brexit Archives - Focus - China Britain Business Council https://focus.cbbc.org/tag/brexit/ FOCUS is the content arm of The China-Britain Business Council Wed, 23 Apr 2025 10:21:02 +0000 en-GB hourly 1 https://wordpress.org/?v=6.9 https://focus.cbbc.org/wp-content/uploads/2020/04/focus-favicon.jpeg brexit Archives - Focus - China Britain Business Council https://focus.cbbc.org/tag/brexit/ 32 32 Quick guide to the EU-China Comprehensive Agreement on Investment https://focus.cbbc.org/guide-to-eu-china-comprehensive-agreement-on-investment/ Tue, 19 Jan 2021 06:28:13 +0000 https://focus.cbbc.org/?p=6888 It could hardly have been a busier end to 2020 for Europe’s trade negotiators. A post-Brexit agreement with the UK signed just before Christmas ended up being merely an hors d’oeuvre to what the European Commission has described as its ‘most ambitious’ deal ever with a third party – a Comprehensive Agreement on Investment (CAI) with China. At the beginning of 2020, an agreement between the European Union and China…

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It could hardly have been a busier end to 2020 for Europe’s trade negotiators. A post-Brexit agreement with the UK signed just before Christmas ended up being merely an hors d’oeuvre to what the European Commission has described as its ‘most ambitious’ deal ever with a third party – a Comprehensive Agreement on Investment (CAI) with China.

At the beginning of 2020, an agreement between the European Union and China on investment seemed a distant prospect. After the 26th round of negotiations held in January, then trade commissioner Phil Hogan said that China’s offer was below expectations and that key issues – such as industrial subsidies and foreign technology transfer – remained unresolved.

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However, by the end of the year, it was a done deal. The agreement, announced on 30 December by EC president Ursula von der Leyen after a video conference with Chinese President Xi Jinping, has been years in the making and came just at the end of Germany’s presidency of the EU. Germany’s chancellor Angela Merkel, who is expected to step down in 2021, has long been a proponent of the CAI.

The final text of the CAI, which has not yet been published, is expected to be signed during the French presidency of the EU presidency in 2022. On the Chinese side, the agreement was praised as an important step towards promoting further opening-up and higher investment standards, according to the Global Times.

The CAI includes new level-playing field provisions and introduces a unified arbitration mechanism for all member states

The CAI is not a full-scale trade agreement: as its title suggests, it mainly concerns issues around mutual investment in the EU and China. Proponents of the agreement point to the fact that it locks in China’s past market reforms and commitments to safeguarding foreign investment, as well as the further opening-up of new sectors such as auxiliary air transport services, cloud services, and private health services. Furthermore, the CAI includes new level-playing field provisions and introduces a unified arbitration mechanism for all member states.

The agreement should have positive spill-over effects for UK businesses, as it puts pressure on Chinese lawmakers to further liberalise the country’s economy. The signing of the CAI could also make it easier for the UK to update its own outdated bilateral investment treaty with China.

launchpad CBBC

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How the UK’s new immigration rules help your Chinese employees https://focus.cbbc.org/new-uk-immigration-rules-good-for-china-business/ Mon, 18 Jan 2021 07:19:45 +0000 https://focus.cbbc.org/?p=6877 Yash Dubal, Director at A Y & J Solicitors explains the new UK immigration system and how it relates to business with China: Members and affiliates of CBBC will be all too aware of some of the challenges faced by organisations that do business with China arising from decisions made in Westminster. The ramifications of political decisions can sometimes be problematic. One piece of recent policy that bucks the trend, however, should…

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Yash Dubal, Director at A Y & J Solicitors explains the new UK immigration system and how it relates to business with China:

Members and affiliates of CBBC will be all too aware of some of the challenges faced by organisations that do business with China arising from decisions made in Westminster. The ramifications of political decisions can sometimes be problematic.

One piece of recent policy that bucks the trend, however, should be welcomed as, in contrast to the perceived zeitgeist, it creates an opportunity to build stronger links with the country.

The new immigration legislation is designed to attract the ‘brightest and best’ workers from around the world and creates a points-based system, similar to that of Australia’s. It has been introduced following Brexit and the end of the free movement of people and workers between the UK and the EU. It is designed to make Britain a more attractive business environment globally. The new regime can be confusing however, and there are several considerations businesses that trade or employ internationally need to be aware of.

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The most relevant aspects to consider are the types of visas now available for Chinese migrants and investors, and the statutory requirements that organisations employing overseas workers must fulfil.

In relation to the latter, any business which plans on employing personnel from China, and any other country, must be approved by the Home Office. In government terms, they must be licensed to sponsor visa holders, i.e. foreign workers. To gain Home Office approval, businesses first need to register with the Home Office, which then checks eligibility. To be granted sponsor status, businesses must meet certain criteria. The process can be done online here.

To be eligible, applicants cannot have unspent criminal convictions for immigration offences or certain other crimes, such as fraud or money laundering, or have had a sponsor licence revoked in the last 12 months. Applicants also need appropriate systems in place to monitor sponsored employees. Applications are reviewed by UK Visas and Immigration (UKVI) and supporting documents are also required. Many businesses find it easier to use the services of immigration and visa consultants who can help save time and maximise the chances of a successful application.

