‘New heights’ in Sino-Bri­tish trade and in­vest­ment

China Daily (Hong Kong) - - INDUSTRY SPECIAL - By ZHUAN TI zhuanti@chi­nadaily.com.cn

As the China-Bri­tain Busi­ness Coun­cil cel­e­brates its 60th an­niver­sary, its Chief Ex­ec­u­tive Stephen Phillips sees trade and in­vest­ment reach­ing new heights.

“As Prime Min­is­ter David Cameron em­barks on his visit to China, one point on which we can be un­equiv­o­cal is that the UK-China trade and in­vest­ment re­la­tion­ship is strong and get­ting stronger at an un­prece­dented rate,” Phillips said.

“This is, of course, ex­cel­lent news for both coun­tries and for our busi­nesses.

“But at the CBBC we firmly be­lieve it is a com­mer­cial re­la­tion­ship that still has not yet reached its full po­ten­tial by any means,” he said.

In re­cent months, a num­ber of se­nior min­is­te­rial vis­its from the UK to China have con­veyed the mes­sage that the UK wel­comes busi­ness with China and fully in­tends to re­al­ize the im­mense po­ten­tial for fur­ther de­vel­op­ment.

This buoy­ant mood — sup­ported by a healthy po­lit­i­cal di­a­logue — should send a clear mes­sage to Bri­tish and Chi­nese com­pa­nies alike that this re­la­tion­ship is both a tremen­dous op­por­tu­nity for the fu­ture; and is hap­pen­ing now.

Cameron said ear­lier this year that the Bri­tish gov­ern­ment highly val­ues its trade and in­vest­ment re­la­tion­ship with China, em­pha­siz­ing that each coun­try has much to of­fer the other and his gov­ern­ment is work­ing hard to max­i­mize the po­ten­tial of the co­op­er­a­tion.

Phillips said “at CBBC, as we en­ter our 60th year of sup­port­ing UK-China trade and in­vest­ment, we have wit­nessed the first-hand re­mark­able pro­gres­sion of the re­la­tion­ship.”

“Re­cently that pro­gres­sion has veered ever up­wards and the present eco­nomic sit­u­a­tion is un­prece­dented.”

UK ex­ports to China have quadru­pled since 2002 and dou­bled since 2009.

The lat­est fig­ures from the UK Of­fice of Na­tional Sta­tis­tics put the to­tal value at 10.5 bil­lion pounds ($16.8 bil­lion) for 2012.

In the first quar­ter of this year, the av­er­age monthly ex­ports to China broke the 1 bil­lion pounds bar­rier for the first time.

And UK ex­ports to China in­creased faster last year than those of France, Ger­many and Italy for the third year run­ning, ac­cord­ing to data from the Chi­nese Min­istry of Com­merce.

The lat­est data from China Cus­toms shows that Bri­tain be­came the coun­try’s sec­ond­largest trade part­ner in the EU in the first 10 months of 2013.

Chi­nese in­vest­ment in the UK is also flow­ing.

In 2012, China was the third- largest in­vestor in the UK by vol­ume of projects.

A rapidly grow­ing pro­por­tion of the in­vest­ment is com­ing from the pri­vate sec­tor, al­though State- owned en­ter­prises such as Sinopec and CNOOC con­tinue to take ad­van­tage of the UK’s open in­vest­ment en­vi­ron­ment by con­clud­ing bil­lion- dol­lar deals this year for stakes in North Sea oil and gas.

“At CBBC we see China’s ‘go­ing out’ strat­egy as an ideal foil to the UK gov­ern­ment’s open pol­icy on in­ward in­vest­ment.

“The surge of con­fi­dence among pub­lic, pri­vate and in­di­vid­ual Chi­nese in­vestors only un­der­lines that we are not alone in this view,” Phillips said. Chan­cel­lor of the Ex­che­quer Ge­orge Os­borne her­alded a “new dawn” dur­ing his visit to China in Oc­to­ber as he an­nounced a deal with China Gen­eral Nu­clear Power Group to take a stake in a new nu­clear power plant in south­west Eng­land.

