My job is to build on these foundations and to ensure that CBBC remains the most authoritative private-sector voice on the trade and investment flows between the United Kingdom and China and continues to place our members’ business interests at the heart of everything we do.

I went to Hong Kong on a three-month employment secondment in 1995. In fact, I stayed there until just last week. My personal and professional life has been completely shaped by the economic growth and business opportunities of China, including, of course, by the special role of the Special Administrative Region of Hong Kong.

When I landed at Hong Kong’s Kai Tak Airport all those years ago, China’s GDP was around USD 730 billion. By contrast, the United Kingdom’s was double that. I don’t need to repeat here the equivalent numbers today. China’s economic journey from 1995 to 2024 has been nothing short of extraordinary, and I’m not sure that there has been anything quite like it in history.

The growth today may not be quite as stratospheric, but the scale and diversity of the business opportunity remain huge. Today, I observe a market with a middle class of, by some estimates, 800 million people and an opportunity for investment and exports for all our members whose products and capabilities are much sought after in China. The capital generation of the domestic economy also means that the United Kingdom should be a very natural beneficiary of Chinese investment. The high-quality and efficiently manufactured products of China should also find a natural export home in the United Kingdom.

Of course, the political backdrop to these opportunities has become more complex. In my view, this makes the role of CBBC even more important today than it has ever been. Our work, however, will always be guided by our members. Every decision will be determined by one simple question: “How does this best serve our members’ interests?”.

In that respect I want an open and regular communication with all of you – through events, meetings, calls and dialogue – and I look forward to meeting as many of you as possible in the coming months.

One of my first tasks is to make a submission to the new UK Government in response to their manifesto commitment to undertake an “audit” of China. We will need your help to do this and we will soon be sending you a member survey so that you can tell us how you would like us to respond and what is top of your mind. So please look out for the email in your inbox shortly.

The path ahead for CBBC is exciting, and I look forward to navigating it with the input of our members, the counsel of our board, the support of the CBBC stakeholder community and the expertise of our excellent executive team.

The post A Message from the New CBBC Chief Executive, Peter Burnett appeared first on Focus - China Britain Business Council.

In the third instalment of this series, FOCUS talks to Yue Fu, Head of Corporate Affairs for Chinese Mainland and Hong Kong at Haleon.

What new trends are you seeing in the health industry in China?

First, we believe the health industry in China will experience steady growth. According to China’s National Health and Family Planning Commission, the total scale of China’s health service industry will reach RMB 16 trillion by 2030. There has also been a notable shift in people’s mindset as priorities move from reactive disease treatment to preventative health measures, and there is a growing demand for proactive health management products and services.

In addition, China’s ageing population is fuelling a surge in demand for health products and services tailored for older adults. Older people seek not just an extended lifespan but also a higher quality of life. Consequently, there is a growing opportunity for health products and services that support mobility, vitality, memory and cognitive wellbeing.

We believe that these trends will keep driving the growth of China’s consumer health industry. Haleon will also keep leveraging its core strengths in China – deep human understanding, trusted science and digital capabilities – while actively capturing local market trends and consumer needs to provide more high-quality products to meet consumers’ diversified needs under the new trends.

How have Chinese consumers evolved in recent years in terms of their healthcare preferences and buying habits?

Firstly, the consumer’s level of concern for all health problems generally increased. According to a Haleon market study conducted in early 2024, compared with 2021, consumers’ concerns about eye health, immunity, energy, joint health and nutrition supplements have all increased significantly. To deal with these concerns, consumers are taking measures such as adjusting their lifestyles, seeking medical help, changing their diets and exercising more.

In addition, people are spending more on proactive health management. The 2023 National Consumption Expenditure Report indicated that, while demand for therapeutic medications remains dominant and relatively stable, expenditure on non-therapeutic scenarios, such as preventative healthcare, health examination and screening tests, has shown more pronounced growth.

Lastly, consumer demands are constantly evolving and becoming more sophisticated, calling for personalised solutions. To address the diverse needs of different individuals, Haleon launched its first customised nutrition mini-program platform, Key, last year, providing consumers with personalised nutrition solutions, to give just one example.

Key, Haleon’s personalised nutrition platform

Does China’s ageing population provide an opportunity for Haleon?

As mentioned earlier, the ageing population presents great opportunities for growth in health products and services that aim to enable older adults to enjoy a fulfilling life in their later years. Notably, the “new-silver” demographic, aged between 50-60, are more proactive in maintaining their health and more willing to invest in health-related expenses.

Haleon offers products and health solutions that may benefit this ‘silver’ demographic. We have the Silver Centrum multivitamin for the middle-aged to the elderly population. US Silver Centrum has been used in some large-scale, high-quality studies and has been shown to have positive results in slowing down cognitive ageing. In addition, our classic brand, Caltrate, has always focused on providing solutions for bone and joint health, which may also be helpful for older adults to maintain and improve their mobility.

The advantage of China’s consumer goods market is its ability to generate quick innovations, enabling rapid iteration and an agile “test-and-learn” approach

What learnings has Haleon taken from the China market that can be used in the UK and vice versa?

The Chinese market presents lessons for Western countries in the agile and rapid innovation capability of business models such as online-to-offline and interest-based e-commerce platforms. Another advantage of China’s consumer goods market is its ability to generate quick innovations, enabling rapid iteration and an agile “test-and-learn” approach by leveraging its complete industry supply chain and massive domestic consumption market.