Having a job offer for a skilled position from an approved employer will earn 40 points. Being able to speak English gets 10 points. The magic number to reach before a visa is issued is 70.

The most recent figures issued by the government show that only a small percentage of UK businesses are on the approved sponsor list. There are just over 32,000.

As an approved sponsor, members can hire employees through the skilled worker visa route. These visas allow qualifying applicants to come to the UK to work. To qualify for a skilled worker visa, applicants must meet certain criteria, each of which is scored. For example, having a job offer for a skilled position from an approved employer will earn 40 points. Being able to speak English gets 10 points. A salary offer of at least £25,600 gets 20 points. The magic number to reach before a visa is issued is 70.

Another popular visa route that those with links to China should be aware of is the Tier 1 Investor Visa. This provides a route into the UK for high-net-worth individuals who wish to invest in Britain. To qualify, applicants must have least £2 million of their own money held in a regulated financial institution and available for immediate dispersal in the UK. They must also have a UK bank account at a regulated bank, be at least 18 years old and able to prove that the investment funds belong to them, their spouse or legal partner.

The other types of visa that CBBC members should be aware of are Global Talent Visas and Sole Representative Visas.

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The Global Talent Visa is an immigration route for individuals with a proven track record as ‘recognised leaders’, or show promise as being ‘emerging leaders’, in the fields of science, the humanities, engineering, the arts or technology.

The Sole Representative Visa is available for representatives of overseas businesses if they are either the sole representative planning to set up either a UK branch or wholly owned subsidiary, or an employee of an overseas newspaper, news agency or broadcasting organisation posted on a long-term assignment to the UK.

Despite recent headlines about friction between the UK government and Chinese technology firms, the signs are still positive if recent statistics are anything to go by. Indeed, Chinese IT workers and tech investors have been approved for UK visas at a higher percentage than any other nation, according to new data.

Figures released by Tech Nation reveal that last year, while the number of Chinese nationals applying to work or invest in the UK IT and technology sector has dropped, those that did apply enjoyed a higher visa approval rating than nationals from any other country. Of the 77 who applied under the Global Talent Visa route, 86% were approved. The low number of applicants is more likely to be due to restrictions caused by the pandemic, rather than any political concerns.

Chinese IT workers and tech investors have been approved for UK visas at a higher percentage than any other nation, according to new data

The figures show there are favourable conditions no matter what nationality applicants are, and that Britain is still very much open for business and remains a lucrative place for IT and tech firms to expand into. Chinese IT specialists are particularly attractive to UK employers.

The advantage of these immigration changes for those with commercial interests in China is that all firms should theoretically now be operating on a level playing field. Previously, organisations with interests in the EU, and those that employed EU workers, had an advantage. Now everyone is equal, and that should ultimately be good for business for CBBC members.

For more information visit AY&J Solicitors or email: contact@ayjsolicitors.com

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Ensure your business is Brexit prepared with the new UKCA mark https://focus.cbbc.org/what-is-new-ukca-mark/ Wed, 23 Dec 2020 14:28:37 +0000 https://focus.cbbc.org/?p=6744 Businesses that sell goods into the UK will need a United Kingdom Conformity Assessment (UKCA) Mark from 1 January 2021 The United Kingdom formally left the European Union on January 31, 2020 and the year-long transition period that allowed continuity of rules and regulations ends on December 31, 2020. This includes the rules surrounding the conformity of marking and assessment of products. Although the UK and EU are attempting to…

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Businesses that sell goods into the UK will need a United Kingdom Conformity Assessment (UKCA) Mark from 1 January 2021

The United Kingdom formally left the European Union on January 31, 2020 and the year-long transition period that allowed continuity of rules and regulations ends on December 31, 2020. This includes the rules surrounding the conformity of marking and assessment of products.

Although the UK and EU are attempting to negotiate an agreement in relation to the regulatory regime after the transition period, plans are also being implemented for the introduction of a United Kingdom Conformity Assessment (UKCA) Mark in the event that a deal is not reached.

What is the UKCA Mark?

The UKCA mark is a new conformity mark for goods intended to be placed on the market in England, Wales and Scotland. This compliance mark will replace the existing European CE mark. (Goods being sold on the Northern Ireland market fall under a slightly different jurisdiction. See the table below). UK regulations have been amended to broadly replace references to the CE mark with reference to the UKCA mark and the role of ‘Notified Bodies’ will be replaced with ‘UK Approved Bodies.’

 

The table below illustrates the accepted markings in each relevant market.

Who is the UKCA Mark for?

Whether you are a manufacturer, importer or distributor, it is important that you ensure that products brought into the UK have the new mark.

Businesses are encouraged to be ready for full implementation of the new UK regime as soon as possible after 1 January 2021. However, there will be a one year period where both the UKCA or CE mark will be accepted for products shipped before 1 January 2021. The UKCA mark will entirely replace the CE mark at the end of 2021.

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When do you need to use the UKCA mark?

