Tianjin: A Northern Powerhouse

Nestled in northeast China, Tianjin is one of China’s four municipalities, enjoying provincial-level status alongside Beijing, Shanghai, and Chongqing. With a population of nearly 14 million, it is a bustling centre for international trade, particularly renowned for its port, which handled imports and exports worth £210 billion in 2023, more than four times the value processed by the UK’s Port of Felixstowe (£47 billion in 2024). Tianjin’s strategic location and robust infrastructure make it a vital cog in China’s economic machine, offering UK businesses a gateway to northern China and beyond.

The Tianjin Free Trade Zone: Structure and Ambition

The TJFTZ, one of China’s earliest free trade zones alongside Fujian and Guangdong, spans 119.9 square kilometres across three sub-zones: the Tianjin Airport Area, the Harbour Area, and the Seaport Area (encompassing the Binhai CBD). Despite occupying just 1% of Tianjin’s land, the zone punches above its weight, contributing 26% of the city’s new foreign-invested enterprises, 38% of its import and export volume, and 43% of its foreign capital, according to Vice-Mayor Li Wenhai in April 2025.

The TJFTZ is strategically positioned to drive the Jing-Jin-Ji (Beijing-Tianjin-Hebei) region’s integration into the global economy. It serves as a testing ground for bold trade and investment policies, offering UK firms a unique opportunity to tap into China’s liberalising market. Its mission is to become a “high-level platform for opening up to the world,” with a focus on innovation, trade facilitation, and international collaboration.

Sector-Specific Opportunities for UK Businesses

Each sub-zone of the TJFTZ caters to distinct industries, presenting tailored opportunities for British companies:

• Tianjin Airport Area: Specialising in civil aviation, equipment manufacturing, R&D, digital information, biomedicine, and aircraft leasing, this area is a natural fit for UK firms in aerospace and life sciences.
• Harbour Area: Focused on international shipping and logistics, this sub-zone aligns with the UK’s expertise in maritime services. B
• Seaport Area (Binhai CBD): A hub for finance, open banking, cross-border e-commerce, and creative industries, this area is particularly attractive for UK fintech and media firms.

Policy Incentives: A Magnet for Investment

The TJFTZ offers a suite of policies designed to attract foreign investment, many of which are particularly appealing to UK businesses:

• Investment Liberalisation: The China FTZ Negative List allows foreign investors to operate in non-restricted sectors with minimal red tape. Business registration takes just three days, and planning approvals are processed within seven days, enabling swift market entry for UK firms.
• Pioneering Data Export Rules: In 2024, the TJFTZ introduced China’s first data export negative list, simplifying cross-border data transfers. This is a boon for UK tech and e-commerce companies navigating China’s complex data regulations.
• Tax Breaks: Companies in priority sectors like R&D, advanced manufacturing, and civil aviation enjoy corporate income tax rates of 9–15%, compared to China’s standard 25%. This could significantly boost profitability for UK businesses in these fields.
• Trade and Logistics Facilitation: Goods within the TJFTZ are exempt from import/export licences (unless otherwise specified), and processing, storage, and re-export activities benefit from tax exemptions. Unlimited storage periods and duty-free re-exports further enhance cost efficiencies.
• Financial Incentives: The absence of currency exchange fees and streamlined international payment procedures make cross-border transactions seamless. Faster VAT refunds post-export add to the zone’s appeal.
• International Trade Agreements: The TJFTZ actively leverages agreements like RCEP, CPTPP, and DEPA. In 2023, Tianjin enterprises saw £1.4 billion in RCEP-related trade, with a 79% year-on-year increase, offering UK firms a foothold in these lucrative frameworks.

Economic Performance: A Steady Ascent

While comprehensive GDP and FDI data for the TJFTZ are not fully public, available metrics highlight its resilience. The zone’s foreign trade value has remained stable at £27 billion annually (2019–2023), with foreign capital utilisation rising from an average of £3.7 billion (2018–2020) to £4.6 billion (2021–2023). The Binhai CBD posted a 5.5% GDP growth in 2024, outpacing China’s national average. The number of registered businesses has soared from 69,000 in 2020 to nearly 90,000 in 2025, underscoring the zone’s growing appeal.

Future Prospects and UK Relevance

The TJFTZ is poised for further growth, with initiatives like a new e-commerce returns storage centre to cut return times from 11 to 5 days and £5.1 billion in funding for 107 new projects launched in April 2024. These developments signal a commitment to enhancing the zone’s business environment, particularly for e-commerce and tech firms, sectors where the UK excels.

For British businesses, the TJFTZ offers a strategic entry point into China’s northern market, bolstered by its proximity to Beijing and integration with global trade networks. The zone’s focus on open banking and cross-border e-commerce aligns with the UK’s strengths in financial services and digital trade. Moreover, its liberalised policies and tax incentives provide a competitive edge for UK SMEs and multinationals alike.

The Tianjin Free Trade Zone is more than a shipping hub; it’s a dynamic platform for UK businesses to engage with China’s economic powerhouse. From tax breaks and streamlined regulations to pioneering data policies, the TJFTZ offers a wealth of opportunities for British firms in aviation, finance, logistics, and beyond. As the zone continues to innovate and expand, UK companies looking to break into or grow within the Chinese market would be wise to explore its potential. For further guidance on navigating the TJFTZ, the China-Britain Business Council offers tailored support to help British firms seize these opportunities.

The post Tianjin Free Trade Zone: A Gateway for UK Businesses in Northern China appeared first on Focus - China Britain Business Council.

