North West businesses are urged to make the most of emerging opportunities in China's regional cities in a new report from UK Trade & Investment (UKTI) and the China British Business Council (CBBC).
China is well established as a priority high-growth market which British businesses would be foolish to ignore, but traditionally UK companies have focussed on a small number of large, established markets.
However, a detailed research project undertaken by UKTI and CBBC in conjunction with the Centre for International Business at the University of Leeds, has identified 35 additional regional cities offering great potential as business locations for UK companies.
The political and economic importance of cities such as Beijing, Shanghai, Shenzhen and Guangzhou has attracted a huge amount of foreign business and investment over the last two decades, but now these markets are becoming saturated. Competition is intensifying and labour and land costs are increasing.
As a result, companies need to look to alternative locations in China for business expansion and development. Cities such as Dalian, Dongguan, Hangzhou, Qingdao, Shenyang, Suzhou, Tainjin, Weifang, Weihai, Wuhan and Yantai all offer a positive overall business environment across a range of sectors, and companies hoping to develop their business there in the near future will gain a key advantage as early movers, helping them establish a strong market position ahead of competitors.
Despite the current global economic climate, China continues to register solid GDP growth average 10 percent per annum. The country is currently the world's fourth largest economy and is predicted to overtake Germany as the third largest by the end of 2008.
Much of the recent growth of China's economy can be attributed to a rapid acceleration in the rate of urbanisation, which is set to continue. Currently around 600 million Chinese people live in cities and this is predicted to increase to 1 billion by 2030*, presenting huge opportunities in a number of areas including infrastructure, healthcare, education, housing, environmental protection and financial services.
UK Trade & Investment and China Britain Business Council in the North West have arranged a special workshop with HSBC to help companies identify and explore opportunities away from China's established, traditional cities and how best to capitalise on them.
Think China, Act Regional: Opportunities for UK Companies in China will be held on Wednesday 21st January 2009 at HSBC, Hardman Square, Manchester, and is ideal for companies either considering entry into the China for the first time or already operating in China and hoping to expand their markets.
Clive Drinkwater, International Trade Director for UKTI North West, has particular experience of the market having lived and worked in China, and has visited many of the 35 cities identified in the report. He says,
"Historically China has had a comparative advantage in the manufacture of low-cost products, but this is becoming a thing of the past. There is growing pressure on firms to develop higher value-added products and services, and UK companies are well placed to take advantage of this, delivering sophisticated products, services and technologies.
"For companies who adopt a long term view and are prepared to develop their business in China away from traditional locations there are wide ranging business opportunities. Of course UK companies will face challenges in the form of government policies, market forces and operational barriers, but UKTI and CBBC are working together to ensure that companies are well informed and properly prepared to enter these markets."
Jessica Zhang of the China Britain Business Council adds,
"The rapid rate of expansion, urbanisation and economic growth in China offers considerable opportunities to UK businesses in a range of sectors. The regional cities identified in this report all share characteristics of rapid economic growth, low input costs, large and developing consumer and industrial markets and strong local government support. Combined, the 35 regional cities listed in the report account for around 16% of China's population and 36% of China's GDP.
"UK Trade & Investment and the China Britain Business Council are the UK's leading sources for China business information, advice, consultancy and services and with our extensive partner network available through British Embassies and Consulate Generals as well as the 11 CBBC offices across China we are well placed to help the North West's businesses successfully capitalise on opportunities."
Companies interested in attending the Think China: Act Regional seminar should contact Jessica Zhang on 0845 603 7053 or email Jessica.zhang@cbbc.org
For more information on UKTI services, trade missions, events and seminars please visit the UKTI website, http://www.uktradeinvest.gov.uk or contact the North West regional team on 0845 603 7053. Email info@uktinorthwest.co.uk