Companies will need to use the new UKCA mark if all of the following apply:

  • The product is for the market in Great Britain
  • The product is covered by legislation which requires the UKCA marking
  • The product requires mandatory third-party conformity assessment
  • The product’s conformity assessment has been carried out by a UK conformity assessment body and you haven’t transferred your conformity assessment files from your UK body to an EU recognised body before 1 January 2021.

This does not apply to existing stock, for example, if the product was fully manufactured and ready to place on the market before 1 January 2021. In these cases your goods can still be sold in Great Britain with a CE marking, even if covered by a certificate of conformity issued by a UK body.

How should you use the UKCA mark?

In most cases, the UKCA mark must be applied to the product itself or to the packaging. In some cases, it may be placed on the manuals or on other supporting literature. This will vary depending on the specific regulations that apply to the product.

The following general rules apply:

  • UKCA markings must only be placed on a product by the manufacturer or an authorised representative (where allowed for in the relevant legislation)
  • When attaching the UKCA mark, the company takes full responsibility for the product’s conformity with the requirements of the relevant legislation
  • The company must only use the UKCA mark to show product conformity with the relevant UK legislation
  • The company must not place any marking or sign that may misconstrue the meaning or form of the UKCA marking to third parties
  • The company must not attach other marks on the product, which affect the visibility, legibility or meaning of the UKCA Mark
  • The UKCA Mark cannot be placed on products unless there is a specific requirement to do so in the legislation.
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Brexit: What you will need to consider or be prepared

  1. The new conformity assessment requirements:
  • The UK Government has confirmed that UKCA marking comes into force from 1 January 2021. However, to allow businesses time to adjust to the new requirements, the existing CE marking is allowed to be used until 1 January 2022 in most cases.
  • After 1 January 2022, the UK will stop recognising the CE mark or conformity assessment activities that have been performed by EU27 Notified Bodies.
  • The new UK legislation requires product conformity assessment activities to be performed by an entity or Assessment Body located in the UK.
  • Likewise, the EU will not recognise conformity assessment activities performed by Notified Bodies in the UK for products placed on the market on and after 1 January 1 2021. And The EU will not recognise the ‘UKCA’ mark.
  • EU Directives require some activities to be performed by entities located within the EU/EEA.
  1. The timeline:

Note: This graphic does not include timescales for marine equipment, medical devices or IVDs.

Manufacturers will need to carefully consider the implications of Brexit on the conformity of their products and take appropriate action to ensure that all declarations are made correctly and on time. Although there is a transition period, it is essential that companies complete the new requirements as soon as possible. Manufacturers will also need to ensure that various partners within the supply chain are located in the correct territory.

  1. Making contact with the ‘Conformity Assessment Bodies’ 

On January 1, 2021, UK-based Notified Bodies will automatically become ‘Appointed Bodies’ under the UKCA legislation. Any UK Notified Body-issued certificates that have not been transferred to an EU27 Notified Body, will automatically become valid as a means for illustrating conformity under the UK Regulations to which they apply: Reaching out to Conformity Assessment Bodies is always recommended if there are questions.

 

This article was written by BSI. BSI is appointed by the UK Government as the national standards body, holds the Royal Charter, and represents UK interests at the International Organisation for Standardisation (ISO), the International Electrotechnical Commission (IEC) and the European Standards Organisations (CEN, CENELEC and ETSI).

BSI’s role as the UK National Standards Body is to help improve the quality and safety of products, services and systems by enabling the creation of standards and encouraging their use. We represent UK economic and social interests across all European and international standards organisations and in the development of business information solutions for British organisations of all sizes and sectors.

BSI is also a Certification Body and Notified Body. For UKCA Services, BSI is an approved body (0086) for the UKCA Mark and can work with you on the required conformity assessment procedures that will allow you to affix the UKCA marking under the following areas:

Learn more about BSI Services and the new UKCA Mark. At the time of writing, guidelines and timelines regarding UKCA marking for Medical Devices and IVD’s differ to those for the products listed above.

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How to protect your IP in time for Brexit https://focus.cbbc.org/how-to-get-your-ip-protected-in-time-for-brexit/ Thu, 26 Nov 2020 09:30:11 +0000 https://focus.cbbc.org/?p=6528 Trademark and design rights in the EU are changing, so it’s essential to ensure your IP rights are protected in a changed European Union, write Deborah Maxwell and Cameron Malone-Brown of Potter Clarkson LLP From 31 December 2020, registered EU trademarks (EUTM) and Community design rights (RCD) will no longer be valid in the UK. The UKIPO will create equivalent UK ‘cloned’ rights. All pending and future EUTMs and RCDs…

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Trademark and design rights in the EU are changing, so it’s essential to ensure your IP rights are protected in a changed European Union, write Deborah Maxwell and Cameron Malone-Brown of Potter Clarkson LLP

From 31 December 2020, registered EU trademarks (EUTM) and Community design rights (RCD) will no longer be valid in the UK.

  • The UKIPO will create equivalent UK ‘cloned’ rights.
  • All pending and future EUTMs and RCDs will no longer extend to the UK. A separate right will be required to secure protection in the UK.