Strategic positioning and objectives of Guangdong Free Trade Zone

The GFTZ was conceived to align with China’s broader initiatives, such as the Belt and Road and the GBA development plan. Its strategic location facilitates closer economic ties between mainland China and the Special Administrative Regions of Hong Kong and Macau. Each sub-zone has been designated specific roles:​

• Nansha: Focuses on advanced manufacturing, shipping logistics and financial services.​
• Qianhai and Shekou: Specialises in finance, modern logistics and technological innovation.​
• Hengqin: Targets tourism, leisure, healthcare, and cultural industries, leveraging its proximity to Macau.​

Policy innovations and incentives

The GFTZ has implemented a series of policy measures to foster a conducive business environment:​

• Trade and investment liberalisation: Adoption of a negative list approach allows foreign investors to operate in sectors not explicitly restricted. Simplified business registration processes and “one-stop” services have been introduced to expedite company setup.​
• Tax incentives: Eligible high-tech and modern service enterprises benefit from a reduced corporate income tax rate of 15%, compared to the national standard of 25%. Additionally, individual income tax subsidies are available for high-end talent in Qianhai and Nansha.​
• Financial services: Qianhai serves as a pilot area for cross-border financial services, including digital RMB trials. Foreign banks are permitted to establish wholly-owned subsidiaries, enhancing financial sector openness.​
• Technology and innovation: Support mechanisms such as intellectual property protections, R&D subsidies, and venture capital incentives are in place to encourage technological advancement.​
• Logistics and trade facilitation: The establishment of bonded warehouses and streamlined customs procedures, including a “single window” system, aims to enhance trade efficiency.​

Economic performance

Since its inception, the GFTZ has demonstrated robust economic growth. By 2023, the combined GDP of the three sub-zones reached approximately CNY 526 billion (£55.15 billion), more than doubling from CNY 224.4 billion (£23.51 billion) in 2015. Foreign trade within the zone surged from CNY 104.7 billion (£10.97 billion) in 2015 to CNY 580 billion (£60.78 billion) in 2023, reflecting an average annual growth rate of 24%. The actual utilisation of foreign capital totalled USD 53.9 billion (£41.22 billion) over this period, with an average annual increase of nearly USD 6 billion (£4.59 billion).​

In the first seven months of 2024, the GFTZ’s total import and export value reached CNY 409.56 billion (£42.91 billion), marking a 24.1% year-on-year increase. Machinery and electrical products accounted for over 60% of this trade, and commerce with ASEAN countries comprised nearly 20%.

Integration with Hong Kong and Macau

A key feature of the GFTZ is its role in fostering deeper economic integration with Hong Kong and Macau. In Hengqin, Macau enterprises can operate under Macau laws within designated areas, exemplifying the “one country, two systems” principle. Qianhai and Nansha offer preferential policies for Hong Kong firms, including lower thresholds for professional services and mutual recognition of qualifications.​

Future development plans

Looking ahead, the GFTZ aims to align more closely with international high-standard trade and economic rules, promoting institutional openness. Plans include the development of Nansha’s “Science City”, focusing on AI and biotechnology, pilot programs for blockchain and data trading, and infrastructure projects like the Guangzhou-Shenzhen-Hong Kong Express Rail Link and the Hengqin-Macau Light Rail, expected to enhance regional connectivity.​

Conclusion

The Guangdong Free Trade Zone has emerged as a dynamic hub for economic reform and international trade. Its strategic initiatives and policy innovations have not only spurred regional growth but also set a precedent for future free trade zones in China. As it continues to evolve, the GFTZ is poised to play a pivotal role in China’s ongoing economic transformation and integration with global markets.

The post Profile: Guangdong Free Trade Zone appeared first on Focus - China Britain Business Council.

While great strides have been made in recent years, it seems there’s still a long way to go, and China’s central government is not all that impressed with the sector. So argue Paul G. Clifford and Christopher Logan in their new book China Logistics: From Laggard to Innovator (Routledge). So Paul French sat down with Paul Clifford to chat logistics …

In 2022, the Chinese government criticised the nation’s logistics industry as ‘large but not strong’ (da er buqiang). But China’s logistics sector, from haulage to refrigeration, shipping and warehousing, has obviously made great strides since the 80s and 90s – so where are the main weaknesses still to be found?

Since the economic reforms began in the 1980s, China’s logistics have made enormous progress, but still struggle to meet the needs of industry and commerce. The key issues remain the fragmentation of the sector (logistics firms without scale), the slow pace of logistics outsourcing to 3PLs (third-party logistics), cut-throat competition resulting in poor service quality and low profitability, the high asset intensity of logistics firms, and weaknesses in key areas such as multi-modal (truck-to-train) and chilled-chain logistics.

You note that the government (national and local) plays a big role in the development and improvement of China’s logistics network, far bigger than we have seen in Europe or North America. Can you elaborate on how central and local governments work with the industry?

China’s central government has played a vital role in two respects. Firstly, in setting the bold planning goals for the sector, which in turn guides capital allocation. And secondly, through investing heavily in upgrading China’s transportation infrastructure, over which the logistics run. Meanwhile, local (mainly city-level) governments, in competing with each other for investors, jobs and fiscal revenues, have been instrumental in creating logistics hubs across the nation, whether through gateways for the railway land-bridge to Europe (as part of the Belt and Road initiative), highly automated ports, robotised e-commerce centres or cold-chain storage.   