As a company with a history in pharmaceuticals, Haleon was born with a heritage of rigorous scientific research. Deep human understanding and trusted science are the core strengths that enable Haleon to outperform its competitors. In the realm of consumer health, our journey begins with a deep understanding of our consumers’ needs. We are truly committed to uncovering profound insights, fulfilling the genuine needs of consumers, and delivering innovations that have been proven to benefit consumers’ health based on trusted science.

How has Haleon managed to thrive in an era of recession around the world? 

Health is a universal and timeless theme. Haleon’s vision to make everyday health more achievable, more inclusive and more sustainable, as well as our commitment to breaking down the social and environmental barriers to better everyday health, is especially crucial in these turbulent times.

With an extensive portfolio spanning disease treatment, prevention and condition enhancement, covering almost the entire human life cycle, we are able to serve tens of millions of people around the world. Combined with the global accessibility of our products, this has allowed us to maintain a certain level of resilience even in challenging environments.

As we move forward, Haleon will continue to leverage our strengths to identify new trends in the market and keep enhancing our innovation capability, allowing us to explore potential business opportunities and adapt to the ever-changing world.

The post Haleon on new trends in the health industry in China appeared first on Focus - China Britain Business Council.

In the second instalment of this new series, FOCUS talks to Jasmine Dang, Unilever’s North Asia Head of Communication and Corporate Affairs.

How and when did Unilever enter the China market and what major successes and growth have you had during this time?

It has been over one hundred years since Unilever’s first entry into the China market. Over the past century, Unilever has grown alongside the Chinese people, providing products and services to Chinese consumers. We have witnessed and contributed to the development of China’s consumer goods industry.

In 1923, Sir Lever, the founder of Unilever, journeyed across the seas to Shanghai to establish the largest soap factory in the Far East, introducing new hygiene products to Chinese consumers.

Fast forward to 1986, Unilever was among the first batch of multinational companies to enter China after the reform and opening up, bringing advanced industrial technologies, an extensive range of products, and a commitment to quality, which significantly drove the growth of China’s consumer goods sector.

Today, China has become one of the top three key growth markets for Unilever globally. Our cumulative investment in the country exceeds $3 billion, with the establishment of our North Asia headquarters and a state-of-the-art global R&D centre in Shanghai. We have eight production bases across the country and operate 40 prestigious brands that meet the daily needs of 80% of urban households in China.

What major projects has Unilever been working on recently, and what is the company excited about coming up in the near future?

As the advantages of China’s supply chain continue to emerge, Unilever has been gradually expanding and upgrading its supply chains in China, building a comprehensive network across the country.

Among these initiatives, as one of the largest investment projects in China in recent years, Unilever has invested RMB 1.6 billion to build a multiple-category production base in Guangzhou. The BW & PC factory officially started mass production at the end of October 2023 as the initial phase of the project.

It will follow international digital manufacturing and globalisation 4.0 standards, promote intelligent digital production, build an end-to-end intelligent supply chain value chain, launch a world-class ‘Lighthouse’ benchmarking project, and is in line with the sustainable goals of ‘dual carbon goals’, to contribute to the transformation and upgrading of the Chinese manufacturing industry.

When fully completed, along with other manufacturing facilities, this Guangzhou base will cover the South China market and will also work as a Unilever China export centre, supplying to the Regional Comprehensive Economic Partnership (a free trade agreement among 15 countries in the Asia-Pacific region) region and the global market.

How has Unilever seen the Chinese market evolve over the past 100 years?

Since entering the Chinese market over 100 years ago, Unilever has been deeply rooted in the mutual development of China’s social and economic life, providing quality services for Chinese consumers.

Entering the 21^st century, the country’s consumer goods industry has undergone more rapid development driven by the economic boom. Unilever modernised our supply chain with technology and optimised our product portfolios to be higher-end through cutting-edge technology backed by R&D capabilities to meet the changing needs of Chinese consumers.

With the rapid growth of e-commerce, Unilever is applying more “digital intelligence” tools and leveraging diverse social platforms to accurately cater to the ever-changing market trends, providing consumers with faster, fresher, and more accurate products and services.

Looking forward, we expect that the Chinese market will enter an era characterised by diversity, personalisation, and highly adaptive consumption patterns. We also find that Chinese consumers have become more rational, seeking products with health attributes and high quality. This shift in consumer attitude has led to exciting developments in the industry, transitioning from steady growth to an era of product segmentation and premiumisation.

Unilever will continue to strengthen its resonance with local consumers. We want to enhance their quality of life and empower them to embrace an active and healthy lifestyle.

What do you hope to see for the next 70 years in China?

Unilever has been operating in China for over 100 years. As we look towards the next century, fuelled by our North Asia headquarters, a state-of-the-art global R&D powerhouse in Shanghai and eight production bases here in China, Unilever will continue to provide high-quality products and services to local consumers.

How has CBBC supported Unilever now or in the past, and in what capacity?

Unilever and CBBC have maintained close cooperation over the past several years. We have navigated the complexities of legal policy together and engaged with government and other stakeholders to facilitate policy advocacy for a better business environment.

The Unilever Leadership Team also actively engaged in CBBC-host events to advocate for UK-China economic and trade engagement, such as the Shanghai celebration dinner for “the 50th Anniversary of the Establishment of China-UK Ambassadorial Diplomatic Relations” and the “Suzhou – Britain economic and trade cooperation roundtable dialogue”.

Forging ahead, we look forward to closer interaction and collaboration to drive more positive changes with a unified voice in the future.

