Business delegates from across the East of England attended a focused event hosted by UK Trade & Investment (UKTI) and the China-Britain Business Council (CBBC) last week, The Moller Centre, Cambridge  to hear about how, during such economic uncertainty, they can expand and enhance their operations by capitalising on the continued growth of China’s economy. 

Entitled ‘East meets East - Think China, Act Regional’ the seminar, one of a series taking place across the country, presented delegates with the finding of a recently published UKTI/CBBC report entitled ‘Opportunities for UK Businesses in China’s Regional Cities’.  

The event forms part of the ‘East meets East’ campaign, created to provide regional businesses with specific information, support and guidance to enable them to exploit new business opportunities in China.   

Key speakers included Mr Chen Wu, Assistant Director, Research and Consultancy at  CBBC, who is the principal author of the Chinese Regional Cities Report.  Talking about the research Mr Wu told delegates: “Traditionally, business interest from UK companies has generally focused on a small number of large established cities such as Beijing, Shanghai, Shenzhen and Guangzhou. However, these markets are maturing, competition is intensifying and factor input costs (especially in relation to labour and land) are increasing.

“Our research aims to prompt companies to consider alternative locations in China for business expansion and development, outlining 35 of 274 municipalities in China with a population in excess of one million as being attractive targets for UK business development on the basis of their economic size, growth rate and population. 

“In our report these cities are ranked and grouped in terms of the general business environment they offer, and their attractiveness for four different types of business activities, namely local sales, production to supply domestic markets, production to supply export markets, and research and development activity.” 

Delegates also heard informative insights from Essex County Council’s Peter Manning, who for the last four years has worked to promote Essex-China trade, education and cultural links in the Jiangsu province.  In his presentation Mr Manning shared with delegates a number of key success factors they must acknowledge in order to thrive in China – namely understanding the market first hand (concentrating on the real benefits of making Chinese trade visits), and building your China team carefully to ensure the right people are representing you.   

The event closed with an animated Q&A panel session, which provided delegates with guidance on specific issues and advice on tackling reservations on operating in China.

 Mr Jan Muegge, Project Manager HTSPE Ltd Hemel Hempstead said “The presentation by Chen Wu was excellent”  

Talking about the East meets East campaign and the success of the East of England conference Vic Annells, UKTI International Trade Director for the East of England and Chair of the East meets East event said: “Today’s event proved of great value to all those who attended.  China is well established as a priority high-growth market and we want to encourage as many of our regional businesses as possible to really think about exploring and taking advantage of the many opportunities that exist to grow their business.

Companies need to be well informed and prepared in order to execute their strategies successfully in these new markets.  The East meets East campaign is a fabulous resource for our regional businesses.  We urge as many people as possible to utilise the information, support and guidance services provided by UKTI and CBBC to help them take advantage of the opportunities in China now.” 

For more information about the East meets East campaign and the findings from the ‘Opportunities for UK Businesses in China's Regional Cities’ report, visit http://www.eastmeetseast.com/ 

Background and key finding of ‘Opportunities for UK Businesses in China's Regional Cities’ report  

The ‘Opportunities for UK Businesses in China's Regional Cities’ report was produced by the China-Britain Business Council (CBBC) and the Centre for International Business University of Leeds (CIBUL) on behalf of UK Trade & investment (UKTI), with main objectives of:

(i) Identifying those regional cities in China that offer the greatest potential to UK companies as business locations

(ii) Evaluating the opportunities presented by these cities for UK companies in seven priority sectors (Financial and Professional Services, Environment and Climate Change, Energy, Infrastructure, Life Sciences, Information Communication Technology, and Advanced Engineering);

(iii) Make recommendations on how UK companies might gain more business in these cities;

(iv) Make recommendations on how the UK Government might further support the market entry and operation of UK business in these cities. 

Key findings:

·  Collectively, the rapid rate of urbanisation, expansion and economic growth of regional cities in China offer considerable opportunities across a range of industrial sectors and business activities for UK companies. 

·  The key characteristics shared by the regional cities include rapid economic growth, low input costs, large and developing consumer and industrial markets, and strong local government support and policy momentum in regional economic development. Combined, the short-listed 35 regional cities account for around 16 per cent of China’s population and 36 per cent of China’s Gross Domestic Product (GDP). 

·  The majority of regional cities are concentrated in the economically advanced regions of the Bohai Rim (and, in particular, the Shandong Peninsula), the Yangtze River Delta and the Pearl River Delta. The remaining short-listed cities are distributed more widely in the Northeast, Central, Northwest and Southwest regions, where strong government policy and infrastructure investments are helping to promote economic growth. 

·  In the coastal provinces of China, a number of economically inter-connected ‘city clusters’ are developing, where several regional cities can be found in relatively close proximity to an established city and/or each other. For instance, the cities of Suzhou, Hangzhou, Nanjing and Wuxi now provide clusters of manufacturing and services activities to complement the industrial structure of nearby Shanghai.  

·  UK companies locate in China’s regional cities in order to follow existing clients, explore new markets (gaining earlymover advantage) and reduce costs. Cities such as Dalian, Dongguan, Hangzhou, Qingdao, Shenyang, Suzhou, Tianjin, Weifang, Weihai, Wuhan and Yantai offer the best overall business environment, although, because of their heterogeneity, the location attractiveness of each city varies somewhat depending upon the business activity and industry sectors concerned.  

·  Although wide-ranging business opportunities exist, UK companies face a variety of challenges arising from government policies, market forces and operational barriers.

·  The research also found that UK companies already active in Chinese regional cities would like to see continued and further support from Government and trade promotion organizations (TPOs) in a number of areas. These include lobbying and representation (especially to raise the profile of UK businesses in regional cities), improved access to city-level business networks (including local government and businesses, TPOs and other UK companies), and better access to general city-level market intelligence and business information (especially about sector-specific business opportunities). 

Top Tips for operating in China

identify a particular geographical area and focus on that initially.

Use UKTI and CBBC Networks.

You can not operate from the UK alone.

Make sure you have an excellent lawyer.

Take your time and plan for many visits.

Take advantage of the talent pool of Chinese graduates who have studied in the UK.

Be careful who you appoint as your agent.

You can not operate from the UK alone.

Make sure you have an excellent lawyer.

Build your team carefully with the right people who are culturally sensitive