You also talk of the ‘headwinds’ China’s logistics sector faces – international tension and massive disruptions. It looks likely we’re about to go into a significant ‘headwind’ with both a new administration in Washington DC and a raft of China-related policies from the EU. How do you think these will affect the sector?

You are correct. The critical uncertainties and headwinds are to be found internationally. But despite the geopolitical tensions and the new US administration, it will likely prove harder than many think to dismantle the global supply chain that has been built up so carefully over four decades. That said, China’s growing exports are bound to face increased pushback from nations with a large trade deficit with China. China may be expected to respond, for instance by investing in manufacturing in the countries to which it currently exports. The logistics industry will in turn inevitably need to adjust to these changes.

Do you think China has been a genuine innovator in logistics in any way, or simply thrown money and man power at the issue?

The Chinese government has invested heavily in its roads, ports and rail (and is now beginning in high speed freight rail). However, the big investment in China’s e-commerce logistics has come from private firms. This investment ranges from air cargo hubs to integrated IT platforms, AI for transportation management and robots for all kinds of package sorting and storage. In these respects, there is no doubt that China is truly innovating and leapfrogging the likes of UPS. The return on all this investment needs to be seen in relation to its social as well as economic and commercial impact and over the long term. History will be the ultimate judge of this. Did the Victorian UK rail system propel our industry and commerce (and society) forward?

In the book, you seem to suggest China’s logistics sector also has a role to play in China’s climate change and environmental initiatives – EV delivery vehicles etc. Is this happening or just hopeful rhetoric?

The logistics sector is a major producer of greenhouse gas emissions. Addressing this issue in China is certainly not rhetoric but a central part of China’s green transition. These efforts range from new propulsion systems for container liner shipping and shifting goods onto the railways from the roads and from air cargo, to the introduction of new autonomously-driven hydrogen truck corridors plus EVs for the last mile. It also includes the use of advanced technology to drive efficiency in goods delivery and to provide matching loads to avoid the dreaded “empty back haul”. This is highly transformative and, in some areas, a “low-hanging fruit”.

China’s logistics sector seemed to rise to the challenge of Covid-19 and the government’s zero-Covid policy successfully. Am I right in thinking this? And what are the longer-term lessons for the industry (in China and globally) from that sudden, unexpected headwind?

You are perfectly correct. While China’s overall response to Covid-19 may have fallen short in some respects, when it came to logistics, the Chinese government developed some smart workarounds with the result being that the delays at Chinese ports were nowhere near as severe as in the USA. I think a longer-term lesson is that logistics should not be an afterthought, but closely integrated into government emergency action so as to permit a coordinated and speedy response to unexpected events.

Taking this a step further, it is worth noting the degree to which China’s well-defined and well-delivered industrial policy towards logistics is yielding vital results, which are then passed on to the broader economy. 

The post Are Chinese logistics companies good enough for your business? appeared first on Focus - China Britain Business Council.

Richard Hu, a professor at the Canberra Business School, looks at the changes in China’s cities since 2010 and dares to make some bold predictions about the future. In the past, Hu has written about Shenzhen as well as comparing Chinese cities to the rapid urban growth in other Asian countries. Now, his book Reinventing the Chinese City (Columbia University Press) is available and perhaps points the way to the urban future in China.

Read on for Paul French’s conversation with the author …

At the start of the book, you posit the question of whether China is now entering a new era of urbanisation. Is this the case, and how do you define this new era? And, as you also ask, is the current urban transformation leading to a new normal or following an old path?

China’s urbanisation is entering a new era. After four decades of growth at a speed and scale unprecedented in human history, China’s urbanisation is now transitioning into a stage of post-growth. This new era of urbanisation is characterised by a pursuit of qualitative upgrading to replace the previous one of quantitative growth. This shift is reflected in policy priorities like ‘new-type urbanisation’ and ‘high-quality development’, which the Chinese government has put in place in the recent decade.

This shift from growth to post-growth is reshaping China’s urban policy and planning system. It is also likely to reshape urban development approaches in the coming decades. Green, smart, and innovative, among other notions, are the keywords underpinning this shift. This shift is a long-term process spanning through the middle of the 21st century. If these are going to happen as planned and aspired, they will lead to a new normal of Chinese-style urbanisation. But the process will not be smooth. It will fluctuate among the tug-of-war between the new normal and the old path, and between imagination and reality.

You note the emergence of a ‘state-led green revolution’ in Chinese cities and use Beijing as a case study in your book. Do you think China can overcome the difficulty of maintaining growth and greening its cities?

The Chinese government vowed to achieve both modernisation and decarbonisation by the mid-21st century. These are promises made to people within China and in the world. Both goals require specificity and clear roadmaps. However, they embed an intrinsic paradox: many aspects of achieving them are contradictory rather than balanced in the current circumstance. This paradox is a challenge. It also creates a great aspiration for achieving them through innovation or through developing ‘new quality productive forces’, a key word of China’s two congresses just completed in March 2024.

History does not seem to suggest an optimistic outlook. Numerous eco-city programmes were proposed and endorsed before. Some did not achieve the eco outcomes, although they were propagated as eco projects. Hopefully, these unfulfilled projects can offer some lessons to be learnt. However, it should also be acknowledged that Chinese cities have made great achievements in addressing environmental degradation and improving air quality in the recent decade, largely thanks to the green revolution underway. Both lessons and best practices can be drawn to inform a reconciliation of the growth and greening of Chinese cities.

You focus in on Hangzhou to look at the smart city movement in China. Can you tell us what this is and why Hangzhou is an important example?

