China makes millions from UK asylum hotels

Chinese interests own more than £190 billion in British companies and property and Beijing is making millions a year from asylum hotels, analysis reveals.

The Sunday Times China List discloses that organisations linked to the Chinese Communist Party own three hotels block-booked for migrants, netting them at least £15 million in Home Office contracts.

They are just some of the 442 UK assets owned by private individuals and firms from China and Hong Kong, as well as state-backed organisations.

Their value has risen to £190 billion from £134 billion in 2021 and £152 billion in 2023. Some of the long-held investments — which range from nuclear power stations and water companies — have shot up in value, while others have been newly bought or uncovered.

Of the total, about £51.3 billion of assets are owned by organisations linked to the Chinese government, including the former site of the Royal Mint in London, which is earmarked for China’s new embassy.

Plans for the new Chinese embassy in London

DAVID CHIPPERFIELD ARCHITECTS

The research, compiled using share prices, company valuations and publicly available accounts, found that the Chinese own:
● Large tracts of our national infrastructure including stakes in Heathrow airport, water companies, wind farms and power networks.

● 28 independent schools including Plymouth College, once attended by the Olympic champion Tom Daley, and the 741-year-old Ruthin School in north Wales.

● A giant warehouse group that has paid the Chinese state about £250 million in dividends.

● £92.4 billion of shares in FTSE-listed companies.

Keen to attract new investment, both Rachel Reeves, the chancellor, and David Lammy, when he was foreign secretary, have visited Beijing in the past year.

China has been described by Anne Keast-Butler, director of GCHQ, as an “epoch-defining and systemic challenge” to national security, prosperity and international order.

In the past fortnight, the government has been accused of putting the UK’s economic interests with China first, after spying charges were dropped against Chris Cash and Christopher Berry. Both have denied wrongdoing. The case collapsed over the government’s failure to brand Beijing a threat.

Last week, during a debate in the House of Commons after an urgent question on the alleged spying case, the security minister, Dan Jarvis, was asked about the threat to energy and national security from Chinese-owned businesses.

Jarvis said that the UK’s relationship with China was complex. “Where we are able to co-operate economically where it is in our national interest to do so, we should proceed, but we should proceed with a clear set of principles that underpin that,” he said. “Fundamentally, our national security comes first.”

• China’s hold on UK infrastructure — from nuclear power to Heathrow

Dame Priti Patel, the shadow foreign secretary, told The Sunday Times: “Labour are bending over backwards to appease Beijing. Having wrecked our economy, they are now going begging abroad, putting our economic and national security up for sale to the highest bidder.”

Last year the government completed a China audit, parts of which were incorporated into a national security strategy published in June. However, the audit itself remains classified.

In response, the Inter-Parliamentary Alliance on China produced its own audit on the UK-China bilateral relationship which has been seen by The Sunday Times, though is yet to be published.

The report found: “Trade between the UK and China can no longer be regarded as a neutral or purely commercial space. Instead, it increasingly reflects strategic competition, national security concerns, and contested norms around governance and technology. For the UK the central challenge lies in maintaining relevance … while safeguarding resilience at home.”

The report also found that China was starting to dictate terms in critical areas such as renewable technology and electric vehicles.

Evan Fowler of the IPAC added: “It is wrong to presume that China presents a choice between security and economic opportunity. China understands governments need to prioritise security. Weakness isn’t a sign of trust or friendship, but naivety. Similarly, investment and business opportunities exist regardless of the warmth of diplomatic rhetoric.”

What’s in the Chinese state’s £51bn stake

The China List analysis shows how the acquisitions of business do not merely give the Chinese government power, they also deliver handsome returns for President Xi’s regime through rising asset values and dividends.

The £51.3 billion in assets owned by the Chinese state include:

Hinkley Point C: The state-owned China General Nuclear Power Group (CGN) owns 27.4 per cent of the nuclear power station under construction on the Somerset coastline. Although the project’s costs have ballooned to £48 billion, CGN has been reluctant to inject more investment after being frozen out of other nuclear projects by the British government on national security grounds. CGN’s Hinkley Point C stake is worth £13.2 billion — making it Beijing’s most valuable UK investment.

Heathrow: The China Investment Corporation (CIC), Beijing’s sovereign wealth fund, owns 8.7 per cent of the UK’s busiest airport. Heathrow’s latest official valuation suggests this stake is worth more than £2 billion — an increase of more than £400 million since the 2023 China List.

Thames Water: CIC’s 9 per cent stake in Thames Water has a value of £1.8 billion, according to the utility’s latest accounts. The CIC also owns a 10.5 per cent holding in Cadent Gas worth £1.3 billion.

UPP: One of the UK’s largest developers of university accommodation, this London-based property firm is 40 per cent-owned by an arm of China’s central bank called the State Administration of Foreign Exchange (Safe). UPP, which has developments at universities including London, Exeter and Nottingham, owns property with a value of almost £1.6 billion. Safe’s subsidiary Gingko Tree Investment has a stake in UPP worth £632 million and holdings in shopping centres in York and Leicester.

