Phillip Bosworth (right), export sales manager of Standen, a British farming equipment manufacturer, gives Zhou Xiaoming a tour of his company. [Photo by Cecily Liu/China Daily Europe]

Chinese companies are making great progress expanding into the UK despite obvious challenges, says Zhou Xiaoming, minister counselor with the economic and commercial office at the Chinese embassy in London.

These challenges relate to both Chinese companies' need to operate in a new environment against fierce competition from local and other international companies, and regulatory challenges such as the difficulty of obtaining visas for Chinese employees.

"There is already a lot of fast growing Chinese companies in the UK, but more potential exist," says Zhou, who assumed his current office in December 2009 and has witnessed the tremendous growth of Chinese companies in the UK for the past five years.

Using the Industrial and Commercial Bank of China as an example, Zhou says considering that ICBC is the largest bank globally by market value, the bank's activity in the UK is relatively small.

Likewise, some Chinese insurance companies are very large in China and globally, but their activities in the UK have just started to grow, Zhou says.

"I think this relates to the stage of development China is in, because in the past China is a net receiver of foreign investment, but it's only in recent time that China is seeing an increasing amount of outbound investment," he says.

When investing in the UK, getting used to the local legal and business environment is important, and one challenge Chinese companies often voice is obtaining the right visa for their workers, Zhou says.

As many Chinese companies wish to hire Chinese workers for ease of communication, they find it a big challenge to secure visas for their workers because the annual limit of non-EU workers entering the UK is 20,700, which makes the application process very competitive.

Another way to employ Chinese workers in the UK operation is by bringing in staff members from the company's China headquarters, through the inter-company transfer route.

But the ICT route can only be used to bring in staff members earning a base salary of 24,500 pounds ($39,000) or more, and only those earning more than 41,000 pounds can work in the UK as long term employees.

Zhou says he has helped Chinese companies to voice the visa challenge concerns with the British government already, although actual changes to policy are difficult to result.

"Many Chinese companies believe the visa issue is restricting their growth. I think their voice should be heard because Chinese investment creates a lot of employment opportunities for British local workers and it would be a shame if their growth is limited by visa restrictions," he says.

Zhou says Chinese companies are right in pointing out that some job functions facilitate communication between their headquarters and the UK subsidiary, so would be more suitably filled by Chinese workers.

In addition, in reality many Chinese companies actually do have British workers forming the majority of their work force, says Zhou, citing Bank of China and the telecommunications service company Huawei as examples.

Chinese investment in the UK grew significantly over the past few years in financial services, telecommunications and brands, Zhou says.

For example, Huawei in 2012 has promised to increase its workforce in the UK from the then 800 to 1,500 by 2017, with an additional investment of 1.2 billion pounds. It was a commitment greatly welcomed and supported by the British Prime Minister David Cameron.

Zhou also lauded Huawei's investment in the UK, particularly the research and development work the company has invested in.

In 2012, Huawei acquired the Centre for Integrated Photonics Ltd (CIP), a world-leading photonics research laboratory, which helped the company to boost its research strength. Huawei also cooperates with Imperial College London, a leading university, for research.