China’s sovereign wealth fund has bought a share in Thames Water holding company Kemble Water.

The state-run investment corporation snapped up 8.7% of the country’s biggest water firm in what is thought to be its first purchase in the UK.

It follows a bid by George Osborne to encourage closer business ties between the UK and China.

The Chancellor recently visited Beijing in an effort to forge a stronger relationship with investors in the country.

Another overseas fund, the Abu Dhabi Investment Authority, bought 9.9% of Kemble in December last year.

The company is owned by a consortium of investors, led by Australian bank Macquarie. It provides water and sewerage services to millions of customers in London and the South East.

New pricing rules imposed by industry regulator Ofwat saw
Thames Water’s profits slump by more than half to £208.5 million in the year to the end of March.