was alluding to the National Security and Investment Act, a law effective from last January that has been used to block British companies striking deals with Chinese and Hong Kong-based companies on security grounds.

Although the Commons foreign affairs select committee recently urged the government to classify China as a “threat” to national interests, Sunak is trying to pursue a policy of “robust pragmatism” towards Beijing because the UK “simply cannot ignore China’s significance in world affairs”. Disquiet has been growing at the size and scope of investment by the Chinese government agencies and private investors for some years, but this has become stronger over national security fears.

Bob Seely, a Tory member of the committee, said: “The Chinese Communist Party uses economic power for political leverage. China’s policy is to increase western dependency on it, whilst Beijing seeks to become more self-sufficient. We need to engage with China, but we need to be less naïve and more realistic about how we do so. We need to be much more mindful of protecting our interests.”

Alicia Kearns, the Tory MP who chairs the committee, said: “It’s no surprise that China is focused on buying up gas, water, and airports alongside core technologies of the future. We are sleepwalking into the Chinese Communist Party’s dependence trap by failing to adequately protect core industries and national infrastructure. Resilience must be a core ambition of this government, and that starts with a comprehensive audit so we can begin to tackle dependency chokepoints.”

Founded just over a decade ago, Logicor has quickly and quietly become a vital cog in the UK economy. The firm’s presence is everywhere. Amazon leases Logicor buildings near Bristol, the Surrey town of Weybridge and Bardon in Leicestershire. The warehouse giant, which has a head office in London, also has premises in cities including Birmingham, Manchester, Nottingham and Sheffield.

Last February, Logicor paid out €300 million (£260.7 million) in dividends to its shareholders. CIC has banked about £222 million from these payments since taking control of the business. Logicor said it is not simply a British company, adding that around 436 of its premises are located outside the UK and it has a second headquarters in Luxembourg.

For the full 20 page article with charts and more images, please click on this link or click on the link below for a pdf version:

China’s buy-up of Britain sees £1bn in dividends flow back to Beijing News The Sunday Time
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Hundreds of millions of pounds flow from the UK to Xi Jinping’s authoritarian regime. China Investment Corporation has an 8.7 per cent stake in Heathrow airport, though it did not declare any dividends in 2021


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