Targets pursued despite Brexit uncertainties

At a state-of-the-art laboratory in Lincolnshire, eastern England, a group of Chinese and British engineers are enthusiastically discussing the development of the next generation insulated-gate bipolar transistor, which helps run, among other things, high-speed trains

The laboratory is owned by Dynex, a 63-year-old company that in the 20th century was Britain's biggest high-voltage semiconductor maker before going into decline amid the global financial crisis in 2008.

Dynex was rescued after being acquired by Chinese train manufacturer CRRC Corp through its subsidiary CRRC Times Electric. This has resulted in a decade of investment to improve Dynex's expertise in manufacturing and research and development.

Despite uncertainties over Brexit, Dynex and CRRC have invested $10 million to $12 million annually in the R&D center in Lincolnshire, with the latest components being used in CRRC trains.

CRRC and Dynex are also jointly investing in a new innovation center in the English city of Birmingham this year to develop chips for use in the huge electric car market in China and internationally. The center aims to employ 100 engineers this year, with the number to rise to 200 to 300 in the next few years.

CRRC's financial strategy provides a snapshot of continued Chinese investment in the United Kingdom, driven by companies' desire to seek technological know-how, brands and new markets.

Latest statistics compiled by law firm Baker McKenzie and research company the Rhodium Group show that the UK was the largest recipient of Chinese outbound foreign direct investment last year, surpassing the United States, which has historically been the biggest recipient.

According to the joint report, last year, Chinese outbound FDI in the UK stood at $4.94 billion, followed by $4.8 billion in the US and $4.05 billion in Sweden. However, these figures are much lower than Chinese outbound investment in 2017, due to turbulence in the global economy throughout last year triggered by trade tensions and political uncertainties.

The report defines FDI as "all organic expansion investments and those that result in ownership control of at least 10 percent in the target firm".

Although official figures on China's outbound investment last year are still to be released by the central government, the report highlights a trend in which Chinese investors are committed to the UK market, and analysts expect this to intensify.