The post After 100 years in China, how does Unilever see the market today? appeared first on Focus - China Britain Business Council.

In the first instalment of this new series, FOCUS talks to leading energy technology company Baker Hughes about its commitment to revolutionising energy in China, the UK and beyond.

How and when did Baker Hughes enter the China market and what major successes and growth have you had during this time?

We started cooperation with China when Deng Xiaoping visited the Baker Hughes drill bit R&D centre in Houston in 1979 during his visit to the United States and took the most advanced drill bit (J44) to China.

In the nearly 45 years since then, we have been committed to the development of China’s energy industry. We have provided more than 150 compression systems for the China West-East Gas Transmission Pipeline project, which are running well so far. We have also participated in more than 20% of China’s shale gas exploration and development. Finally, we have in-depth cooperation with domestic Chinese companies as part of Belt and Road Initiative projects.

How is Baker Hughes contributing to the energy transition, both globally and in China?

As the pace of the global energy transition continues to accelerate, we have solidified our dual approach to implementing efficiency measures today and investing in new energy solutions for the future. We began to increase investment and deployment of related technologies in 2019 to balance the energy trilemma (energy affordability, security, and sustainability) and the challenge of energy efficiency and low-carbon energy utilisation, and ultimately achieve carbon neutrality.

We have expertise and specialist technologies to maximise energy supply whilst also reducing emissions. In addition to our company heritage in conventional oil and gas, we have been involved in carbon capture, utilisation and storage (CCUS) for more than a decade, including in some of the world’s largest offshore CCUS projects.

Our Subsea Centre of Excellence in Montrose, Scotland, for example, does not only manufacture equipment for the offshore UK and global oil and gas sector but has also manufactured subsea trees used in large-scale CCUS projects. Similarly, we have decades of experience in hydrogen technology, with more than 2,000 Baker Hughes hydrogen compressors currently in service globally.

From our perspective, driving and developing CCUS and hydrogen in China are one of the biggest focuses in our long-range playbook.

We are committed to continuously providing technical support for China’s energy needs, applying the most advanced low-carbon technology to achieve China’s dual carbon goals, and becoming the most reliable partner for China’s energy security and the most important technology leader in achieving the goal of carbon neutrality.

What is Baker Hughes’s involvement in the UK market?

Baker Hughes has a significant presence across the UK. Our 5,500 employees work at more than 30 sites nationwide, including in Aberdeen, Bristol, Leicester, Montrose and Newcastle. These operations support a network of over 3,000 UK suppliers, with whom we spend over £300 million annually.

We are the only large original equipment manufacturer (OEM) remaining in the UK for subsea energy production systems. Most of the products we manufacture in the UK are exported, including many large-scale infrastructure projects in the energy and oil and gas industries, as well as automation and digitalisation projects in China. During our 45 years of collaborating with three national oil companies and other state-owned enterprises in China, technologies and services from the UK have played a vital role in supporting our projects’ successes.

How have you worked with CBBC during your development in China?

Baker Hughes attaches great importance to the stable development of China-British trade. We became a premium member of CBBC in 2021 and have since relied on CBBC’s advantages in promoting China-British relations to help enhance Baker Hughes’ growth opportunities in the Chinese market. CBBC’s important role in helping shape bilateral relations between the UK and China through its close links to the UK Government and the devolved administrations, the Chinese Government, and the British and Chinese Embassies have been of great value to Baker Hughes and helped us to deliver more successes and business growth in China.

What are your ambitions and plans for the future in China?

Our strategy framework is focused on transforming our core to strengthen our competitiveness today, while investing for growth and positioning for new frontiers in the energy transition. Through this framework, Baker Hughes will build and execute the plan to deliver sustainable value for our shareholders and stakeholders in China and beyond.

The post Energy Technology Company Baker Hughes on 45 years in China appeared first on Focus - China Britain Business Council.

Businesses were shortlisted across seven different categories: Marketing Campaign of the Year; ESG Champion of the Year; Professional Advisory of the Year; Scottish Corporate in Hong Kong 2024; Chinese Corporate of the Year; The Dragon Award for Pioneering Spirit; and Educational Partnership of the Year.

Edinburgh Tourism Action Group (ETAG) won the newly launched Award for ‘Marketing Campaign of the Year’. The Award recognises ETAG’s success in launching Edinburgh’s first-ever Chinese social media campaign at the end of 2016 as part of its China Ready Programme to position Edinburgh as a must-visit destination and one of the most China-friendly destinations in the UK.

‘ESG Champion of the Year’ – sponsored by Diageo – was awarded to the Alliance for Water Stewardship (AWS), whose mission is to ignite and nurture leadership in credible water stewardship through a market-based system that guides, recognises, and rewards good water stewardship practice. AWS’s first site to achieve certification to the AWS Standard in 2015 was Ecolab’s Taicang facility in the critically stressed Tai Hu basin. Since then, AWS has steadily enabled more major companies and their suppliers to adopt the AWS Standard in China and established a China Representative Office in Shanghai in 2023.

The Award for ‘Professional Advisory of the Year’ went to Burness Paull LLP, an independent law firm with a dedicated China Desk. Burness Paull LLP’s goal is to build upon its strong track record in advising Chinese clients and become the go-to firm for Chinese clients investing in Scotland and the wider UK by providing tailored services and comprehensive support to bridge cultural and business gaps between the UK and China.

