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How British businesses can participate in China’s growth

Britain’s trade relationship with China is booming. Chinese exports were up by 20 per cent in 2013 and growth is spreading to new areas of the economy, many of which are forecast to grow at 15 to 20 per cent this year. The size of the Chinese market will soon equal that of the US, and so demands the attention of anyone interested in growing their business internationally.

What British businesses can offer

China has a vast domestic market and the economy is becoming less export driven and is instead being fuelled more and more by domestic demand. China’s individuals and businesses want more sophisticated services and products, a demand which is driven by the increasing wealth of the population and the expanding middle class. As a result, now is a great time for UK companies to build up sales in China.

With a consumer product, for example, the opportunities are enormous, restricted only perhaps by the number of consumers and the desirability of the product. China remains one of the world’s fastest growing luxury goods markets and is already the world’s largest automobile market. The British brand in China stands for quality and the UK’s consumer brands are well regarded, making it easier for UK companies to meet the demands of Chinese consumers.

Healthcare is another industry in which the UK has a lot to offer China. China has a large and ageing population to the extent that by 2050 the population over the age of 60 will grow to 300 million, three-fold what it is today. The current infrastructure in China and level of service is not currently prepared to cope with such an increase in the number of elderly people and UK management expertise in the health services sector could prove highly valued.

How to establish your business’ presence in China

Challenges remain for doing business in China but fundamental reform, such as the liberalisation of the Chinese Yuan, will keep the business environment on an upward trajectory for years to come. In addition, over the course of the last decade China has become easier to break into for SMEs. While some industries in China are highly regulated and so more difficult for SMEs to navigate, others have very little regulation at all, creating huge opportunities for SMEs.

Generally, it is easy to move people, information and goods in and out of China. However, it is important to seek expert advice so that regulations are clearly understood. It is also advisable to have someone on your team that can understand Cantonese and Mandarin Chinese to help navigate the paperwork so that you can avoid needing to always rely on a translator from outside of the company.

A mistake people often make when looking to do business in China is not anticipating the extent to which the culture differs from the UK. This is of particular importance when it comes to negotiating partnership agreements. In Chinese business culture face-to-face meetings are considered essential, and you will be expected to go out and get to know them for a while. While the Chinese tend to not like long contracts, insist on an agreement that covers all the key commercial terms, but avoid legal jargon. Then, get a lawyer that understands China to review any contracts. In addition, push for the use of UK law, or Hong Kong law as a compromise, rather than relying on local law.

Doing business in China is not straightforward but there is a lot of help available. As a start, learn more about opportunities for British companies in China by watching the China-Britain Business Council programme series, which is available to view for free on The Business Channel.tv website.

Gary Berlyn

Gary Berlyn is the managing director of The Business Channel.tv. The Business Channel.tv provides directors and senior executives in the public and private sectors with business documentaries that not only go to the heart of how businesses can grow strategically, but through the power of film provide expert advice to help in the planning and specification of the right business plans and products. The Business Channel.tv has also recently produced programmes in partnership with the UK Asean Business Council and the UK India Business Council, which can be viewed at thebusinesschannel.tv

This was posted in Bdaily's Members' News section by The Business Channel .