Many Chinese ICT companies find base in UK

According to Economy Watch, the country's gross domestic product (GDP) has seen an average annual growth of eight per cent over the past 30 years to reach $3.42 trillion (£1.92 trillion) and the overall economy has expanded by ten times over this period.

In terms of purchasing power parity GDP, the nation is the second largest in the world after the US, with the organisation claiming "most analysts project China to become the largest economy in the world this century using all measures of GDP".

Chinese telecom sector

IT analyst Gartner predicts that this growth will have an impact on China's information and communication technology (ICT) sector. In its Market Trends: Industry Analysis, China, 2004-2009 report, the firm predicts spending in ICT will benefit as sectors such as financial services, manufacturing and communications increase their spending on infrastructure.

Meanwhile, the Market Trends: The Chinese Telecom Industry Ecosystem and Trends study from the analyst suggested: "With a current market size of more than $80 billion, nearly 80 percent of China's spending is on IT ... the Chinese telecom sector is an extremely significant part of the country's IT industry.

Furthermore, the report claimed the country is seeking to become a "global ICT superpower", after seeing its telecom industry grow at a "phenomenal rate" over the past ten years.

China and the UK are taking steps to work together and create benefits for both countries. In an interview with ITN News earlier this year, Prime Minister Gordon Brown said it is important for Britain to build relationship with China in order to help influence its development. Mr Brown also pointed to the "massive expansion" in trade which is occurring between the two nations.

With a current market size of more than $80 billion, nearly 80 percent of China's spending on IT

Market Trends

China

This was further backed up when the Prime Minister visited China in January with a delegation which included Business Secretary John Hutton and Confederation of British Industry Chief Richard Lambert.

During the visit, Mr Brown said he aims to increase two-way trade by 50 per cent by 2010, as well as seeing 100 new Chinese companies invest in the UK. He added: "The importance of China and our growing relationship is absolutely crucial to the success of the global economy as a whole. I'm delighted we are able to move our relationship forward to a new level of cooperation.

Chinese ICT firms are one group which the government hopes will be attracted to invest in the UK.

China Netcom

Britain's information technology sector is one of the world's leaders. UK Trade & Investment (UKTI) points to 2007 research from the World Economic Forum which shows Britain has one of the globe's strongest ICT infrastructures, ranked ninth in the world and ahead of rivals such as Japan, Germany and France.

The department claims the UK has particular strengths in e-business, the availability of broadband and access to Wi-Fi.

entering the UK will "provide secure, stable and smooth communication service guarantee for Chinese enterprises stepping into the global market

Jidong Zhao

China Netcom

Senior Vice President

Factors such as this have already attracted Chinese ICT enterprises to the UK. In 2007, China Netcom launched its first European branch in London. The firm revealed it chose the city because of the close links it has to other telecommunications companies and the opportunities it will provide for international expansion.

Commenting at the time, China Netcom Senior Vice President Jidong Zhao said entering the UK will "provide secure, stable and smooth communication service guarantee for Chinese enterprises stepping into the global market".

Similarly, China Mobile opened their European and Africa headquarters in London earlier this year as part of its global expansion plans. The move, which was assisted by foreign direct investment agency Think London and UKTI, was cited by the agency's chief executive Michael Charlton as an example of the country's ability to benefit international ICT firms.

Mr Charlton commented: "The growing number of high-profile Chinese ICT companies such as China Mobile choosing to locate in London is proof that this multi billion pound technology sector presents huge opportunities for these investors.

He also claimed the city has become the leading European destination for the country, with a third of firms coming to Britain working in the information and communications sector.

With this in mind, Think London has made efforts to encourage more ICT business from China to establish a UK presence. In August, the organisation joined forces with China Netcom to highlight the benefits of investing in Britain.

The two co-hosted a luncheon event for leading Chinese businesses which explained the advantages of London's telecommunications sector and showed the benefits which could be achieved on an international level.

Efforts such as these and the history the UK has had in aiding the Chinese ICT industry are already paying off. Tony Collingridge, Head of the Asia-Pacific team at UKTI, recently told the South China Morning Post that ICT investments from the country have increased from a "negligible number" in the late 1990s to 59 projects by 2007-08.

In addition, he explained that more than 300 firms from the sector now have a base in the UK, with Henry Ge, China Mobile's chief representative for European and Africa business, applauding Britain's "welcoming investment environment".

As the Chinese ICT and telecommunications sectors continue to grow and the UK maintains its strong performance in technology, it looks likely that both nations will come together to reap the benefits.