Another new award category for 2024 was ‘Scottish Corporate in Hong Kong’, which was sponsored by InvestHK London. The winner was Museum Context Hong Kong, whose exciting new partnership with Edinburgh’s literary gem, Elephant House, will lead to the launch of Elephant House International Hong Kong in 2024, with a further US$3 million investment going to create a uniquely immersive experience bringing together Museum Context’s Edinburgh merchandise with the story of the Elephant House and sharing this with the people of Hong Kong. 

‘Chinese Corporate of the Year’ was awarded to COES Caledonia (UK) Limited – a UK subsidiary of the Chinese maritime giant, the China Ocean Engineering Solutions Group (COES) – which has made significant investments in Scotland’s maritime sector. This investment in Scotland has been concentrated in state-of-the-art offshore construction engineering, heavy lift, deep sea dive, pipelay and subsea engineering, and new marine and offshore renewables vessels, totalling close to USD US$1 billion.

Another new category for this year’s ceremony was the ‘Dragon Award for Pioneering Spirit’, which was designed to recognise organisations pioneering partnerships between Scotland and China. Sponsored by Heriot-Watt University’s Scottish Confucius Institute for Business and Communication, the award went to Speech Graphics, which delivers pioneering facial animation technology to the entertainment industry. Over the past year, Speech Graphics has successfully deepened its connections between China and Scotland, notably establishing a partnership with GrowthEase, a leading provider of enterprise technology solutions in China. 

Finally, the ‘Educational Partnership of the Year’ Award went to the Zhejiang University – University of Edinburgh Institute (ZJE). Established in 2016, ZJE is the University of Edinburgh’s flagship overseas institution for education and scientific research and is based in Haining, Zhejiang Province in China. A £1 billion investment has provided purpose-built, state-of-the-art research, teaching, accommodation, and recreation facilities. The partnership facilitates an ambitious global biomedical research agenda between two well-matched world-leading universities with a common vision to develop the next generation of biomedical scientists and support biomedical innovation.

Now going into its 11th year, CBBC’s Chinese Burns Supper, in partnership with the Confucius Institute for Scotland at the University of Edinburgh, has become a permanent fixture in the China-Scotland business calendar. 

The event featured a fusion of Burns Night traditions with those of Chinese New Year as a backdrop for black-tie networking for the China-Scotland business and educational community. Guests were treated to a dynamic programme of entertainment, including the customary Address to a Haggis, a ‘Bian Lian’ (Face Changing) performance, a poetry recital of Earl of the River by Consul General Zhang Biao and Richard Lochhead MSP, and a Dragon Dance, amongst other performances. 

Funds were raised to support The Eric Liddell 100 (EL100), a programme of events and activities to recognise and celebrate the life, sporting, and community service achievements of Eric Liddell. It is being planned around 2024, the centenary of his historic success at the 1924 Olympic Games in Paris.

The Awards were generously supported and made possible by CBBC’s Partners and Sponsors: The Confucius Institute for Scotland at The University of Edinburgh; Hong Kong Economic and Trade Office; Scottish Enterprise; Scottish Development International; Heriot-Watt University; Diageo; Invest Hong Kong; Moutai China; Time Machine + Folks; Kinloch Anderson; Glencairn Crystal Studio Ltd; and Harris and Lewis Smokehouse.

The full list of Nominees for each award category is as follows:

Marketing Campaign of the Year

• Edinburgh Tourism Action Group, China Ready Initiative
• Emerging Comms
• Ningbo Orient Wires & Cables Co Ltd
• Commercial Cross Ltd

ESG Champion of the Year

• Logan Energy Limited
• Bakkafrost Scotland
• Alliance for Water Stewardship
• Beira
• Wood

Professional Advisory of the Year

• Burness Paull
• Harper Macleod LLP
• Opergy Scotland

Scottish Corporate in Hong Kong 2024

• Museum Context Hong Kong
• EGG Lighting
• Cashmaster

Chinese Corporate of the Year

• SANY Heavy Machinery (UK) Ltd
• COES Caledonia (UK) Limited
• ZZCOMM Technology (UK) Co. Ltd

Dragon Award for Pioneering Spirit

• Speech Graphics
• 126 Water for Whisky
• University of the West of Scotland

Educational Partnership of the Year

• University of Stirling – Partnership with Hebei Normal University
• University of Strathclyde – Partnership with Peking University 
• Edinburgh Napier University – Partnership with Shanghai Normal University 
• The University of Edinburgh – The Zhejiang University – University of Edinburgh Institute (ZJE).

The post CBBC Announces Winners of 2024 China-Scotland Business Awards appeared first on Focus - China Britain Business Council.

CBBC has announced a programme of activities to help UK companies make the most of this opportunity in 2024.

1 February: Meet China’s Premier Retailer Matro

China is the world’s second-largest luxury market, and despite headwinds, the prospects for luxury in China in 2024 are looking bright. For luxury brands entering the Chinese market, having a good retail partner is essential. Like Selfridges and John Lewis in the UK, Matro plays a very influential role in the Chinese retail rector. It operates two large high-end luxury stores in Suzhou, as well as “Boundless Matro”, a cross-border online-offline business platform for premium consumer products and international brands. On 1 February, CBBC will host Matro and offer CBBC members the chance to meet their business development team one to one.

Click here to register

1 February: CBBC Consumer Members Chinese New Year Mixer

Celebrate the upcoming Year of the Dragon at CBBC’s Westminster offices on 1 February. Hear what 2024 has in store for consumer brands in the Chinese market as outbound tourism rebounds and Beijing seeks to stimulate consumer spending. CBBC will also launch its new London Experience Guide for Chinese business and government visitors.