Hangzhou is an emerging star city in the Chinese and global urban systems. The city’s transformation is swift, agile, and smart. Despite being under the shadow of Shanghai in the Yangtze River delta region, Hangzhou has been searching for an alternative path of urban development, drawing upon its local assets, regional context and national positioning.

Hangzhou has well utilised the opportunities of digital technologies to drive its transformation. The entrepreneurs and enterprises capitalising on digital technologies are home-grown in the city. These innovation factors are fused with a local milieu that is conducive to their emergence and growth.

Hangzhou is an important example in that the city’s transformation has been unplanned. It is more an outcome of bottom-up ingenuity, local entrepreneurship, and market forces than top-down planning. Hangzhou showcases the importance of market forces in enhancing a city’s exploitation of and adaptability to the ‘new quality productive forces’ the Chinese government is aspiring to.

You’ve also looked closely at China’s newest city, Xiong’an in Hebei, and how well it has learnt from the lessons of past urbanisation. How’s that experiment going?

The vision for Xiong’an is the opposite of many problems of past urbanisation. Obviously, lessons are learned in the imagining of the new city that has been drawn and is being developed from scratch.

Xiong’an is 100km away from Beijing and is meant to decentralise certain urban functions from the capital to address its big city syndrome – pollution, congestion and urban development pressures. It also aims to rebalance the Beijing–Tianjin–Hebei region, where Beijing dominates while the other cities are less developed. In the long run, it is planned to be a city of five million people. This bold idea must await the test of time.

It has been seven years since Xiong’an was announced as a new city in April 2017. Its planning has been completed. The progress of infrastructure and early construction is impressive. Although it is largely a construction site at present, the constructed area has started to look like a city. So far, the construction has been based on state investment. It is not clear yet how this state project will sustain its strategic growth through engaging market forces.

Another issue of concern is the indigenous residents who are displaced by the state project. They are urbanised, passively, at the cost of their rural household sites and farmland. How they are surviving in and adapting to an instant city presents a challenge.

Obviously, Hong Kong has historically had a special role for British businesspeople, yet the place has changed so much, and its future role is far from certain. What are your conclusions regarding Hong Kong and the likelihood it will remain a place foreign business people feel comfortable operating in?

Since 2019, Hong Kong has experienced the most drastic changes since its return in 1997. It is increasingly integrated with the regional development of the Greater Bay Area and the national development. This process started before 2019, but it has been explicitly accelerated since then. The development of the Greater Bay Area has been elevated into a national strategy, enhancing the complementarity and fusion of Hong Kong and its neighbouring city Shenzhen and other major cities like Guangzhou in the region.

Hong Kong has played a prime gateway role in the Mainland’s reform and opening-up since the late 1970s. With the rise of other Chinese cities like Shanghai, Beijing, and Shenzhen, this gateway role has been downplayed in the national urban system. However, Hong Kong still has its advantages that other Chinese cities do not have: international connections, talent, its legal system and environment for doing business. Hong Kong’s competitiveness is its bridging role in connecting China and the world. This role is unique to Hong Kong, providing it with opportunities that no other city ­in China or overseas can access.

You have a chapter entitled ‘Imaging 2035 and Beyond’ – it’s always bold to make predictions, but would you care to share with us a few predictions on what China’s cities may start to look like in 2035…and beyond?

The year 2035 is only a bit more than one decade away. It is a benchmark year in the current strategies for almost all Chinese cities since as it is aligned with the Chinese government’s goal of achieving ‘basic’ modernisation by then. Urbanisation is integral to China’s modernisation, in history and in future. By 2035, China will become a highly urbanised society with around 75% of its population living in cities based on assumptions of its urbanisation in the past and at present. Urbanisation will continue to drive China’s economic growth and socioeconomic transformation.

China’s urbanisation will take new forms in the coming decades. One of them is an emerging urban structure of mega regions. Each of these mega regions (like the Beijing–Tianjin–Hebei region, Yangtze River delta region, and Greater Bay Area, and numerous regions of smaller sizes) comprises a chain of cities that are linked by transport infrastructure and mobility of factors of production, forging a regional economy and market. Mega regional development creates new opportunities for integrated, balanced development of cities across a region. It also raises important issues of mega regional planning and governance to enable regional development that is now unbalanced and fragmented.

Photo by Zhang Kaiyv on Unsplash

The post How China reinvented its cities appeared first on Focus - China Britain Business Council.

But over the last few years, the Covid pandemic and a series of serious geopolitical crises have increased the challenges of supply chain management, causing logistical disruption, rising costs and labour market concerns. This can and has had a financial and – in some cases – existential impact on companies.

Learn more about managing China supply chains at the UK-China Business Forum 2024 on 20 March. Click here to register

The pandemic reiterated the centrality of China to global supply chains. As parts of China went into and out of lockdown, many companies considered sourcing from suppliers outside of China. But this merely mitigated rather than eliminated the risk – core components of so many products still come from China.

While the specific uncertainties of the pandemic years are behind us, a number of ongoing challenges remain, both China-specific and global. Most recently, the attacks in the Red Sea have shown that global shipping routes are very vulnerable to disruption. Moreover, companies are increasingly coming under pressure to make their supply chains more sustainable as consumers become more concerned with the carbon emissions generated by the sourcing and transportation of the products they consume.

