A recent poll of businesses conducted by Grant Thornton found that export sales in the East of England increased 4.5% last year. Reaching new overseas markets is an important factor for companies in the region with:
• More than a third of mid-sized businesses (MSBs) in Essex expect to increase export levels over the next 12 months
• 45% of MSB’s polled considering breaking into new overseas markets in the next 12 months
• Around 10% of businesses in Essex see China as a potential export market
“It’s encouraging to see such a large proportion of our county’s MSBs with a firm eye on international business and confident about future exporting.”
James Brown, Grant Thornton practice leader
China, still a huge market opportunity
Whilst the latest official figures show that China’s Gross Domestic Product (GDP) grew at its slowest pace for six years in the first quarter of 2015 China’s GDP still remains one of the highest in the world. As a consequence, the country has a spending power to be reckoned with.
“China was a USD 1 trillion economy. It now stands at USD 10 trillion. Even with a slower growth rate of 7% it will effectively create another India, in terms of GDP, every 2 years.”
Jim O’Neill, Economist
China’s consumer market is expected to remain strong according to a report launched by law firm Pinsent Masons and the Centre for Economic and Business Research (Cebr) which predicts the value of China’s imports will exceed the value of its exports by 2022. Items that are deemed quintessentially British are of particular interest to the Chinese market and exporting to China is currently seen as a high growth area. This consumption-led economy is driven by a growing middle class spending on domestic goods and services.
“The UK needs to tap into their needs and deliver products and services to Chinese consumers in the way they want them. Target their ‘bulging wallets’ appropriately.”
Gordon Orr, McKinsey Asia
How Essex International can help businesses export to China
Essex International (EI) works with both UK and Chinese companies to make the most of the opportunities that exist in both markets. Through their UK and Chinese offices EI help companies and organisations to reach new markets in each territory through targeted research and ‘in market’ introductions all facilitated through a government relationship that provides unique access and opportunity.
A recent success includes specialist healthcare company VitalCare, who, with the assistance of Essex International, have further extended their trade links with China by committing to opening a 3200sqm state of the art factory in Jiangsu in May 2015.
“The Gaochun officials were clearly impressed that a number of the Essex International representatives spoke Mandarin, not only the native Nanjing representative based at County Hall, Mr Fan, but also Peter Manning and Paul White of the International Trade Department”
Lewis Calcutt, MD of VitalCare
Overcoming international trade barriers
42% of Essex firms cite overseas legislation and regulation as key challenges when expanding globally. Recommendations regarding visas, legal advice, accounts and recruitment are particularly sought after.
A further 23% of businesses state cultural and language difficulties as an issue. Via their office in Nanjing, Essex International use their local resources to help businesses obtain regional market knowledge and set up well-targeted face-to-face meetings which is considered a part of building business relationships in China.
Advantages of Jiangsu Province
Essex International helps companies and organisations to access the Chinese market by providing unique access to the market through an exclusive 26-year relationship with Jiangsu province in China.
In a recent report by the National Bureau of Statistics Jiangsu Province came third in the list of having the highest disposable income in the first quarter of 2015. The province was ranked only below Shanghai and Beijing making it a highly attractive location for businesses interested in exporting to China.
The Chinese owned House of Fraser (HoF) group has also shown its belief in the province’s consumer spending power by announcing it plans to open the first two HoF stores in China in Jiangsu Province in 2016.
Source [Shanghai Daily] [Grant Thornton] [City A.M] [China Business Conference]
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