Click here to register

8 February: China Consumer Scotland 2024

Since 1996, Scotland’s total exports of goods to China have grown by more than 1,000% to £1 billion per year. Chinese consumers already have an appetite for Scottish products and brands, including whisky, textiles, seafood and tourism, and this appetite is only expected to grow. At China Consumer Scotland 2024 on 8 February, CBBC will bring together successful Scottish consumer brands and Chinese importers and retailers to share their tips for market entry and growth with brands looking to grow their sales to Chinese consumers.

Click here to register

14 October: China Consumer 2024

CBBC’s flagship China Consumer programme for 2024 will offer brands the tools to make the most of the China opportunity, both in terms of sales in China and translating success in China into global growth. Sponsorship is now open for a range of categories that align with the China Consumer opportunity, from UK and Chinese brand partners to live streaming sponsors and more. The deadline for sponsorship bids in 29 February 2024.

Click here to discover sponsorship opportunities

The post Unlocking the China consumer opportunity in 2024 appeared first on Focus - China Britain Business Council.

Below is an extract from CBBC Chair Sir Sherard Cowper-Coles’ foreword to the report:

I am delighted to introduce this Annual Report for 2022-2023, after a busy and successful year for the China-Britain Business Council. UK exports to China broke a new record in 2022, growing over 35% to £38 billion. Two-way trade was over £110 billion. This underlines the importance of the China opportunity for UK business. And at a time when rebuilding economic growth is the top national priority, and with exports and inward investment key drivers of that growth, it underlines the importance of the UK-China trade and investment relationship to the UK economy and employment.

While businesses felt the effect for some of the year of pandemic restrictions in China, the ending of lockdown measures in late 2022 helped set the stage for a welcome normalisation of business activity and for the further growth of this critical trade and investment relationship with the world’s second-biggest economy.

The China-Britain Business Council is proud of its role as the voice and the vehicle for this vital business relationship.

Meanwhile, geopolitical tensions had an impact on business confidence, with Russia’s invasion of Ukraine and, at the time of writing, the conflict between Hamas and Israel adding new elements to those geopolitical differences.

The China-Britain Business Council continued to support our members in navigating these challenges via the range of Membership activities and services we provide, and by championing the importance of the UK-China business relationship.

In the UK, we stepped up our public affairs work, highlighting to UK policymakers and opinion formers the importance to the UK economy of the trade and investment relationship with China. The impact of trade with China is substantial: some 800 Chinese enterprises in the UK directly employ more than 75,000 people nationwide. Research shows that our exports to China support – at a conservative estimate – a further 120,000 jobs.

In early 2023, the British Government released its ‘Refresh’ of the Integrated Review. We were pleased to see that, in regard to China, alongside the recognition of the need for the UK to protect its national security interests and stand up for its values, there was recognition that “…. a positive trade and investment relationship can benefit both the UK and China”.

We are encouraged by the positive context this sets for further developing the UK-China business relationship. A sound economic relationship with China is a foundation which allows the UK to pursue its broader goals with China. And that relationship means globally competitive companies, employment, and prosperity right across the UK.

Read CBBC’s Annual Report 2022-2023 in full here

The post Read CBBC’s Annual Report 2022-2023 appeared first on Focus - China Britain Business Council.

Over the past year, we have seen a gradual rapprochement of Western relations with China, including the UK, after a few years of tense relations and largely constructive introspection. This was particularly the case over the last four months with James Cleverly’s visit to Beijing and the Biden-Xi meeting in San Francisco. And March’s Integrated Review refresh helped to provide some much-needed structure to the UK government’s approach to relations with China.

The volume and seniority of inward visits coming to China has been high and sustained throughout the year, with global executives, state leaders and the trade delegations making their way here. The last quarter of 2023 felt much like 2019 in terms of business programming and traffic flow in China.

Meanwhile, the landscape remains mixed for British businesses operating in China, with three distinct investor profiles emerging:

1. Confident and investing: This group consists primarily of the largest UK investors in China as well as those with significant market share or revenue exposure. In most cases, this group operates local business units that have grown over multiple decades. A sizable number of SMEs with strong market fit also fall into this category. Larger investments by this group that CBBC has supported in 2023 range from $100 million (£78.4 million) to upwards of $1 billion (£784 million) and more announcements are anticipated for 2024.

2. Hesitant but growing: The largest of the three groups and consisting of a wide body of sectors and company sizes. The hesitancy tends to be concentrated at the HQ level rather than local and is due to a combination of geopolitics, sluggish domestic and international economic outlook, or commercial considerations (competition, pressure on margins, regulation, etc.). Add also the fact that British companies tend to lean more conservative than our comparators, such as those from the US.

3. Recovering revenue or struggling for growth: Companies in this group are often facing strong headwinds from competition and regulatory barriers, economic challenges such as the real estate crisis and/or weak demand, or are still working to recover revenues from the impact of Covid restrictions. This group is generally not considering leaving China and is instead reorienting its strategic approach to return to a growth trajectory. In a very small number of cases, companies have decided to exit – although this is not uncommon in any given year due to mostly commercial failure. However, in one case, a company (Graphcore) did opt to exit China this year due to US semiconductor controls in a rare case of a UK company getting caught directly in the crossfire of geopolitics.

As we head into 2024, talk will continue to focus on the performance of the Chinese economy and potential risks (real estate, local Government debt levels, domestic demand, oversupply) in addition to recovering investor confidence among both domestic and foreign investors. This was also the focus at the beginning of 2023, when I wrote an article reflecting on the long-term challenges the current mix of headwinds present for China.