With the end of the transition period fast approaching, it is important to get ahead and consider how you will secure protection – both in the EU and the UK.

Five areas of focus

Navigating the changes to the European IP landscape does not have to be complicated. Here, we take you through the key changes and explain how to ensure your rights remain protected and enforceable when the UK exits the EU.

Understanding UK cloned rights

Registered EUTMs and RCDs will cease to apply in the UK from 1 January 2021, but the UK Intellectual Property Office (UKIPO) will automatically create equivalent “cloned” national rights.

Where an EUTM that is older than 5 years is not used in the UK, the cloned UK right will not be immediately vulnerable to cancellation for non-use. For the first 5 years (until 2025 year-end), genuine use of the mark in the EU prior to 31 December 2020 will be taken into consideration by the UK IPO.

The same applies to claims of reputation; where an EU trade mark has notoriety in the EU, the cloned UK right will also benefit from this reputation, at least initially.

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Pending applications

New applications for both EUTMs and RCDs are likely to be pending at the end of the transition period, so now is the time to consider how you will ensure protection in the UK.

Applicants must apply for an equivalent UK trade mark and/or design within nine months from the end of the transition period to maintain protection in the UK.  If this deadline is missed, then ultimately, the rights will be lost in the UK.

Managing opt-outs

If the owner of a registered EUTM or RCD does not wish for a UK clone to be generated, it must ‘opt out’. Companies like ours are already reviewing client portfolios to ensure ‘opt outs’ are not converted to UK rights.

As a reminder, if an ‘opt out’ is not filed, the UKIPO will automatically generate the clone with no further notice to the EUTM/RCD holder.

If an ‘opt out’ is not filed, the UKIPO will automatically generate the clone with no further notice

Oppositions

It is important to identify ongoing EU oppositions that rely on UK rights, as it could impact on your desired outcome. EU trademark proceedings which are based solely on a UK registered or unregistered right will be terminated at the end of the transition period, as the earlier rights will no longer be relevant. UK trademark proceedings that are based on EU trademarks will see the unitary rights replaced with the cloned UK rights.

This is crucial when formulating opposition strategy between now and the New Year. If an EU trademark is available to include as an earlier right in an EU proceeding, it may well be worth including it as a ground of opposition, even where the merits are weaker than a UK national right.

Licensing & commercial agreements

Ensure IP agreements currently in negotiation adequately deal with Brexit – these should clearly state whether or not it is intended to cover the UK and any future UK cloned rights. This can be accomplished by:

  • Expressly including the UK in the agreement’s territory, rather than simply referring to the EU as it currently exists.
  • Stipulating that EUTM/RCDs listed in an agreement are considered to include the impending cloned UK rights.
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At a glance action list

To ensure that the end of the transition period does not leave gaps in your IP portfolio, it is recommend that you:

  • Review your portfolio for pending EU trademarks that are unlikely to proceed to grant before 31 December 2020, and consider whether UK protection is needed.
  • Ensure all formal requirements are met on new or pending registered community designs to increase the chances of them being registered before 31 December 2020, and for any which are filed close to this deadline and may not register in time, consider whether UK protection is required.
  • Include an EU trademark or registered community design as a basis of proceedings in the EU, rather than relying on UK rights alone.
  • Where an automatic UK clone is likely to be problematic, i.e. conflict with a previous agreement or prompt challenge from a third party, consider opting out of the clone. Ensure that your EU representatives can continue offering you the services that you require, and that the changes to representation will not increase costs.
  • Consider transferring responsibility to a single firm that can operate both in the UK and the EU to ease the administrative burden of managing these rights.

Deborah Maxwell is a patent and design attorney and Cameron Malone-Brown is a trademark attorney with Potter Clarkson LLP, a full-service European intellectual property law firm.

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Lord Grimstone, Minister for Investment discusses how the virus will affect trade and investment https://focus.cbbc.org/lord-grimstone/ https://focus.cbbc.org/lord-grimstone/#comments Thu, 23 Apr 2020 08:32:36 +0000 https://cbbcfocus.com/?p=3062 Lord Grimstone of Boscobel Kt is the Minister for investment jointly at the Department for International Trade, and at the department for Business, energy and industrial strategy. He spoke to CBBC members about his role, his ambitions to support British business in China and the future of trade in a post virus world.  In his role as double minister, Lord Grimstone’s role is, he says, simply to attract investment into…

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Lord Grimstone of Boscobel Kt is the Minister for investment jointly at the Department for International Trade, and at the department for Business, energy and industrial strategy. He spoke to CBBC members about his role, his ambitions to support British business in China and the future of trade in a post virus world.

 In his role as double minister, Lord Grimstone’s role is, he says, simply to attract investment into the UK. This may be in FDI investment, portfolio investment or as fund investment and then to keep in touch with those who have invested in the UK. Lord Grimstone, or Gerry as he is known, has experience of working at the highest level of finance as the former chairman of Barclays Bank and Standard Life Aberdeen. His government credentials have also seen him on the board of the Ministry of defence and the chair of the financial services body, TheCityUK, as well as sitting on the Treasury’s Financial Services Trade and Investment Board

Both a minister and Lord, he explains his role is a two-way job with supporting outbound and inbound investment and as the government spokesman on trade policy in the House of Lords, has a central role in trade policy going forward.