As a result, some companies have started to explore strategies like ‘reshoring’ (bringing manufacturing and services back to the company’s home country) or ‘friendshoring’ (relocating production and supply chains to allied countries that are considered politically and economically ‘safe’). A 2023 survey by the Institute of Directors found that around 20% of UK importers have already made alterations to their supply chain, with 15% are considering making alterations.

Nevertheless, China-linked supply chains still have the advantage both in terms of cost and in terms of quality, with the Chinese government investing heavily in technological innovation and human capital. And given that China was the UK’s 5^th largest trading partner in the four quarters to the end of Q3 2023, supply chains between the UK and China are – and will remain – a priority for most companies.

That being said, companies that rely on distant sourcing strategies may need to consider establishing an on-the-ground presence that allows them to respond more quickly to ripples in the supply chain. And like many aspects of dealing with China, communication is key. It is important to build relationships across all the stakeholders, and where possible and applicable, to open up communications across all those parties – think of multiple point supply ‘networks’ rather than point-to-point supply ‘chains’.

So, how can you deal with vulnerabilities in your China supply chain? As part of the UK-China Business Forum 2024, CBBC will be hosting a panel on supply chain management that will bring together experts and companies on the ground to explore options and strategies. The panel includes Marco Forgione, Director General of The Institute of Export and International Trade; Jane Liang, Chief Procurement Officer at Diageo; James Grayland, International Director at Heighten; and Lise Bertelsen, Executive Director, Public Affairs at the China-Britain Business Council (moderator). Click here to register.

The post Managing China supply chains in challenging times appeared first on Focus - China Britain Business Council.

The event saw the participation of over 200 delegates and provided a platform for more than 40 speakers, including senior representatives from the British Government and Greater Bay Area (GBA) local governments, and senior representatives from British and Chinese companies based in the UK, cities in the Chinese mainland, and Hong Kong.

Throughout the full-day programme, the discussions focused on the latest developments and strategies for British companies in the GBA region, covering topics ranging from data and technology to trade in services and goods. The conference also explored the potential for investment in the UK by Chinese companies from the region.

Sir Sherard Cowper-Coles, Chair of CBBC, delivering opening remarks at the UK-GBA Conference

In his opening remarks at the Morning Plenary Session, Sir Sherard Cowper-Coles, the Chair of CBBC, highlighted the abundant opportunities in the GBA, including enhanced connectivity, the size of the market, the depth of the talent pool and the policy incentives available. While acknowledging the challenges of establishing a major economic hub, he emphasised CBBC’s role in providing a platform for members to share their vision of the future of the GBA, saying, “CBBC has designed this conference to enhance understanding and awareness of opportunities and challenges, whether for UK business in the GBA or GBA companies looking to invest in the UK.”

Guangdong Governor Wang Weizhong delivering opening remarks at the UK-GBA Conference

Guangdong Governor Wang Weizhong, in a video message during the morning plenary session, said, “We hope that investors all over the world will seize the opportunity to come to China, Guangdong and the GBA to explore the Chinese market and achieve new accomplishments. Guangdong is willing to join hands with our friends from the UK to work closer under the framework of China-UK relations to realise mutual benefits on a higher level and with higher quality.”

Tom Simpson, Managing Director, China, China-Britain Business Council welcoming attendees

Also offering welcome remarks during the morning plenary session were Tom Simpson, Managing Director, China, China-Britain Business Council; Sarah Mann, Consul-General, British Consulate Guangzhou; Zhu Xiaojun, Deputy Director-General, Department of Commerce of Guangdong Province; and Dr Jimmy Chiang, Associate Director-General, Invest Hong Kong

The event continued with keynote speeches from three key speakers: ‘New Opportunities for International Cooperation in the Greater Bay Area (Qianhai)’ by Huang Xiaopeng, First Deputy Director-General, Qianhai Authority; ‘London – Technology, Innovation & Building Global Communities’ by Janet Coyle, CBE, Managing Director, Grow London at London & Partners; ‘Opportunities for Foreign Companies in the Greater Bay Area and HSBC’s Strategic Choices’ by Richard Li, Managing Director, External Relations, South China, HSBC; and ‘Transformation and Growth Through Uncertainty’, by Andrew Harding, FCMA, CGMA, Chief Executive, Management Accounting, AICPA & CIMA.

This was followed by two CBBC-moderated discussions on capitalising on the GBA’s potential for cross-border cooperation and the role British business can play in the development of a sustainable and economically diverse GBA integration strategy.

In the afternoon, attendees had the option to attend one of two sub-forums on ‘International Technology and Innovation Cooperation in the GBA’ and ‘Growth Beyond Borders: Expanding Your Business into the UK and Beyond’, respectively.

Wang Jinxia, Deputy Director General, Qianhai Authority, delivering the opening remarks at the ‘International Technology and Innovation Cooperation in the GBA’ Sub-Forum

Looking ahead, CBBC remains committed to building on the inaugural UK-Greater Bay Area Conference and investigating the future opportunities between the UK and the GBA.

Thank you to our partner, the Qianhai International Talent Hub; our gold sponsors, BSI, HSBC and London & Partners; our silver sponsors, AICPA & CIMA, Berkeley Group and the Welsh Government; and our supporting organisations, the British Chamber of Commerce Guangdong, the British Chamber of Commerce in Hong Kong, the Chinese General Chamber of Commerce Hong Kong, Invest Hong Kong, Guangdong Chamber of International Commerce, China Council for the Promotion of International Trade Shenzhen, China Chamber of International Commerce Zhuhai Chamber of Commerce, the Hong Kong Chamber of Commerce Qianhai and Shenzhen Outbound Alliance.