Mayor of Lon­don Boris John­son de­clared him­self de­lighted by a 1-bil­lion-pound deal with ABP ear­lier this year for the con­struc­tion of a sta­teof-the-art busi­ness dis­trict at the Royal Al­bert Docks — one of many Chi­nese in­vest­ments in Lon­don that have been an­nounced in the last 12 months.

The tele­com equip­ment maker Huawei, which al­ready em­ploys a staff of 800 in 12 of­fices in the UK, this year ce­mented its sta­tus as one of the lead­ing in­vestors in the UK by com­mit­ting to in­ject a fur­ther 2 bil­lion pounds in the next five years that will dou­ble its UK work­force.

There are many rea­sons for the UK to be such an at­trac­tive desti­na­tion for Chi­nese in­vestors.

They are at­tracted to a di­verse range of fields in­clud­ing aero­space, ad­vanced man­u­fac­tur­ing, fi­nan­cial ser­vices, en­ergy, in­fra­struc­ture and life sciences, as well as a deep, in­ter­na­tional tal­ent pool.

But per­haps its ad­van­tages to Chi­nese com­pa­nies are best demon­strated by some of the busi­ness lead­ers who have de­cided to in­vest bil­lions in the UK.

Wang Jian­lin, chair­man of Dalian Wanda Group, China’s big­gest com­mer­cial real es­tate de­vel­oper, said “the Lon­don prop­erty mar­ket has ex­cel­lent in­vest­ment op­por­tu­ni­ties”.

Ren Zhengfei, CEO of Huawei, said the UK is “an open mar­ket which wel­comes over­seas in­vest­ment” and praised it as a center of in­no­va­tion with a highly skilled work­force.

Phillips said that Bri­tain leads the world in both in­no­va­tion and cre­ativ­ity.

“The coun­try’s vi­sion­ary spirit is per­haps best ex­em­pli­fied by the cre­ative in­dus­tries, rang­ing from de­sign and ar­chi­tec­ture – as shown in the win­ning UK Pavil­ion at the 2010 Shang­hai Expo and the open­ing cer­e­mony of the 2012 Lon­don Olympic Games – to such fields as fash­ion, online gam­ing, an­i­ma­tion and ad­ver­tis­ing,” he said.

“China’s prom­ise in th­ese in­dus­tries is now be­gin­ning to emerge.

“And Bri­tain, as a wellestab­lished ac­tor, has a rich mix­ture of long ex­pe­ri­ence and new ideas in cre­ative and in­no­va­tive ven­tures, which we hope we can share with China by way of co­op­er­a­tive part­ner­ships,” he said.

Lon­don re­mains the lead­ing fi­nan­cial center in the world, boast­ing an un­ri­valled pro­fes­sional ser­vices sec­tor un­der­pinned by an in­ter­na­tion­ally ad­mired le­gal sys­tem.

The sheer vol­ume of ac­tiv­ity in the city is enough in it­self to jus­tify this rep­u­ta­tion.

Lon­don is also now the largest center in the West for ren­minbi trad­ing – fol­lowed only by Chi­nese main­land and Hong Kong.

Twenty-eight per­cent of all in­ter­na­tional ren­minbi pay­ments last year were made in Lon­don.

CBBC is play­ing a key part to sup­port the grow­ing tide of Chi­nese out­bound in­vest­ment.

CBBC’s China pro­gram has been de­signed to help guide the grow­ing flow of out­bound Chi­nese in­vest­ment both to­wards the UK and just as im­por­tantly to po­si­tion UK com­pa­nies as part­ners of choice around the world.

“Our se­ries of CBBC China

We firmly be­lieve it is a com­mer­cial re­la­tion­ship that still has not yet reached its full po­ten­tial by any means.” STEPHEN PHILLIPS CHIEF EX­EC­U­TIVE CHINA-BRI­TAIN BUSI­NESS COUN­CIL

out­bound con­fer­ences and sem­i­nars, which have re­cently been held in Shang­hai, Chengdu, Chongqing, Xi’an, Shen­zhen and Guangzhou, high­light op­por­tu­ni­ties for Bri­tish and Chi­nese in­vestors to co­op­er­ate in the UK, China and third coun­tries,” Phillips said.

“More sem­i­nars will fol­low across China in 2014.”

And there are tremen­dous op­por­tu­ni­ties too for UK busi­nesses in China.

