Opportunities and Challenges for UK Businesses in China

According to the recent reports and the policies laid out by the China government, China tends to pay more attention to the FDI (foreign direct investment) in 2017. Despite the weak global economic environment, China continues to register solid GDP growth averaging 10 per cent per annum. Much of the recent impressive growth of China's economy can be attributed to a rapid acceleration in the rate of urbanization. This process is set to continue. Presently, around 600 million Chinese live in cities, and this is predicted to increase to one billion by 2030 (McKinsey Global Institute, 2008). 

Admittedly in the past China had a comparative advantage especially the low costs products in the manufacture. However with the rapid growth of services, the local china firms face the pressure which drives them to develop higher value-added products. Thus arises the opportunity which stimulates the UK business to capitalize on delivering high value-added products, services and technologies which are regarded as competitive advantage for UK business. 

WHY CHOOSE CHINA?

In order to understand why UK companies establish operations in China's regional cities, primary data were collected on market- entry motivations, by interviewing and surveying leading UK and international firms. The results presented in Exhibit 1 show that market-related factors are the principal drivers, together with cost, government and institutional support, and the quality of human capital. 

resource: CBBC

data: 60 UK and international companies and trade promotion organizations (TPOs) many of whom have operations in at least one of China's regional cities

From the graph above, we can obviously see "access new market" is the most attractive factor that attracts UK business to entry into China market. To some extent , the graph is consistent with the recent regulations that aimed at boosting the foreign investment.

WHAT ARE THE CHALLENGES?

data: corporate members of the British Chamber of Commerce in China and CBBC were invited to provide information about their experiences of the China market by completing an online survey. Responses were received from more than 80 companies .

From the graph above "the restrictive regulations and sector" factor dominates in all of the challenges. Fortunately, this year in 2017 China government does release some policies to ease the foreign-invested firms in China especially in SHANGHAI .Besides some recruitment agencies like Talent Spot can be a shortcut  to assist your business so that you can avoid some complicated process when you start up your business.

Conclusion

The "China Challenge" is now greater for UK companies, particularly SMEs. In general, some of the business opportunities are already being explored in the main coastal cities and one could face greater local and international competition. The economic boom will drive the growth of the less-known cities inland. Larger city regions surrounding the main economic centres will also emerge. Part of the materials come from CBBC. What is more here come the upcoming business conference in UK on Mar. 28th,click Attending the 5th upcoming CBBC China business conference to know more about doing business in China.