Click here to see more photos from the event

The post Over 200 attend inaugural CBBC UK-GBA Conference appeared first on Focus - China Britain Business Council.

What are the Welsh Government’s main goals in China?

We are promoting a wide range of priority sectors for Wales, including life sciences, high value manufacturing, education, food and drinks, and tourism, facilitating the development of trade links for our companies/institutions, and attracting more investments for Wales.

How does the Welsh Government go about reaching a Chinese audience?

In addition to joining promotional events like the UK-GBA Conference, we have set up collaborative partnership with the DBT, CBBC, Chinese governments and regional and national industrial association to promote Welsh industries and investment offers. Moreover, we believe that foreign direct investment (FDI) is led by sound trading partnerships, so we are trying hard to facilitate Welsh firms to export to China, and in this way to increase Welsh firms’ exposure in China, and indirectly promote the Welsh industrial ecosystem to the Chinese business community. We also run social media channels on WeChat, Weibo and Xiaohongshu.

How has China changed in recent years as a target market for investment, exports or FDI?

Due to geopolitical factors, we have seen a drop off among Chinese companies that want to establish R&D centres in Wales, as well as less investment in the tech sector.

What kind of industries is Wales trying to attract from China?

Life Science: We have over 360 Welsh-based life science companies with strengths in med tech, diagnostics, wound healing, regenerative medicine and cell therapy. Around 65% of them are in the medtech and diagnostics sub sector. That’s why we launched a medtech and diagnostics cluster in 2020 with a combined turnover of £1.5 billion. Some of the cluster members are proactively looking for investors to optimise their products and services and expand their sales channels. We also established 46 Centres of Excellence focusing on fields including oncology, neuroscience and imaging, wounds and diabetes, who are open for joint research collaborations.

Automotive: Wales has an established and diverse automotive industry with the supply chain capability to satisfy a wide range of requirements. The supply chain for ULEVs and certainly electric vehicles is very much in its infancy in the UK, but in Wales, we have a number of organisations specialising in power electronics, battery and energy technology, lightweighting and materials that have the potential to play a major role in the development of the industry. The compound semiconductor cluster in South Wales is also adding value, which is deployed across a growing number of applications, including electric and hybrid-electric vehicle motors and chargers, and RADAR and LIDAR for autonomous vehicles etc.

Why is the GBA important to Wales?

The Greater Bay Area is a region with high openness, a strong economy, and a great deal of strategic importance in China, characterised by innovation power and advanced engagement with international business. Meanwhile, both GBA and Wales share similarities in terms of industrial layout, with priority sectors including life science, advanced manufacturing, and information technology.

What is the Welsh Government’s strategy in the GBA?

This is very much a learning journey for the Welsh government, as we would like to learn more about the businesses in the Greater Bay Area, and specifically their requests to invest overseas, in order to better our service to accommodate and facilitate their business development. More importantly, we would like to put Wales on the map for all businesses in the GBA, and establish the business connection between Wales and GBA.

What do you hope to get out of this GBA conference?

We would like to further understand the industrial layout of the GBA, and identify opportunities for our companies/institutions in areas like trade and R&D. We also want to understand the need from GEA companies, especially from the investment perspective, and how we can optimise our service, and better support them expanding their business into the UK market.

Register now for the UK-GBA Conference in Shenzhen on Tuesday, 21 November

CBBC’s UK-GBA Conference, coinciding with the visit of CBBC’s Chair, Sir Sherard Cowper-Coles, and Chief Executive, Andrew Seaton, will provide a platform for senior-level representatives from our Members, partners, and other key stakeholders to discuss the latest developments and strategies for British companies in the GBA region. Also joining us will be representatives from the British Government, Shenzhen and other GBA local Governments, as well as representatives from British and Chinese companies in Guangdong, Hong Kong, Macau, and from other parts of China.

The post The surprising links between Wales and the Greater Bay Area appeared first on Focus - China Britain Business Council.

The hall at London’s Battersea Power Station is packed, full of start-ups, innovators, entrepreneurs, and scale-ups, all eager to absorb insights from the expert panel of tech companies, venture capitalists, investors, and futurists gracing the stage. This was the Future Horizons event, part of the annual Grow Summit presented by London and Partners. Speakers included executives from Mastercard, a16Z, Fidelity and other renowned entrepreneurs and business leaders such as Baroness Martha Lane-Fox of Soho, the co-founder of Lastminute.com, and Reid Hoffman, founder of LinkedIn.

Organisers London and Partners champion London as a rival to Silicon Valley, positioning it as a global investment hub with a strong emphasis on the tech industry.

Janet Coyle CBE, the organisation’s Managing Director of Business Growth, is heading to China to speak at the upcoming CBBC conference on the Greater Bay Area (GBA). She aims to attract the growing number of Chinese tech companies based in the GBA to invest in London.

“The GBA is by far generating the most opportunity. Fifty to sixty per cent of all our business comes from that area,” Coyle says. “We identify companies looking to expand into Europe, and we want them to choose London,” she adds. London and Partners is partly funded by the Greater London Authority, with the remaining funds self-sourced through sponsorships and events. Their primary goal is to draw investment into the capital, mostly through foreign direct investment (FDI) and by supporting companies looking to expand into London. They also attract and bid for major international business events and conferences, attract tourism, and assist London companies in going global.

Coyle acknowledges that recent geopolitical tensions have impacted London-based companies eyeing expansion into China. Still, she notes that Chinese interest in the UK remains strong.

