LONDON (Reuters) - As its economy stutters, the British government is looking to deep-pocketed Asian investors to keep the motors running.
Foreign companies announced over $8 billion investment in the country on Wednesday, just ahead of a series of summits held by the business ministry that is taking advantage of the London Olympics to attract a roster of international executives and sell the case for investing in Britain.
In a deal that will create more than 900 jobs, the government approved a 4.5 billion pound contract with a consortium led by Japan’s Hitachi to build 92 intercity trains at a newly-built factory in County Durham, northern England.
The Agility consortium, comprising Hitachi and British construction company John Laing, has long been the preferred bidder for the contract.
“We believe it is very important to contribute to job creation in the UK,” said Hitachi Chief Strategy Officer Shinya Mitsudomi at a press briefing in Tokyo.
“We have learned so much about the railroad system from the UK, we felt it would be fitting to return to the birthplace of the railway to return the favour,” Mitsudomi said.
Car manufacturer Jaguar Land Rover, which is owned by India’s Tata Motors, in turn said it would create 1,100 jobs to build new luxury car models at its West Midlands plant.
And another significant Asian investor in Britain, Asia’s richest man Li Ka-Shing, will buy gas transportation and distribution company Wales and Water Utilities for around $1 billion .
Ka-Shing’s companies already own Northumbrian Water, acquired last year, and spent 5.8 billion pounds on UK electricity distribution networks in 2010.
The Global Investment Conference, which begins on Thursday and is described by the government as the largest investment event ever held in Britain, will hope to shore up more of this kind of vote of confidence in British manufacturing.
London’s Science Museum opened an exhibition on Tuesday about British manufacturing called ‘Make it in Great Britain’, backed by the business ministry and seeking to dispel the idea that the country no longer makes goods.
Companies taking part include U.S. firm Coca-Cola, Germany’s Siemens, Canada’s Bombardier - and Britain’s Rolls-Royce.
Britain, which is mired in its second recession in four years, saw GDP slump much more than expected in the second quarter, data showed on Wednesday, piling pressure on the government to come up with ways to get the economy moving again.
Manufacturing, and especially the largely foreign-owned car industry, has been one of the bright spots in the economy, with both Jaguar and Nissan announcing investments this year as auto production has surged, and General Motors choosing in May to build the Astra in the UK rather than Germany.
Additional reporting by Tim Castle in London and Mari Saito and Miki Kayaoka in Tokyo; editing by Stephen Nisbet