With over 300 visits to China under his belt over a 30 year period, and as the chairman of a large insurance joint Venture in Tianjin, Lord Grimstone is also very familiar with China and what it can offer British businesses.

“I am very positive towards China in terms of the mutual advantage this country gets from investment from China into the UK and the advantage UK firms get from investing in China and exporting to China,” he says.

“Everything in China gets associated with politics but we have to look through politics to help get successful business with China.”

China, explains Lord Grimstone, is an important partner with the UK.

“Whatever the causes, the world will look very different after this pandemic to how it looked before,” he says.

“For the first time ever, we will need to recapitalise the globe simultaneously. We have been used to country, company and sector recapitalisations, but not something that affects the whole world. It will lead to a change in investing as well as changing relationships. Those who had access to funds before won’t necessarily be the same afterwards,” warns Lord Grimstone.

 

Matthew Rous, CBBC, Chief Executive, went on to give a summary of how the virus has affected each of the major sectors

 

Automotive and Technology

The automotive and semi-conductors sectors have been heavily affected because much of these industries are based in Wuhan. The logistics sector has also been impacted as Wuhan is a central point on the East-West, North-South routes and there has been a decline in terms of supply chain and demand. There has been a dip in innovation as product cycles are delayed and tech funding has taken a hit, shrinking by 31 percent. The BAT companies (Baidu, Alibaba, Tencent) and others have been actively involved in rolling out tech responses, and CBBC thinks there is a chance to learn from China in thinking about opportunities, including 5G, which has expanded rapidly in China.

Consumer sector

Retail took an early hit but is now recovering and there is potential for significant growth in health and beauty retail. A McKinsey survey says 48 percent of respondents are confident that spending is picking up in China compared to 23 percent in UK.

Government at a local level in China has provided digital vouchers to fuel a pick-up in spending, and whilst some consumer behaviours will be impacted, consumers are likely to consume brands that support a healthy lifestyle, specifically in the food and drink and grocery market. Britain trades on high-quality hygiene standards, and with the growth of cross border e-commerce, it is likely Britain can benefit from this increased demand. Although China’s food market is highly regulated so companies need to be nimble and ready to respond to trends.

Creative industry (physical)

Creative industries that rely on a physical presence, such as music venues, theatres and museums, are especially hard hit, and it will be tough for the experience economy. Local governments need to work hard to stimulate the economy.

Creative industry (virtual)

The games industry is seeing a big increase in demand, although approvals are difficult to obtain and regulatory bodies are concerned about young people spending too much time on video games. Therefore proof is needed that games are educational or of a high-quality. British museums including the Tate, the British Museum and the V&A are all offering virtual experiences for their venues.

Education

The education sector has been exceptionally hard hit, with schools and universities concerned about entry in September. The UK receives £7 billion from international students. Language schools providing short term language courses are the hardest hit. Many academic institutions and schools are moving to teaching online.

Energy and infrastructure

China is a big consumer of UK energy products, as over 51 percent of energy exports went to China last year. This is mostly made up of equipment and services.

Healthcare life sciences

This sector has high potential for growth as demand for medical protection products, medical devices, drugs, detergents, tele-help and e-medicine all increase. Wedoctor – a Chinese platform – had 92 million online visits last month.

Financial services

The Financial services sector is adapting quickly to the situation, and the UK, along with the China Market Access Group (CMAG), will need to engage in a new way. This will involve less on pushing for regulatory changes and market access, and more on partnerships and working together to identify and develop new opportunities.

 

Lord Grimstone responded to a series of questions from CBBC’s Andrew Peaple:

 

Recently there have been changes in tone from the UK government over China, so what is the government approach to China now?

China excites strong emotions in people, both positive and negative. Hardly anybody is neutral towards China, just like China has opinions about countries in the West.

The pandemic has come as a huge shock to the world, as it has to China as well. Many countries will be asking how it occurred, could we have done more to stop it, and how we can do more to stop it from happening in the future. I am a believer in asking questions and the Chinese will also want answers. Our role is to help colleague, look through short-term factors, and look at the advantages to both China and the UK of having a good relationship going forward.

Hong Kong has also been a major topic. How problematic is it in terms of UK-China relations?

Hong Kong is part of China and it’s part of China through international treaty. It doesn’t mean people in the UK can’t have views of what happens in Hong Kong, but the fact that Hong Kong is part of China is the reason many of us invested in Hong Kong because we saw it as a gateway to China. I am of the opinion that constructive relationships between Hong Kong and China are important not just to those two but to all of us. I long for the day when matters are stable to benefit all.

The decision was made to allow Huawei to build 5G networks in the UK, but have there been more voices calling for a reversal of that decision?

Thought was given from all branches of the UK government and I think it was the right decision – a grown-up decision. For practical reasons but also for relationship reasons.