The Chinese Government will continue to take steps to reassure investors of their commitment to supporting the economy and, in particular, the private sector. This will have a positive effect; however, any shift in sentiment is likely to be gradual due to continued uncertainty around geopolitics and the macroeconomy.

Regardless, foreign MNCs with significant traction in China will continue to invest into their operations in the pursuit of growth. R&D and M&A will be a major focus as a way to counter the increasing fronts of competition with domestic companies. Localisation will remain a major theme. MNCs will also turn to more creative ways of financing investments in China, including through local banks (see BASF’s recent RMB 40 billion syndicated bank loan as a leading example) motivated by comparatively cheaper rates and the need to commit cash to other key markets.

China will remain a critical front for the future of many MNCs as a focal point for facing up to competition, innovating technology and services, and maintaining or growing global market share.

I also expect we will see an uptick in investment activity into the UK from China, both by State-owned and private investors. This investment will be aimed towards renewables, batteries and EVs — all areas the UK Government is actively promoting — but also consumer and niche segments of healthcare, manufacturing and technology. This is despite continued concerns among Chinese investors regarding the degree to which their investment is still welcome. More work is required to shift this perception, and CBBC will continue to play a central role on this front.

Meanwhile, trade between the UK and China will continue to perform strongly in 2024 and likely set new records, both in terms of exports and imports. UK exports to China had a bumper 12 months up to the end of September, growing by +10.6% to £138.6 billion (inc HK) — the highest 12 months on record. UK exports grew a staggering 71% to £44.4 billion in this period.

Nevertheless, despite the overall positive outlook for growth of UK-China trade, export controls will remain a challenge for many UK exporters. Clearly, more work needs to be done to improve the process. Again, this will form a core focus for CBBC’s work to support our members next year.

It’s been a productive year for CBBC across China and the UK. As a bilateral trade and investment organisation, we thrive on engagement, so 2023 was like taking a big dose of medicine. I look forward to continuing to build upon this momentum into 2024, my seventeenth year in China, and beyond.

The post The Year in UK-China Relations appeared first on Focus - China Britain Business Council.

The Visit

On the visit, CBBC Chair Sir Sherard Cowper-Coles and I were accompanied by a number of CBBC Board members, as well as local representatives of CBBC member companies.

The itinerary was intensive: starting with two days in Shenzhen, including holding CBBC’s first UK-Greater Bay Area Conference; then onto Shanghai, Nanjing, Suzhou and Beijing (and in my case, fitting in Ningbo and Tianjin on top). I also visited Hong Kong, reflecting the CBBC Board’s decision that we should be taking the Hong Kong dimension to UK-China trade more into account in our work.

Throughout the visit, we were received at a very senior level, the highlight being a meeting with Vice Premier He Lifeng. We also met, amongst others, the Ministers of Industry and Information Technology (MIIT) and of Financial Regulation (NFRA); the Governor of Jiangsu province; Party Secretaries (i.e. the most senior official) in Shenzhen, Nanjing and Suzhou, and the Vice Mayor of Shanghai.

The tone of these meetings was uniformly positive. It is clear that reviving foreign investment and trade flows is a priority for China both at the local and State government levels. In all our meetings, there were positive references to further improving the environment and opportunities for foreign investors.

I was also struck by how often increasing China’s imports and the size of the Chinese market for UK exporters was stressed. We took the opportunity to urge further movement to create a genuine level playing field for international business and that wherever possible, ‘national’ treatment should apply – i.e., that foreign business should be able to operate on the same basis as domestic business. We also urged the greatest possible policy clarity and certainty, including in areas such as data.

During the visit there were positive references to the appointment of Lord Cameron as Foreign Secretary – this being seen by both officials and private individuals as a good sign for the UK-China business environment.

We were also able to meet a wide range of CBBC member companies, including at the well-attended openings of our new offices in Beijing and Shanghai. The move to the new and much improved offices is a statement of CBBC’s commitment to our work across China on behalf of our members.

Photos: CBBC, in collaboration with the Qianhai International Talent Hub, hosted the inagural UK-Greater Bay Area Conference in Shenzhen on 21 November

Economy

On the economy, the picture is clearly mixed. Vice Premier He expressed confidence that China would achieve its 5% GDP growth target this year (and it is worth remembering that in an economy the size of China’s, 5% growth would create a new Switzerland).

However, problems in China’s real estate sector have been well documented. We saw evidence of this in ‘ghost towns’ – uncompleted or unoccupied property developments on the outskirts of a number of cities – whilst we were travelling on the high-speed train from Nanjing to Beijing. This clearly has implications in a number of areas, including local government finance, the construction industry, and consumer confidence.

The recovery of consumer demand, in particular from amongst the broader middle class, has been slower than anticipated at the start of 2023. Meanwhile, investment activity by the domestic private sector remains weak as confidence has yet to recover following a prolonged period of difficulty resulting from a combination of regulations and Covid restrictions.

On the other hand, demand from affluent and young consumers remains strong. Most impressive to me was the continued emergence of Chinese technology-led companies, often heavily IP-based, and with cutting-edge innovation and ambition to scale at speed. This was particularly visible in the low/zero carbon area, with a wide array of new NEV auto brands present on China’s roads but also in batteries and broader renewables technologies.