London property: The Beijing government spent £255 million to buy Royal Mint Court and intends to build a new embassy on the five-and-a-half-acre site. Steve Reed, the housing secretary, was expected to announce this month whether the scheme would be approved but the decision has been pushed back to December. Elsewhere in the capital, arms of the Beijing state own office blocks, residential developments and other property worth more than £2 billion.

Inch Cape Offshore wind farm: With more than 70 turbines, this project is expected to generate enough energy to power more than half of Scotland’s homes when it is completed in 2027.

Inch Cape is 50 per cent owned by State Development and Investment Corporation (SDIC), another arm of the Chinese state. SDIC’s stake in the project is worth £1.75 billion. At least seven other onshore and offshore wind farms in England and Scotland are part-owned by wings of the Beijing government, the China List shows.

Asylum jackpot

The three asylum hotels are owned by the firms Kew Green Hotels and Campanile. Kew Green, based in the London borough of Richmond upon Thames, owns and manages more than 60 premises, many under the Holiday Inn brand. The £300 million business is ultimately and wholly owned by the Beijing government through its China Tourism Group Corporation, a body set up to promote China to the world.

Of its portfolio, the Holiday Inns in Warrington, Cheshire, and Ashford, Kent, are both block-booked to house asylum seekers and were subjected to protests in August. Analysis of their accounts suggest they have made about £15 million from the Home Office contracts.

A protest in August at the Holiday Inn in Ashford, Kent

GARETH FULLER/PA

Kew Green’s three-star hotel in Ashford, a converted 17th-century barn, made profits of £1.4 million on revenues of £3 million in 2024. The Warrington hotel, a four-star venue billed as a “contemporary hotel … situated central to the hustle and bustle of Liverpool and Manchester”, has generated turnover of £2.7 million in the same year.

Campanile, which is owned by the Shanghai municipal people’s government, owns a three-star hotel in Cardiff which has housed asylum seekers since 2022.

Kew Green was approached for comment.

Strong returns

In purely financial terms, one of the Chinese government’s most valuable UK investments is the logistics company Logicor, a crucial cog of the digital economy that owns 176 distribution centres.

About 60 per cent of the company is owned by the CIC, the sovereign wealth fund set up in 2007 to generate strong returns for Beijing’s vast foreign exchange reserves. The fund’s investments are scattered around the world with a value of around £1 trillion. CIC is led by Zhang Qingsong, who has spent decades working in senior roles in the Chinese state. He previously served as deputy governor of the People’s Bank of China.

Financial statements published by Logicor show the business paid out £40 million to its investors last year and another £18 million in February. CIC’s cut of these payments should have been £34.8 million, on top of £222 million paid out in earlier years.

In addition, the Chinese state has bought shares in companies listed on the London stock exchange. Its central bank owns shares in FTSE 100 companies with a combined value of more than £11.9 billion.

This includes stakes worth £2.1 billion and £901 million in the oil giants Shell and BP as well as a £484 million holding in the global mining company Rio Tinto, plus a chunk of the pharmaceutical behemoth AstraZeneca worth £1.1 billion.

• AstraZeneca strikes multibillion-dollar research deal with Chinese group

Analysis of shareholder registers by the data provider Argus Vickers reveals the sovereign wealth fund of Hong Kong, subject to China’s rule for 28 years, owns FTSE 100 shares worth nearly £1.5 billion. The National Council for Social Security Fund and the National Pension Services — both state-owned retirement funds — have holdings worth £287 million and £94 million in FTSE 100 firms.

Susan Baldry, managing director of Argus Vickers, said: “Our analysis of shareholder registers shows that shares worth at least £92 billion are now owned by China or Hong Kong-based investors. However, the real number may be even higher.

“That’s because about 300 companies listed on the London stock market, including nine of the FTSE 100, are not domiciled in the UK and therefore do not have to publish a register showing who their owners are. This lack of transparency may present national security and governance risks, particularly when foreign state-linked investors are involved.”

Skyscrapers, schools and sport

The China List includes nearly £139.2 billion of assets owned by private companies and people based in China and Hong Kong. Many of them may not support Xi or his policies. Their investments range from vast residential property developments and shopping arcades to video-game studios and pharmaceutical firms.

They also include a stake of about 50 per cent in Clarks shoes, the car brand Lotus, Wolverhampton Wanderers Football Club and Wentworth Golf Club in Surrey.

The Premier League club Wolverhampton Wanderers are part owned by Guo Guangchang, Liang Xinjun and Wang Qunbin

WOLVERHAMPTON WANDERERS FC

Born in the southwestern city of Chongqing, Cheung Chung-kiu owns swathes of London property, including the 52-floor Leadenhall Building. Better known as “the Cheesegrater”, the tower block has delivered rental cheques totalling £42.1 million over the past year.