Bri­tish com­pa­nies and brands have long been re­puted around the world for ex­cel­lence, in­no­va­tion, de­sign and am­bi­tion.

This is well rec­og­nized in China.

The rapidly grow­ing new class of ever-more so­phis­ti­cated Chi­nese con­sumers value UK’s fa­mous brands and high qual­ity ser­vices and sound rep­u­ta­tion. Lux­ury and pre­mium goods, ed­u­ca­tion, the cre­ative in­dus­tries and fi­nan­cial ser­vices are just some of the ar­eas where the 21st cen­tury China has dis­cov­ered a de­mand, and where the UK finds its niche.

Mean­while, Chi­nese con­sumers en­joy vis­it­ing the UK, and the coun­try hopes to build on the es­ti­mated 1,600 pounds that the av­er­age Chi­nese tourist now spends dur­ing a trip to Bri­tain.

“With 13 of­fices across China and 10 in the UK, and the work we do in China is to re­search lo­cal mar­kets, iden­tify op­por­tu­ni­ties and fos­ter co­op­er­a­tion be­tween the two coun­tries. We help Bri­tish com­pa­nies seize ex­cit­ing op­por­tu­ni­ties that th­ese re­gional cities of­fer, ” he said.

“Just one such area of op­por­tu­nity is in what we term as ‘Live­able Cities’.”

One of the Chi­nese gov­ern­ment’s im­me­di­ate tasks is ur­ban­iza­tion, a colos­sal chal­lenge that may in­volve the re­lo­ca­tion of some 300 mil­lion peo­ple dur­ing the next 30 years.

Large-scale and long-term, this un­der­tak­ing will lead to open­ings for China and the UK to profit.

“China’s as­pi­ra­tion – a har­mo­nious, ur­ban­ized and sus­tain­able so­ci­ety – is some­thing the UK has broadly achieved, and as such we can help China to re­al­ize its eco­nomic aims,” he said.

“Our prac­ti­cal ex­pe­ri­ence and ex­per­tise in so many fields re­lated to this ob­jec­tive – from health­care and wel­fare sys­tems to el­derly care, ur­ban plan­ning and green de­vel­op­ment–can be of prac­ti­cal use to China’s de­vel­op­ment in both the short and the long term.”

CBBC’s Live­able Cities pro­gram fo­cuses on this de­mand.

This year, the pro­gram’s three pri­or­ity ar­eas have been ur­ban re­gen­er­a­tion, green build­ings and el­derly as­sisted liv­ing, which re­flect the di­rec­tion of China’s de­vel­op­ment.

“We are work­ing to help Bri­tish busi­nesses take ad­van­tage of their ex­per­tise to part­ner up with Chi­nese com­pa­nies in th­ese fields.

“Another im­por­tant area of our work is to rec­og­nize that small and medium-sized en­ter­prises are ma­jor driv­ers of eco­nomic de­vel­op­ment and jobs in both of our coun­tries.

“They ac­count for over 99 per­cent of all busi­nesses in China and 99 per­cent of the pri­vate sec­tor in the UK,” Phillips said.

Mu­tual ad­vance­ment in this area was bol­stered in Oc­to­ber by the con­clu­sion of a mem­o­ran­dum of un­der­stand­ing for col­lab­o­ra­tion among small and medium- sized en­ter­prises.

It was signed by Lord Sas­soon, chair­man of the Chi­naBri­tain Busi­ness Coun­cil, and Qin Zhi­hui, di­rec­tor gen­eral of the ProSME Center of the Min­istry of In­dus­try and In­for­ma­tion Tech­nol­ogy.

“We are, there­fore, de­lighted that the prime min­is­ter’s del­e­ga­tion will in­clude so many SMEs and that we will pro­vide a wide range of ac­tiv­i­ties for them dur­ing the visit and upon their re­turn to the UK.

“We ex­pect the trade and in­vest­ment re­la­tion­ship to go from strength to strength as our eco­nomic, po­lit­i­cal and cul­tural ties be­come closer by the day.

“This is a re­la­tion­ship that mat­ters to both the UK and China, and one in which we see a bright present, and con­fi­dently en­vis­age a brighter fu­ture, for both coun­tries,” he said.

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