We have to look to our national interests, as does China. I think that is well understood.

Unless there is a profound change in technical or financial circumstances, then there’s no reason to change it and many UK telecoms companies were the ones supporting this.

There has been positive feedback because of the Huawei deal and if we had shut the door to Huawei there would have been a negative response. I know the ambassador and think he does an excellent job for his country and thinks he would have been disappointed on any rollback of Mr Xi’s visit. We should see this in the wider construct. China took positivity from that. Boris Johnson and Xi Jinping have a positive relationship, and I think a constructive relationship between China and the UK has a benefit to both sides.

If the pandemic causes a fall to asset prices in the UK, is there some concern that Chinese investors could buy up UK assets at discount prices? 

It is a general concern if market concern causes assets to be mis-priced – not just from China. The main action from the treasury is to get through the crisis as quickly as possible so asset prices can be priced normally again. Owners usually look through short term crises and look for long term value. None of us would want to see assets mis-priced but I am a fervent believer in two-way trade and two-way investment. There will always be areas and sectors that the government are more interested in but I am a supporter of free-trade. There will be short term fluctuations in the market but look through them to real values going forward.

Is China a priority in post-Brexit Britain?

Our first priority is to establish new Free Trade Agreements with those we have existing relationships with – US, Japan and so on. We have a lot on our plate in terms of Free Trade Agreements and in due course we want to see proper trade relationships with China.

Which sectors are you most optimistic about and how do you plan to promote commercial opportunities?

We always need to look for a competitive advantage. In the UK, tech, innovation and long-established manufacturing firms are one of our strengths. There is a clean growth agenda as well as opportunities in life sciences and in education. This is not to the exclusion of other sectors. It is easy to think of trade and investment of large multinationals but it’s the SMEs that form the backbone of trade and investment relationships. It is as important to get the SME trade and investment juices flowing as it is to help the multinationals. I will do this by being completely accessible to people. There is nothing better than face to face relationships.

A number of members also asked Lord Grimstone questions

 

There seem to be some reflections on the sustainability of certain supply chains? He Xiaowei – University of Northampton

Some companies will be looking to shorten and diversify supply chains. When everything is running smoothly we don’t look at how supply chains work, we just take for granted that they work. There will be repositioning of supply chains and part of my role will be to reposition them in the UK as that would be a great advantage to us. And there will be a question about national resilience. This has shown that we have to have levels of resilience and perhaps not enough attention has been paid to that in recent years. There will be enormous thinking and different ways of working and ways of getting supply chains. People will certainly become more interested in supply chains. 

Do you feel the focus on investment is London-centric at the moment? Do you think UK regions are being recognised and how might we be able to position ourselves better? Chris Vitali – West of England combined authority

I was taught as a banker that you might want to sell something, but someone has to want to buy it. It’s really pinning down the unique propositions in your locality. Manufacturing, heritage, academia – it can come from many sources. The only people that traded 20-30 years ago where large companies wanting to work with large businesses. Now it’s all kinds of companies, all sizes, all regions. This provides smaller companies with good opportunities.

Finding an anchor tenant is always good. And where you have large manufacturers in your area where supply chains reach into China. Drawing in those contacts to draw in others. Familiarity draws in investment. In other words, which companies already have investors and investment and how can we build on that?

To learn more about CBBC membership and to become a member, please contact the membership team by emailing membership@cbbc.org

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“Made in China 2025” leads to investment in Europe https://focus.cbbc.org/investment-in-europe/ Fri, 15 Feb 2019 01:35:39 +0000 https://cbbcfocus.com/?p=2974 As China asserts its authority on the world stage, European countries, including the UK, have found themselves to be one of the chief beneficiaries, writes Tom Pattinson As China comes increasingly close to taking the title of world’s largest economy it has been on something of a spending spree over much of the last decade. During the 2008 global recession, some struggling Western companies were up for sale at knock-down…

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As China asserts its authority on the world stage, European countries, including the UK, have found themselves to be one of the chief beneficiaries, writes Tom Pattinson

As China comes increasingly close to taking the title of world’s largest economy it has been on something of a spending spree over much of the last decade. During the 2008 global recession, some struggling Western companies were up for sale at knock-down prices and as China found itself cash-rich, it took advantage of the global economic situation.

Property in Sydney, vineyards in Bordeaux, advanced manufacturing companies in Germany – high-net-worth individuals, private companies and state-owned enterprises were picking up football clubs and fintech start-ups from every corner of the globe. Significant investment into resource-rich areas such as Africa has been going on for some time, and the 2013 Belt and Road Initiative has seen investment in to other Asian countries boom too. However, Europe has also been a major benefactor of Chinese investment, and in a time when many countries have seen GDP growth dwindle, it has been a well-received boost.

Europe has been a major benefactor of Chinese investment, and in a time when many countries have seen GDP growth dwindle, it has been a well-received boost

This has especially been seen in Eastern Europe. The Czech Republic has seen state-owned energy company CEFC China Energy snap up airlines, financial groups, media conglomerates, travel companies and even football teams. The Prime Minister of Hungary, Viktor Orban, laid it out in simple terms: “Central Europe has serious handicaps to overcome in terms of infrastructure. If the EU cannot provide financial support, we will turn to China,” he said.

