China owns vast network of UK real estate, offshore records reveal | China


The Chinese government owns a vast network of British property via offshore secrecy jurisdictions such as Luxembourg and the Isle of Man, the Guardian can reveal, raising questions about Beijing’s grip on links in the UK supply chain.

Disclosures made as part of a new government register of property owned by foreign entities show China’s investment arm owns more than 250 properties across Britain via dozens of companies. These include distribution centers that are key to the flow of food and goods in various regions of the UK, including the south west and south east of England and the Midlands.

The properties are ultimately all owned by the China Investment Corporation (CIC), which manages the foreign exchange reserves of the People’s Republic of China and is estimated to have more than £970 billion in assets.

Land Registry records suggest that CIC spent at least £580 million on UK properties, although the true figure is likely to be significantly higher because some records are incomplete. While CIC was known as an investor in UK property, the scale and detail of its purchases remained hidden until now due to the use of a wide range of foreign companies.

The register, which revealed the details, indicates that CIC has focused on distribution depots, retail parks and commercial estates, including some critical to regional infrastructure.

Quick guide

UK for sale: reporting on the register of overseas entities


The UK government’s new register of overseas entities has been created to improve transparency around UK property ownership and help the authorities ensure that the right amount of tax is paid. The ownership of property by foreign companies is legal. Owners of property through offshore companies may do so for many reasons, from tax benefits to privacy or liking the stability or simplicity of a certain offshore tax regime. In the words of the government, foreign taxes are “complex”.

But ministers have concluded that transparency around foreign ownership of UK property is an important step towards improving the workings of the tax system. “While the vast majority of people and businesses pay the right amount of tax, mistakes are made,” the government said in its explanation of why the register was introduced. The register of overseas entities appears to be a big step forward in transparency, with thousands of owners, including those reported on by the Guardian, coming forward to declare their properties. All those named as beneficial owners on the register have fulfilled their legal obligations to declare their ownership. Around a quarter of the companies that have filed declarations so far still do not publicly disclose their ownership, because trusts are only required to give information about their beneficiaries to the tax authorities.

The Guardian has previously reported on foreign ownership of companies through leaks such as the Paradise papers and the Pandora papers, which have led governments, including the UK government, to apply greater scrutiny to international tax affairs and offshore secrecy. The Guardian believes that shining a light on UK property held by foreign and offshore firms by the wealthy, politically connected and influential increases that process of transparency and enables readers to see the power structures that shape their daily lives. influence, better understand.

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Chinese investment in the UK has been a source of concern and division within the government. Some MPs welcomed the flow of cash into Britain, while others raised security concerns about the role China and Chinese companies play in strategic assets.

In 2020, the government ordered telecoms company Huawei to be removed from Britain’s 5G mobile phone infrastructure by 2027, a decision Beijing described as “baseless”. The government has also scrapped plans for China General Nuclear to be involved in building a new nuclear power plant and is buying CGN out of its stake in the planned Sizewell C project.

Former Conservative leader Iain Duncan Smith said it was worrying that so much of the investment by foreign companies was “disguised”. He drew comparisons to the attempted takeover of British technology company Newport Wafer Fab, which initially appeared to be the target of a Dutch company before its eventual Chinese ownership was revealed. The government eventually blocked the deal on security grounds.

“You sometimes have to go back several links to discover who actually owns the company,” says Duncan Smith, who chairs the international Inter-Parliamentary Alliance on China.

“If they can buy that much, all of which sound like important parts of the supply chain, it begs the question of why they’re doing it. This makes the case that we now need to have a strategic audit of the total amount of Chinese finance within key UK areas including universities, technology and supply chains. We are far too open to the interests of Chinese companies.”

CIC and the Chinese Embassy did not return requests for comment.