As China sets its sights on European markets, it has zeroed in on London, the continent’s top international financial center. In October 2015, during Chinese President Xi Jinping’s visit to the United Kingdom, the People’s Bank of China announced that it would begin issuing government debt in yuan there—making the City of London the first place outside of China to offer Chinese sovereign debt. In some ways, China’s turn to the United Kingdom is surprising. After a turbulent shared history, dating from the Opium Wars in the mid-1800s to the British colonization of Hong Kong, which lasted until 1997, the United Kingdom has now become the preferred destination for Chinese investors. Since 2012, China has invested (or signed promises to invest) more than ten billion pounds in the country—more than it invested in the previous 30 years combined.
In the United Kingdom, China has mainly invested in real estate and infrastructure, although it has also dabbled in finance, technology, and higher education. It has acquired brands such as Weetabix, Sunseeker, and PizzaExpress, invested in the airports of Heathrow and Manchester, and, alongside France, helped fund the future nuclear power station of Hinkley Point C in Somerset. The Chinese telecommunications giant Huawei has signed a two-year sponsoring contract with the famous Arsenal Football Club in Holloway. London has, in turn, signed an unprecedented agreement authorizing the largest private bank in China, the China Minsheng Bank, to establish its European headquarters in the city. It has also given the green light to the China Merchants Bank, the third-largest Chinese brokerage house, to establish its first trading platform in Europe.
Until recently, Germany had been China’s preferred investment destination. But the United Kingdom’s dominance in finance, real estate, and higher education has placed it just behind the United States in attractiveness to investors. The English language, the size and liquidity of the