UK firms al­ready eye­ing non-EU mar­kets

The Myanmar Times - - Business -

IN the wake of the 23 June 2016 Brexit ref­er­en­dum, the world­wide busi­ness com­mu­nity has been left to won­der just how the UK-EU di­vorce will im­pact on the global econ­omy. In the mean­time, the de­bate as to whether quit­ting the EU – some­time around the end of March 2019 – will make Britain great again has be­come ever more di­vi­sive, with many warn­ing that the UK econ­omy may well col­lapse once it loses ac­cess to the Sin­gle Mar­ket, essen­tially the EU free trade zone.

To bet­ter un­der­stand how UK com­pa­nies per­ceive the Brexit im­pact, and as­sess their Brexit readi­ness as well as their plans to ex­plore fu­ture non-EU busi­ness op­por­tu­ni­ties, HK­TDC Re­search con­ducted a ques­tion­naire sur­vey with rep­re­sen­ta­tives of 77 UK com­pa­nies at the Think Asia, Think Hong Kong event held in Lon­don on Septem­ber 21 2017.

The re­sults showed that, in gen­eral, most re­spon­dents had yet to ex­pe­ri­ence any real fall­out from the Brexit de­ci­sion. In line with this, the ma­jor­ity in­di­cated that they had either adopted a “wait and see” ap­proach (i.e. hav­ing no Brexit plan in place) or in­tended to fo­cus/in­vest more in non-EU mar­kets in the fu­ture, with De­vel­op­ing Asia high on their agenda. This is in line with the find­ing that 75pc of re­spon­dents were in­ter­ested in cap­i­tal­is­ing on the op­por­tu­ni­ties emerg­ing from the Belt and Road Ini­tia­tive (BRI). Of those com­pa­nies look­ing to ex­plore new mar­kets, se­cur­ing the ap­pro­pri­ate pro­fes­sional ser­vice sup­port and re­search­ing their tar­get over­seas mar­kets were their key strate­gies for their post-Brexit busi­ness de­vel­op­ment.

Eye­ing the de­vel­op­ing Asian mar­kets and the Belt and Road op­por­tu­ni­ties, nearly half of all re­spon­dents in­di­cated they would seek pro­fes­sional ser­vices sup­port from Hong Kong, main­land China or Sin­ga­pore as an ini­tial step. Sig­nif­i­cantly, 37pc main­tained they were con­sid­er­ing es­tab­lish­ing a re­gional of­fice or re­gional head­quar­ters in Hong Kong as a way of ac­cess­ing and ser­vic­ing their cho­sen over­seas mar­kets.

More than 80pc of the in­ter­vie­wees ac­knowl­edged that Hong Kong’s pro­fes­sional ser­vices sec­tor – in­clud­ing com­pa­nies pro­vid­ing fi­nan­cial, le­gal or mar­ket­ing sup­port – could make a sig­nif­i­cant con­tri­bu­tion to ac­cess­ing the emerg­ing busi­ness op­por­tu­ni­ties in many of the coun­tries along the BRI routes. As such, they were open to learn­ing more about the piv­otal role played by Hong Kong within the BRI.

Brexit: un­cer­tain im­pact In gen­eral, most UK-based com­pa­nies have yet to ex­pe­ri­ence any neg­a­tive im­pact from Brexit, with a sig­nif­i­cant num­ber an­tic­i­pat­ing that will re­main the case in the long-term. In to­tal, 42pc of re­spon­dents had either ex­pe­ri­enced no im­pact or ex­pected no im­pact from the loom­ing EU exit, although 15pc in­di­cated that they ex­pected their share of the EU mar­ket to di­min­ish, while 9pc an­tic­i­pated a labour short­age once it was more dif­fi­cult to em­ploy EU cit­i­zens in the UK.

These find­ings are very much in line with many of the doc­u­mented events re­lat­ing to the UK busi­ness com­mu­nity. Al­ready many busi­nesses in the fi­nan­cial ser­vices sec­tor, in­clud­ing banks and in­sur­ance com­pa­nies, have been ad­vised by in­dus­try reg­u­la­tors to pre­pare for a break with the EU that in­volves no new trad­ing deal hav­ing been agreed. – HK­TDC

Photo: EPA

UK Prime Min­is­ter Theresa May vis­its the Hindu God Lord Somesh­wara Tem­ple in Ban­ga­lore, In­dia, in Novem­ber 2016.

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