Sir Sherard Cowper-Coles met with Shanghai Vice Mayor Xie Dong on 22 November in Shanghai

UK Business

The weakness in Western portfolio investment into China has been widely reported. Real businesses doing real business in China seem to be taking a different view. It became clear during the visit that a number of CBBC’s larger member companies have made major investments in China over the past year, including AstraZeneca, IHG, GSK, HSBC, Johnson Matthey, and JLR.

A common theme when talking to UK businesses on the ground was that they could not not be in China, that they were continuing to invest because of the market’s size, scale and expected growth level over the coming decades, and because in many sectors technology being deployed by Chinese players was world-leading. For many companies to remain globally competitive, they must be active in the Chinese market.

Sir Sherard Cowper-Coles spoke at the China International Supply Chain Expo in Beijing

The Role of the China-Britain Business Council

The visit also demonstrated the collective weight of voice that CBBC represents and the unique and pivotal position it has in the UK-China business relationship.

In Beijing, Sir Sherard Cowper-Coles gave a speech at the opening of the inaugural China Global Supply China Conference, which was opened by Premier Li Qiang. CBBC was the only national trade body invited to speak at this ceremony, while Sir Sherard sat next to Premier Li.

That weight comes from the support and engagement provided by you as CBBC members. This enables CBBC, in turn, to fulfil its role as the voice of, and advocate for, the economic relationship between the UK and China.

I am very grateful for the strong support we received from many CBBC members during the visit. It was a real pleasure to be able to meet so many of you at our meetings, roundtables and at the openings of our new offices. We really are blessed to have such a vibrant and energetic community of members across China.

Looking ahead, we will be building on the success of this November as we move into next year and are already looking at options for the next visit. We look forward to discussing it with you and hearing your ideas and suggestions on how we can build another impactful and productive programme.

On behalf of everyone at the CBBC, we wish you a very Merry Christmas and a Happy New Year, and look forward to continuing to work with you closely in 2024 and beyond!

The post Andrew Seaton on the CBBC Chair’s November Visit to China appeared first on Focus - China Britain Business Council.

Meetings and Events in the Greater Bay Area (GBA)

For the first stop of the visit, Sir Sherard met with Shenzhen Party Secretary Meng Fangli on Monday, 20 November.

Meng Fanli welcomed Sir Sherard and the delegation and gave a brief overview of Shenzhen’s social and economic development. He said that he hopes CBBC will continue to serve as a bridge, establish closer ties with Shenzhen in areas like trade, investment, finance, technology and culture, and encourage interactions between cities, businesses, institutions, and more.

Sir Sherard expressed optimism about Shenzhen’s remarkable development over the past 40 years, saying: “CBBC is committed to utilising its advantages to help British businesses gain a better understanding of Shenzhen.”

Sir Sherard conducting a meeting with the Tencent team in Europe and China

Later the same day, Sir Sherard and Andrew Seaton visited Hetao Shenzhen-Hong Kong Science & Technology Innovation Zone with Huang Wei, Party Secretary of Futian District, and before engaging in a discussion with Henry Rong, Associate Director, I&T Ecosystem Development Greater Bay Area of Hong Kong Science and Technology Parks Corporation (HKSTP), accompanied by Zhu Jiang, Deputy District Governor of the Shenzhen Futian District People’s Government. Sir Sherard then toured the Tencent Exhibition Hall and conducted a meeting with the Tencent team in Europe and China.

Sir Sherard speaking at the welcome dinner for the UK-GBA conference

In the evening, CBBC hosted the Welcome Dinner for the UK-GBA Conference with over 50 attendees from the governments and businesses of the UK and China. During the dinner, Sir Sherard highlighted that “the British business community is watching the development of the GBA with huge interest, considering it to be an important driver for their China operations.”

On Tuesday, 21 November, CBBC hosted the inaugural UK-GBA Conference in Shenzhen in collaboration with the Qianhai International Talent Hub. 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, GBA local governments, and senior representatives from British and Chinese companies based in the UK, cities in the Chinese mainland, and Hong Kong.

Andrew Seaton speaking at the UK-GBA Conference

In his opening remarks, Sir Sherard emphasised the abundant opportunities in the GBA. 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.”

Meetings and Events in the Yangtze River Delta

Sir Sherard meeting with Shanghai Vice Mayor Xie Dong

On the first day of the delegation’s visit to Shanghai on Wednesday, 22 November, Sir Sherard met with Shanghai Vice Mayor Xie Dong.

During the meeting, Sir Sherard emphasised CBBC’s determination to maintain a healthy and stable bilateral trade link and expressed CBBC’s dedication to collaborating with Shanghai under the MoU signed with InvestSH.

Subsequently, Sir Sherard and the delegation visited Fosun, a premium member of CBBC, where they were hosted by Thomas Tam, Co-Chairman of GreaterYuGarden Commercial Properties Group.

The UK Investment Roundtable brought together a group of existing and potential Chinese investors in the UK

Continuing their visit, CBBC hosted the UK Investment Roundtable, aiming to gain insights from Chinese investors on the UK as an investment destination. Additionally, CBBC shared how it and its members can support Chinese investors in doing business in the UK. Attendees included Chinese investors Fosun, Nanjing Jufeng, Yigu Tech and Zero Carbon System, along with CBBC members DLA Piper, Deloitte, PwC, and KPMG.

