The China Investment Corporation, China's $410bn sovereign wealth fund, has bought a stake in Thames Water. What, if anything, will it mean for the 9 million people in London and the Thames Valley whose water the company provides?
Not a lot, it seems. China has simply bought a 9.9% stake in Kemble Water Holdings, the consortium led by a major Australian investment bank that currently owns our water supply – so no tears to be shed over loss of sovereignty over our most precious commodity. Nor will the money actually go into Thames Water finances or infrastructure - it's just a small deal between investors. So no offsetting of the likely rise in Thames Water bills come the spring – up to 4.6% above inflation – or of the costs of replacing London's ageing Victorian water mains, or even of the projected £3.6 billion of the company's controversial Thames Tunnel Super Sewer, currently in consultation.
So why the excitement? Well, with China's economy expected to grow by 8.9% this year, Britain's financiers are desperate to get their hands on some of that lovely lolly – hence Chancellor George Osborne is just back from a trip to China aimed at persuading Beijing to invest in Britain's infrastructure. And some analysts are predicting that China dipping its toe into the water market, coming so soon as it does after an agreement on the UK’s role as an offshore trading centre for the renminbi, might be a first step to getting those plans afloat. Then again, in 2002, Thames Water bought its own 48% stake in the China Water Company, before selling it on five years later. What goes around comes around – much like the water itself.
The photograph from free-wallpaper-art is used under a Creative Commons licence.