For Coyle and her team, attracting Chinese companies to the capital is a complex and often slow process. Identifying suitable companies, understanding their needs, building relationships, and facilitating their launch in London can take years. Coyle cites Chinese FinTech company Ping Pong and electric car company BYD as recent high-profile successes.

Coyle explains that inbound Chinese investment slowed somewhat due to the Covid-induced pause and a focus on domestic growth keeping many companies from expanding abroad. However, she notes, “now we’re starting to see the momentum building. London is home to the second-highest number of Chinese companies after Singapore.

“Chinese companies want to come because of the business infrastructure, the talent, the innovation, and the available growth capital,” she emphasises. “Despite global trends, we are still seeing VCs investing, and London remains a great place to live, with a large Chinese community.”

Over the last six months, London and Partners has regularly connected scale-ups to corporates. Previously limited to London companies, their “meet the corporate” programmes are now open to any global scale-up.

“Whether it’s a company from Shanghai or Shoreditch, they all want the same things: access to customers, money, growth capital, talent, and ideally, access to new markets,” Coyle says. “If we’ve got a company from Shanghai interested in electric vehicles or wanting to connect with, for example, City Hall, we can now make that happen.”

While London and Partners is not a lobbying organisation and align with government decisions, they can assist Chinese tech companies in finding their feet in London, with a predominant focus on sustainability, enterprise, fintech, cyber, creative tech, and health tech or life sciences.

“What’s driving global FDI flow is sustainability right now,” Coyle states. “And wherever you go, including China, everyone is asking about sustainability. London is ranked number one globally for Green Finance.”

In addition to clean tech and sustainability, health tech, and mobility, there is a strong demand for creative tech – immersive, gaming, VR, AR – though Coyle admits that FinTech will always be strong for London.

“As a city, we have reinvented ourselves over hundreds of years and are used to it. Whether it’s Covid-19 or global downturns, we have incredible entrepreneurs who get us out of this and build incredible pieces of tech,” she concludes. “FinTech emerged from a huge crash, creating a new model for banking. London stands strong in times like this.”

The post Why GBA tech companies should invest in London appeared first on Focus - China Britain Business Council.

The Greater Bay Area (GBA), which covers nine municipalities of Guangdong Province (Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing) around the Pearl River Delta, plus the two Special Administrative Zones (SAR) of Hong Kong and Macau, has long been a trading hub that connects China to the rest of the world.

For centuries, the trading posts at Lumen and Guangzhou welcomed traders from Europe, the Middle East, Africa, India and South East Asia. Even during the relatively isolationist Mao era, the Canton Fair (now known as the China Import and Export Fair) continued to host foreign merchants twice a year. In 1953, the famous Icebreaker Mission, led by the British economist Joan Robinson, travelled to Guangzhou to sign a business arrangement which ended the boycott imposed by the UN in response to the Korean War.

The Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area, published on 18 February 2019, set out a bold vision for a region that has long been one of China’s most dynamic and highest in potential. The plan proposed a far-reaching overhaul of the Pearl River Delta’s infrastructure and administrative set-up to expand on existing strengths and pave the way for further economic expansion.

The major cities of the Greater Bay Area

The region has developed rapidly since the release of the plan, despite the impacts of the Covid-19 pandemic, largely thanks to five main geographical and structural advantages:

1. The GBA hosts three of the world’s 10 busiest container ports — Shenzhen, Guangzhou and Hong Kong  (according to the World Shipping Council) — and has direct access to the South China Sea, which carries an estimated one-third of all global shipping.
2. Together with a sprawling network of waterways, the region has over 11,200km of express roads and a railway network the size of a small country, providing convenient and easy access to China’s vast consumer market.
3. The GBA is a key manufacturing hub, accounting for 35% of exports from mainland China, Hong Kong and Macau. Advanced manufacturing, in particular, is becoming a key area of investment, with the region seeing major growth in new energy industries such as lithium batteries and photovoltaics.
4. The region hosts some of the most innovative and technologically advanced companies on earth. In 2017, nearly 14% of all Chinese patents were filed by companies based in the GBA. Shenzhen alone accounted for over 40% of international patent applications from China.
5. Businesses in the delta can access three of the world’s leading financial centres. Aside from Hong Kong, which occupies fourth place on the Global Financial Centre Index, Shenzhen and Guangzhou, which come in at 9th and 25th respectively, represent two new emerging finance hubs.

The British business community is watching the development of the Greater Bay Area with great interest. For UK companies consider it to be an important driver for their Greater China operations, whether in financial services, technology and innovation, or other sectors.
Sir Sherard Cowper-Coles, Chair, China-Britain Business Council (CBBC)

Key areas of opportunity in the Greater Bay Area

Infrastructure 
There are few regions as well-networked as the GBA. Large-scale infrastructure projects, including the Hong Kong-Zhuhai-Macau Bridge, completed in 2018, and the express rail network that links Hong Kong to Shenzhen and Guangzhou and onwards to China’s vast high-speed rail network, have made it quick and easy to travel around the region, achieving a level of convenience that will only expand now the restrictions of the Covid-19 pandemic have been lifted. Green infrastructure – including low carbon transportation, green buildings, water and waste management, and more – is also a major part of the region’s current infrastructure boom, with green infrastructure investment accounting for RMB1.9 trillion of the total RMB 5 trillion earmarked for major infrastructure projects in Guangdong Province’s 14th Five-Year-Plan (FYP).

