London’s £40bn growth invite to international business

The 2012 is just the start of the city’s growth, with a projected growth of 40 billion pounds in the London economy over the next four years.

Think London, the foreign direct-investment agency for the capital, says the growth of key sectors in London’s economy and that of its population mean that now more than ever there is a demand for investment in infrastructure.

London is growing

London has cemented its position as a leading global financial centre. It is also growing at an extraordinary rate - by 2016 an estimated 800,000 more people will be living in the city and its surrounding areas.

To accommodate people, the businesses and public services London will need an unprecedented programme of regeneration, which will transform the landscape. In the summer of 2012, up to four billion people will have their eyes on London, as it plays host to the Olympic Games and Paralympic Games.

The growth in the economy over the next four years will offer huge opportunities for international companies looking to globalise and invest in the capital. Investment in the Games has been an excellent way for foreign firms to establish or grow their presence in new international markets.

The Thames Gateway, an area of land stretching 60 kilometres (40 miles) east from inner London, is the largest regeneration project in Europe and is undergoing major transformation and significant private and public-sector investment.

London truly is a world city, occupying a unique position on the world stage

Sarah Ebjana

Deputy Chief Executive

London Development Agency

Up to now, the UK Government has spent seven billion pounds in investment in the Gateway with plans to create 160,000 homes and 180,000 jobs.

The Gateway is home to Canary Wharf, a thriving hub of multinational financial and business service companies as well as the site for the London 2012 Olympic and Paralympic Games.

Once successfully regenerated, this area alone could contribute an extra 12bn pounds a year to the UK economy.

In addition to this, the new Crossrail scheme will ensure that the city maintains its status as a hub of international activity well into the 21st century.

The service will significantly increase the capacity of the rail network into and across the capital, thereby relieving congestion and cutting journey times between key business areas and London Heathrow by up to 40 per cent.

Crossrail is expected to attract some 80,000 additional jobs to regeneration areas and is scheduled to be up and running by 2017. The network is estimated to bring GDP benefits of at least 36bn pounds.

London in 2012

Talking recently at seminar held by the London Development Agency (LDA) and the Cavendish Group for international businesses in Beijing, Sarah Ebjana, LDA Deputy Chief Executive, said: “London truly is a world city, occupying a unique position on the world stage. It offers unrivalled access to international markets and talent, and a business environment that facilitates growth.”

Diao Chunhe, Chairman of the China International Contractors Association, commented: “Chinese companies are really looking forward to much more opportunities in London after a successful year of 2007 that China-to-UK contracting value has reached over 100m pounds. We believe that the 2012 Games will attract high interest from Chinese companies who have done a great job in the 2008 Beijing Olympic Games.”

The UK capital’s strength as a financial centre is a major attraction for international investors. Michael Charlton, Chief Executive of Think London, said: “London is the leading global financial services centre and the single most internationally focused financial marketplace, with every major bank and financial institution in the world having a presence.”

Chinese companies are really looking forward to much more opportunities in London after a successful year of 2007 that China-to-UK contracting value has reached over 100m pounds

Diao Chunhe

Chairman

China International Contractors Association

“Chinese firms are now recognising the open approach of London and using the UK’s capital as a natural step to globalise their businesses,” Charlton added.

Since 2000, for example, Think London has assisted more than 60 Chinese companies in moving their European operations to the UK capital.

Madam Zhang Yanling, Vice-President of the Bank of China (BOC), said: “Bank of China was formally established in 1912, it is one of the oldest and most internationalised commercial banks in China. London Branch is our first overseas operation, and next year it will celebrate its 80 years anniversary.”

“Now, the branch has offices in the West End of London, Manchester, Glasgow and Birmingham. Last year, the UK Financial Services Authority approved the establishment of the Bank of China (UK) Limited. A few days ago, the UK subsidiary successfully purchased 30 per cent of the share capital of Heritage Fund Management in Geneva which further extends it business in continental Europe” she added.

The Mayor of London, Boris Johnson, said: “London is the world’s leading financial centre expected to see significant growth in the coming years. With major improvements to our transport infrastructure planned over the next decade - including Crossrail connecting Heathrow airport in the west with the City [financial sector] in the east - London will be one of the best connected cities in the world.”

The capital has the largest foreign exchange market in the world, with an average daily turnover of 2,096bn dollars, or 32 per cent of the global market; accounting for more than New York and Tokyo combined.

The city is also home to the world’s largest fund management centre, with more than seven trillion dollars of funds under management, 25 per cent of which come from abroad.

As the focal point for the UK venture capital market (the largest and most developed in Europe), London accounts for more than a quarter of the world’s private equity investment; and this is second only to the United States.

The city is also the market of choice for international firms raising capital. There are currently 20 Chinese and Hong Kong SAR companies listed, and traded, on the main market of the London Stock Exchange with a further 68 firms trading on the AIM, the market for smaller fast growing companies.

London is the world’s leading financial centre expected to see significant growth in the coming years

Boris Johnson

The Mayor of London

Think London has just had its most successful year to date, smashing targets on all fronts. Job creation increased 65 per cent with a record number of 178 international investors expanding or establishing businesses, bringing 6,152 new jobs to the capital in 2007/8.

The US remained the largest investor, creating nearly half the total number of jobs (2,739), followed by India (825). Over the past four years, Think London has assisted 67 Indian companies to set up and expand in London.

Trade between the UK and Germany is the largest of all EU member countries, and France and the Netherlands are also major investors.

Tokyo is looking to host the Games in 2016 and is among those who see London as the perfect springboard for businesses looking to go global, with fast access to a range of customers, markets, ideas and finance.

The UK attracts about a third of all Japanese foreign direct investment into Europe, and London accounts for one in six of these investments. Think London has assisted 40 Japanese companies to establish and grow their operations in the capital since 2003.

London’s business incubator service, Touchdown London, has launched in India, China, Mexico and Brazil, offering companies a dedicated start-up service to provide businesses with a “soft landing” in the capital, including subsidised office space and a range of support services.