Cutting the ribbon on CBBC’s new Shanghai office

Sir Sherard and Andrew Seaton also cut the ribbon on CBBC’s new Shanghai office in the Oriental Center next door to Taikoohui on Nanjing West Road alongside Dame Caroline Wilson, HM Ambassador; Matt Burney, British Consul-General Shanghai; Zhu Yi, Deputy Director of the Shanghai Municipal Commission of Commerce; Duncan Clark, Vice Chair, CBBC; and Tom Simpson, Managing Director, China, CBBC.

The following morning, on Thursday, 23 November, Andrew Seaton departed for Ningbo and visited the future factory of Orient Cable and explored ways to support Orient Cable’s growth in the UK.

Sir Sherard meeting with Jiangsu Provincial Governor Xu Kunlin (image captured from video recorded by Jiangsu Television)

Also on Thursday, 23 November, Sir Sherard met with Jiangsu Provincial Governor Xu Kunlin. The meeting was joined by Lu Deming, Secretary General of Jiangsu province, and Matt Burney, British Consul General in Shanghai.

Xu Kunlin welcomed Sir Sherard and the delegation and expressed appreciation for CBBC’s support of Jiangsu and the UK’s trade and economic cooperation. Xu hopes for more British investment and business expansion in Jiangsu, especially in fields like scientific innovation, financial services, green energy and the digital economy.

Sir Sherard recognised Jiangsu’s economic strength and positive growth momentum. He stressed that CBBC and its members will continue to seek out opportunities in Jiangsu.

Sir Sherard meeting Suzhou Party Secretary Liu Xiaotao

Sir Sherard also met with Suzhou Party Secretary Liu Xiaotao. The meeting was joined by Ji Jing, Vice Mayor of Suzhou.

Liu recognised the solid foundation and significant potential in economic and trade cooperation between Suzhou and the UK. He hoped that CBBC will continue to play its role as a bridge, inviting more multinational companies to expand their investment in Suzhou. Suzhou expects a stronger presence of British companies and encourages them to launch new goods, technologies and projects in the city.

Sir Sherard highlighted that Suzhou is a beautiful and prosperous city by the water that offers a favourable business environment and abundant opportunities.

Sir Sherard meeting Nanjing Party Secretary Han Liming

On Friday, 24 November, Sir Sherard met with Nanjing Party Secretary Han Liming. It was agreed that both parties would continue to work together in the areas of finance, telecommunications, and the chemical industry while looking for new opportunities to collaborate in trade, technology, culture & tourism, biomedicine, digital economy and green energy. Since the founding of CBBC’s Nanjing office in 2004, CBBC has supported British companies operating in Nanjing as well as Nanjing companies growing internationally.

Meetings and Events in Beijing

Group photo of senior representatives of CBBC and member companies in front of the Great Hall of the People

On Monday, 27 November, Sir Sherard, met with Vice Premier He Lifeng at the Great Hall of the People in Beijing. They discussed international cooperation in supply chains, as well as UK-China economic and trade cooperation.

Vice Premier He Lifeng said that China is dedicated to opening up and development. It is hoped that CBBC will continue to leverage its advantages to enhance trade and economic cooperation between the two countries. Sir Sherard echoed this sentiment, saying: “CBBC welcomes the opportunity to meet with Vice Premier and discuss British trade and investment with China. CBBC will continue to provide a platform for engagement between British business and our partners in Government and business here in China.”

Sir Sherard and Andrew Seaton meeting Li Yunze, Minister of the National Financial Regulatory Administration (NFRA)

Sir Sherard also met with Li Yunze, Minister of the National Financial Regulatory Administration (NFRA) at their office in Beijing. The discussion covered market access for foreign financial institutions, pensions and asset management, wealth management, the prospect of continued regulatory liberalisation, and green and sustainable finance.

Sir Sherard also met with Jin Zhuanglong, Minister of Industry and Information Technology (MIIT) to discuss topics including digitalisation, AI, new energy vehicles, and green transition. During the meeting, Sir Sherard and Jin Zhuanglong reflected on the outcomes of CBBC and MIIT’s collaboration under the framework of the first UK-China Industrial Cooperation Dialogue (ICD) in critical areas of new technologies.

Cutting the ribbon on CBBC’s new Beijing office

While in Beijing on 27 November, Sir Sherard and Andrew Seaton officially opened CBBC’s new Beijing office at an event alongside Geraldine McCafferty, Deputy Head of Mission, British Embassy Beijing; Yang Song, Deputy Director-General, China Economic Cooperation Center (CECC); Tang Yonghong, Deputy Director-General, Invest Beijing; Zhou Xiaoyan, Vice President, China Council for International Investment Promotion (CCIIP); and Tom Simpson, Managing Director, China, CBBC. After 20 years in the China Life Tower, the CBBC Beijing office has relocated to Guanghua Soho II in Guomao.

Sir Sherard giving a speech at the opening ceremony of the China International Supply Chain Expo

On Tuesday, 28 November, Sir Sherard attended and spoke at the inaugural China International Supply Chain Expo & Global Supply Chain Innovation and Development Forum. In his speech at the opening ceremony, Sir Sherard said: “Building a stable, secure, and smooth worldwide industrial supply chain system represents the common aspiration of global businesses and it is the shared responsibility of the international community. I am delighted that UK-China relations are once again starting to flourish, with ministerial visits resuming – I am confident that we will see more engagement at all levels over the coming year.”

Image sources:

1. Lead article image captured from this video recorded by CCTV 1
2. Image of Sir Sherard meeting Jiangso Governor Xu Kunlin captured from this video recorded by Jiangsu Television

The post Recap: CBBC Chair and Chief Executive November 2023 Visit to China appeared first on Focus - China Britain Business Council.