Advanced and high-tech manufacturing
According to the Department of Industry and Information Technology of Guangdong Province, in the first six months of 2022, advanced manufacturing and high-tech manufacturing accounted for 55.9% and 33.1%, respectively, of the industrial added value of the GBA. Key industries include electronic communication devices, automobiles, and chemical products. The growth of this sector in the GBA has been and will continue to be made possible by the provision of research funds, the construction of facilities such as high-tech industrial parks and national supercomputer centres, and the recruitment of human resources from around the world (for example, the Shenzhen Government has offered subsidies for undergraduates who move to Shenzhen). The establishment of cross-border “cooperation zones”, such as the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone, has also played a key role.

In Hong Kong itself, the government has made unprecedented strides to promote information and technology development by investing more than HK$130 billion from 2017 to 2021. StartmeupHK, an initiative by InvestHK, also supports startup ecosystem stakeholder companies to set up a presence in Hong Kong, and provides a one-stop service platform to enable them to grow from Hong Kong into the wider GBA.

Financial Services
A growing economy and an increasingly affluent population have made the GBA an attractive market for financial services products. Hong Kong is already an international finance centre, with financial services accounting for 23.3% of the SAR’s GBP in 2020, and the GBA has enabled much greater connectivity between Hong Kong and mainland China’s capital markets. On 10 September 2021, the Cross-boundary Wealth Management Connect was officially launched to enable residents in Hong Kong, Macao and nine cities in Guangdong Province to carry out cross-border investment in wealth management products distributed by banks in the area. According to a January 2023 report published by Bain, SMEs in the GBA also present a substantial opportunity for financial services providers, requiring support for expansion “including more convenient lending, professional wealth management services, flexible insurance policies, and comprehensive cash and liquidity management.”

Register now for the UK-GBA Conference in Shenzhen on Tuesday, 21 November

CBBC’s UK-GBA Conference, coinciding with the visit of CBBC’s Chair, Sir Sherard Cowper-Coles, and Chief Executive, Andrew Seaton, will provide a platform for senior-level representatives from our Members, partners, and other key stakeholders to discuss the latest developments and strategies for British companies in the GBA region. Also joining us will also be representatives from the British Government, Shenzhen and other GBA local Governments, as well as representatives from British and Chinese companies in Guangdong, Hongkong, Macau, and from other parts of China.

The post Opportunities for UK businesses in the Greater Bay Area in 2023 appeared first on Focus - China Britain Business Council.

On the 10^th anniversary of the BRI, we look at 10 key figures that demonstrate the scale and ambition of the project.

155
As of August 2023, a purported 155 countries have joined the BRI by signing a memorandum of understanding (MoU). According to the Chinese government’s Belt and Road Portal, this includes 40 countries in Asia, 52 countries in Africa, 27 in Europe, 15 in North America, 9 in South America, and 12 in Oceania.

1
Italy is the only G7 country to have joined the BRI, having signed an MoU with Beijing in March 2019. However, as of late 2023, the Italian government has indicated that it is likely to withdraw from the BRI, bringing it into step with the China policy of the rest of the EU. Italian politicians are reported to have been disappointed with the scale of trade and other business dealings with China since the MoU was signed.

$1 trillion
The amount estimated to have been spent on BRI initiatives, making the BRI the largest multilateral development project ever undertaken by a single country.

3,000
The number of major projects estimated to have been undertaken as part of the BRI. This includes roads, railways, ports, power plants and other critical infrastructure.

40%
The proportion of projects in the China-Pakistan Economic Corridor – one of the BRI’s flagship arrangements – estimated to have run into problems such as funding cuts, corruption, or insurmountable cost increases. Some have criticised BRI projects for a lack of follow-through, leaving countries with infrastructure projects and economic zones that ultimately do not contribute to the economy. A report by AidData at William & Mary suggests that around a third of the BRI infrastructure project portfolio has encountered major impediments.

120km per hour
The speed of the trains on the China-Europe Railway Express project, a logistics distribution network that connects China with more than 200 cities in 25 European countries via the Eurasian hinterland.

36 gigawatts
The estimated capacity of the coal power plant projects that have been cancelled since 2021 after Xi Jinping announced that China would no longer support the construction of coal-fired power plants abroad. Since then, China has stated its commitment to supporting green and low-carbon energy development in BRI countries.

13,000km
The length of the Yiwu-Madrid railway line, the world’s longest railway freight route (the Yiwu-London route is the second longest). The route is one of several used by long-distance trains as part of the “New Eurasian Land Bridge”, which is integrated with the BRI.  The journey takes around three weeks, as opposed to six by sea. Despite the success of China-Europe rail projects over the past decade, most analysts agree that the maritime routes of the BRI still receive the most focus/trade.

99 years
The length of time that the Hambantota International Port in Sri Lanka has been leased to China. China Merchants Port took a 70% stake in the port in 2017 after the Sri Lankan government struggled with debt repayments (the construction of the port had been financed with commercial loans from the Exim Bank of China). Hambantota has been used as an example in accusations that China is practising ‘debt-trap diplomacy’, in which a country extends debt to another country to increase political leverage. However, the ‘debt-trap diplomacy’ hypothesis about the BRI has not been universally accepted by economists and IR specialists.

10,000
The number of scientists from BRI countries that have visited China for research or exchanges. Over the past few years, cultural, digital, and health-related initiatives have been playing an increasingly important role in the BRI, with the focus shifting to “softer” power initiatives, including personal training and the construction of cultural institutions.

The post The Belt and Road Initiative in 10 figures appeared first on Focus - China Britain Business Council.