Although investing abroad does no harm to China’s global soft power image, its main purpose is to add value as part of the Made in China 2025 strategy – to move away from low-end manufacturing and progress into the high-tech industries. The Economist newspaper wrote recently that the EU is like a ‘supermarket of opportunities to extract benefits that can help [China] rise.’

The US who, under President Trump, regard Made in China 2025 as a threat, has restricted Chinese investment in to America and some high-profile spats have ensued. Europe has received six times more investment (£9.3 billion) than North America (£1.55 billion), according to Baker McKenzie and Rhodium Group.

Whilst Eastern European countries are crying out for infrastructure investment, Germany and the UK have benefited from having an abundance of high-tech companies that appeal to Chinese investors. The following special report focuses on Chinese investment in the north of England under the Northern Powerhouse label, the campaign by former Chancellor George Osborne and his team that has combined with a drop in the value of the pound following 2016’s Brexit referendum to make the north of England the jewel in the crown for Chinese investment.

Brexit continues to have an impact on international investors. The ‘Brexit discount’ due to the drop in the pound has most likely attracted some investment, whilst the uncertainty has almost certainly put others off. However according to Rhys Whalley, Executive Director of the Manchester China Forum, the Chinese see investing in the UK as fundamentally positive in the long-term. However, he says: “The longer the uncertainty goes on [around Brexit] the higher the risks of losing major investments to other nations like Ireland and the Netherlands.”

China has, to some degree, reduced its overseas investment – mostly due to central government’s restrictions on outbound capital. And whilst this has led to something of a drop off in the volume of interest in Chinese investment in the UK, it is not necessarily a bad thing. “It weeds out less sophisticated investors and has honed in on those who are ready to invest, who already have their capital offshore, and who are more serious about their investment activities in UK,” says Whalley.

Read more in investment into the Northern Powerhouse

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Journalist and Sinologist Humphrey Hawksley https://focus.cbbc.org/journalist-and-sinologist-humphrey-hawksley/ Wed, 24 Oct 2018 12:52:59 +0000 http://cbbcfocus.com/?p=3550 Tom Pattinson speaks to author and broadcaster Humphrey Hawksley about his new book Asian Waters In the book, you argue that China uses a carrot and stick approach to the South China Sea, which ultimately leads countries or groups to end up supporting China’s actions in the region. Does this mean opposition to China’s militarisation of the South China Sea will only diminish and the region will inevitably fall fully under…

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Tom Pattinson speaks to author and broadcaster Humphrey Hawksley about his new book Asian Waters

In the book, you argue that China uses a carrot and stick approach to the South China Sea, which ultimately leads countries or groups to end up supporting China’s actions in the region. Does this mean opposition to China’s militarisation of the South China Sea will only diminish and the region will inevitably fall fully under PRC control?

This is the risk unless Asian governments form a more unified front to balance China’s expansion. At present, they are putting too much emphasis on protection from the US, which is not geographically within the Asia-Pacific and directly pits two superpowers against each other as in the Cold War. They need to wean themselves towards a mindset of regional self-reliance so that Beijing understands that Asia will not be pushed around. There are signs of this beginning. President Baron Waqa of the tiny Pacific island of Nauru set an example in September when he reprimanded China for high-handed behaviour. Prime Minister Mahatir Mohamed of Malaysia has made it a priority to unwind many of China’s debt-laden projects there, and the Maldives has voted against an authoritarian pro-China leader.

Asian Waters

The UK has recently carried out freedom of navigation exercises in the region. Could this have a knock-on effect when negotiating new trade deals between the UK and China?

Definitely and there is little evidence that Britain has thought this through post-Brexit. It is best summed up by an editorial in the pro-Beijing China Daily: “China and the UK had agreed to actively explore the possibility of discussing a free trade agreement after Brexit. Any act that harms China’s core interests will only put a spanner in the works.” This bluntly states that any challenge to China in the South China Sea, or over its Hong Kong policy, or about anything else, will have to factor in the negative impact on Sino-British trade.

The West has blindly moved from condemning China as a global pariah to viewing at as a bottomless treasure chest

What do you think is China’s long-term plan in the region?

Security of trade routes and its own supply chains and return to its global stature which declined rapidly in the 19thCentury. Central to China’s motivation is that its ‘Century of Humiliation’ must never be allowed to happen again. This began with the British colonial Opium War in 1849 and ended with the Communist Party winning power in 1949. Having said that, there is also an element of rising power syndrome that can be seen as neo-colonialist and will, therefore, be challenged on the ground.

Today’s increasingly polarised and inward-looking political and economic environment means China is seemingly coming out as the champion of globalisation. Are we witnessing the end of liberal democracy?

I don’t think so because ultimately China’s style of authoritarianism does not work in a developed society. But we are witnessing a wake-up call for liberal democracy. Since the Cold War it has become riddled with hubris and vested interests. Even after the catastrophes of Iraq, Libya, Egypt and Ukraine, our political leaders appear oblivious about the delicate stages needed to transition from dictatorship to democracy without violence. Unless liberal democracy gets smart, its effectiveness will continue to decline.