The “Walkie Talkie”, another famous fixture on the City skyline, garners £46 million a year of rent for Lee Kum Kee Group, the Hong Kong-based food manufacturer owned by the Lee family.

There are 28 private schools owned by Chinese investors. Last year Phil Brickell, a Labour MP who sits on the Commons foreign affairs committee, said that Britain’s “world-leading education system is an obvious target for influence” for China and “should be protected accordingly”.

Labour’s introduction of VAT on private school fees has increased the attractiveness of institutions to Chinese investors because it could lead to more schools requiring financial support.

China represents the biggest source of non-British pupils whose parents live overseas and accounts for 6,258 of the 25,526 pupils in this category, according to the Independent Schools Council census published in April, an increase from 5,824 the year before.

Dynamic CCTV is one of many retailers to appear in the list of assets owned by China. The business, based in Middlesbrough, sells security cameras and alarms, and has “the UK’s largest Hikvision stock holding”.

With headquarters in Hangzhou, Hikvision has already proved controversial in the UK because its surveillance equipment has been installed in the Uighur “re-education camps” operated by Xi’s regime. The company has been sanctioned by the US for more than five years and has been flagged as a security concern by the UK government.

Dynamic CCTV is owned by Hangzhou Yipai Import and Export Trade Company, an operation based in China’s eastern Zhejiang region, and continues to sell Hikvision products in the UK.

Political influence

Of all the Chinese families and individuals who invest in the UK, none has more British business interests than Li Ka-shing. A secondary school dropout and former factory worker, the Chinese-born billionaire began his entrepreneurial career in Hong Kong in the 1950s by selling plastic flowers.

Li’s investments here range from the Greene King pub and brewing group to critical power and gas networks.

The 97-year-old tycoon and his family own 75 per cent of Northumbria Water and nearly half of VodafoneThree, the telecoms goliath. Superdrug, Savers and The Perfume Shop are also part of Li’s CK Hutchison group.

Li Ka-shing

REUTERS/REUTERS

The data centre operator Global Switch, an integral part of the UK’s digital infrastructure, is another of his holdings. Li is reportedly considering a sale of Eversholt Rail, a company that makes hundreds of millions of pounds a year by leasing carriages and locomotives to train operators. He bought the outfit for £2.5 billion in 2015 and a sale price of £4 billion has been mooted.

Li’s relationship with the Chinese state is complex. He served on committees paving the way for China’s takeover of Hong Kong and, more recently, the body that selects the province’s chief executive. His elder son, Victor Li, 61, is a member of the Beijing municipal committee of the Chinese People’s Political Consultative Conference — an advisory body to the government.

However, Beijing was enraged by the family’s sale of two Panama ports this year. It urged CK Hutchison to “think twice” about “what position and side they are on”, later ordering state-owned companies to stall new contracts with the Lis’ companies. Beijing regulators were also ordered to conduct an audit of the family’s investments at home and abroad.

No Chinese or Hong Kong company is ringfenced from Xi’s regime. There is a legal duty for all Chinese companies to follow the state’s instructions when required.

Tug of war

Some Chinese businessmen with a UK presence have more explicit ties with their homeland’s communist administration.

In 2020 British Steel, the owner of the UK’s only manufacturer of rail and large steel sections, was snapped up by Jingye Group. This Beijing-based industrial group is owned by Li Ganpo, a former teacher who served as a communist party official for nearly 15 years.

The 76-year-old also served as a representative in the National People’s Congress — China’s rubber-stamp parliament. Jingye pledged to pour £1.2 billion of investment into British Steel. The buyer’s chief executive, Li Hiuming, declared this was “the beginning of a new illustrious chapter” in the history of British steelmaking.

Three thousand jobs were saved and there was even talk of British Steel becoming a giant of European industry. Yet Jingye’s tenure has been beset with problems and the Chinese owner is now in legal dispute after the government drove through emergency legislation that allowed it to seize control of British Steel’s plant to ensure the furnaces could be kept going.

There were concerns by MPs and trade union leaders that Jingye might be deliberately setting out to sabotage the Scunthorpe plant and thereby make the UK more dependent on Chinese imports.

Sir Keir Starmer at the Scunthorpe steelworks with Ed Miliband

IAN FORSYTH/GETTY IMAGES

Jonathan Reynolds, business secretary at the time, added that previous governments had been “far too naive” about trade with China, adding that Chinese firms would no longer be welcome investors in the steel industry.

Beijing’s embassy issued a statement saying that Jingye was a private Chinese company that “conducts operations on its own”.

The accountancy group EY is managing the Scunthorpe site on behalf of the government. Negotiations between London and Beijing remain tense. Jingye has put a price of at least £1 billion on ceding legal control of British Steel.

However, in an indication of how blurred the lines between the Chinese state and private sectors have become in China, the owners of Jingye have apparently said they would be willing to waive the £1 billion if Starmer’s government approved the new London embassy.