What can we in the West learn from China?

First up it can learn that there is much to learn from China. Gone are the days when the West dictated political doctrines to the developing world. The clearest example would be China’s poverty alleviation, infrastructure building and long-term planning. The West has blindly moved from condemning China as a global pariah to viewing at as a bottomless treasure chest for investment, without asking how it has achieved so much so quickly.

Humphrey Hawksley is the author of Asian Waters: The Struggle Over the South China Sea & the Strategy of Chinese Expansion.

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The habits of Chinese travellers is changing fast and Britain is benefiting https://focus.cbbc.org/brand-britain-attracts-chinese-tourists/ Fri, 22 Jun 2018 08:17:21 +0000 https://cbbcfocus.com/?p=3136 Eve Baker of travel agency Beiwei55 discusses changing Chinese travel habits in a post-Brexit world and the importance of brand Britain Have you seen a rise in the number of Chinese tourists coming to the UK? Since we started in 2014 there has been a notable rise, particularly last year after the Brexit vote when the pound plummeted. Things have calmed down a bit since but the market is still…

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Eve Baker of travel agency Beiwei55 discusses changing Chinese travel habits in a post-Brexit world and the importance of brand Britain

Have you seen a rise in the number of Chinese tourists coming to the UK?

Since we started in 2014 there has been a notable rise, particularly last year after the Brexit vote when the pound plummeted. Things have calmed down a bit since but the market is still growing significantly, particularly when you consider that less than seven percent of Chinese people actually own a passport.

What do they look for in the UK that is different from other tourists from other countries?

I think there is a fascination with our history and heritage and how well it has been preserved. Also, counter to the stereotypes, Chinese visitors love to try local food and dishes while they’re here. We’ve just launched a food tour which takes in some great food spots around London including Borough Market.

Do many Chinese tourists look for higher-end activities?

It’s always dangerous to generalise about such a huge market, but there is certainly interest among high-end Chinese tourists for these types of activity and the market as a whole is moving towards a more experiential form of travel where the focus is on having local, in-depth experiences rather than whistle-stop tours around the UK.

Eve Baker

Eve Baker

Are Chinese visitors looking for activities they are passive towards (for example watching sports) or active towards (for example driving trips or food and drink tasting)?

Good question, I have never looked at it like this. I think there is always going to be interest in both as long as the activity provides a truly authentic experience. Passive activities such as going to the theatre or watching Wimbledon are perhaps more accessible and so I can see why a more ‘active activity’, which is harder to come by, such as gin tasting or a driving experience may appeal to Chinese visitors who are looking to do something unique that their friends may not have experienced already.

What do you offer that is most appealing for Chinese visitors?

Our unique selling point of native British Mandarin-speaking guides often first attracts a Chinese visitor to our products – they find it to be a great way to get closer to Britain without the language barriers. Our half-day city walking tours target the new generation of Chinese tourists who are semi- or fully-independent and wish to travel around the UK at a slower pace, spending time in each destination to get to know its history and culture, rather than passing through on a big bus with a quick stop to get the compulsory photograph. We run our walking tours across London and in other popular destinations such as Oxford, Cambridge, Edinburgh, York and Durham. Most of the walks include a sit down in a traditional pub for a pint, or a cup of tea in an independent tea house.

How does the UK differ from other countries and what do you think is its unique selling point?

We are so lucky in the UK because we have a natural brand to work with. The Union Jack is recognisable all over the world; you’ll even see it branding umbrellas and kids’ clothing in China. The Royal Family is iconic and intriguing, luring visitors from across the globe. We are historically rich as a nation, taking pride in our heritage and historical landmarks, and yet we are also forward-thinking and creative. To visit the UK is a prestigious thing, and for many Chinese, it is not a case of if but a case of when.

How does the UK accommodate Chinese visitors and what does it do to attract them?

Visit Britain’s Great China Welcome campaign really helped make UK travel and hospitality companies recognise the importance of this growing market and how to meet their need with things like the provision of Chinese language content, food options or Mandarin-speaking staff who are culturally aware. Tourist boards and travel companies here have also pooled together to arrange familiarisation trips for Chinese Key Opinion Leaders, which can have a massive impact on Chinese visitors who may be considering or researching the UK as a destination to visit. But we can do a lot more. We still fall behind countries like France in terms of Chinese visitor numbers. Part of the barrier is the visa process which is not as straight forward or affordable as it could be for Chinese visitors, particularly if we compare it to somewhere like the USA who offer a 10-year multi-entry visa.

How do you market to the Chinese sector and how does this differ from other marketing?

We spend a lot of time establishing relationships with key Chinese travel agents, both online and offline in China, who sell to our target customer. We communicate in Chinese almost daily with most of these agents, mostly via WeChat and QQ, and we make annual trips to China to build on these relationships. We go for quality over quantity, ensuring we work with agents whose brand vision and travel services are in line with our own.

Eve Baker is the managing director of travel company Beiwei55.co.uk

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