Why the Chinese market is becoming increasingly attractive to the British business community
Published: May 29, 2024 08:39 PM
China UK Photo: VCG

China UK Photo: VCG

At the fourth China International Consumer Products Expo in Hainan in April 2024, the national pavilion of the UK made its debut, and a "UK Brand Day" event was staged to showcase the best brands of the British drinks, fashion, health and beauty sectors to a wide audience of duty-free retailers, distributors and local consumers. British business groups and enterprises also showed up at the 135th Canton Fair in May this year, including the 48 Group Club and Tesco.

The past year has witnessed a gradual increase of trade and investment by British enterprises with China. As the guest country of honor at the China International Fair for Trade in Service (CIFTIS) in September 2023, the UK hosted over 70 events including expert lectures, product demos and business receptions. At the fair, in the UK Pavilion, a miniature Tower Bridge stood tall at the center, symbolizing a cooperative bridge for smooth trade between the UK and China. As a reflection of this spirit, since the beginning of 2024, a series of top British enterprises, including HSBC, Standard Chartered, Rio Tinto, Prudential, AstraZeneca, GlaxoSmithKline and PwC, have all sent their senior executives to visit China to push forward their business in the Chinese market. 

Looking back in history, the business community has been not only the most active and practical force in the UK, but also one of the earliest groups to explore interactions with China. Over 70 years ago, a group of British business people paid a visit to China despite the West-imposed trade embargo, opening the door to bilateral trade and thus earning the name "icebreakers." For the past 70 years, generations of "icebreakers" have witnessed and actively participated in China's development and reform, achieving their own growth and prosperity through mutually beneficial cooperation.

Trade between China and the UK has stood at around $100 billion for several years running. The UK invested more than any other European country in China, reaching $5.4 billion in 2023, an increase of 71.6 percent. The country is also the second-largest destination for Chinese investment in Europe, with $2.6 billion invested in 2023. These impressive numbers have led to the creation of numerous jobs, boosting economic growth and facilitating the exchange of goods and services between the two countries, benefiting both their economies and people.

The Chinese market is becoming more and more attractive to the British business community. When attending the CIFTIS 2023, Lord Dominic Johnson, UK Minister of State in the Department for Business and Trade, said that China is the world's second-largest and fastest growing major economy, and the UK hopes to seize opportunities in the Chinese market and further boost its service trade. A confidence report released by the British Chamber of Commerce in China shows that 46 percent of the British companies surveyed have a positive outlook on China's business prospects in 2024, higher than last year's 31 percent. The China-Britain Business Council (CBBC) expects that British companies will increase their investment in China in 2024, and China will remain an essential part and source of income for many British companies in their global layout.

One reason behind the confidence in the Chinese market is the government's recent adoption of policies to advance high-level opening-up. According to one senior executive of Standard Chartered, China's accelerated pace of opening-up is exciting. In January 2023, Standard Chartered Securities (China) Co., Ltd. was approved to be set up, and made the first wholly foreign owned securities company receiving approval after the Chinese mainland's removal of restrictions on foreign shareholdings in securities brokerages in 2020. During his visit to China, the Lord Mayor of the City of London also noted the broad prospects for financial cooperation between the UK and China, and expressed hope that the city would actively participate in China's high-level opening-up.

The second reason for such confidence is that China is actively developing new quality productive forces. The country is driving industrial innovation through technological innovation, which will give birth to new industries, new models and new driving forces. AstraZeneca, the UK-based pharmaceutical company, has invested nearly $3 billion in China, introducing nearly 30 innovative drugs. The drug company plans to increase investment in Qingdao, a northern coastal city of China and build a world-class biopharmaceutical supply chain in Shandong Province, where the city is located, as well as establishing the Rare Disease International Innovation Research Center. The global CEO of AstraZeneca says that China boasts good business environment and is a very good choice for foreign investment, and the company will continue to expand its presence in China.

The third reason, perhaps the most significant and important, is China's vast and prosperous consumer market. China now has a 400-million-strong middle-income group, which could reach 800 million by 2035 and generate huge opportunities for businesses around the world. British companies have expressed confidence in the Chinese market and the willingness to increase their investment in China. Standard Chartered regards China as the most strategically important market, while Rio Tinto Group states that it will stick to its long-term development strategy in China.

When meeting with the visiting CBBC delegation on May 15, Chinese Premier Li Qiang stressed China's commitment to the basic state policy of opening-up and its willingness to expand economic and trade exchanges with the UK. Openness and cooperation is the right choice either in terms of history or reality. Cooperation between China and the UK is blessed with a huge practical demand, and a mutually-beneficial nature. The Chinese government and its market remain open to the UK, and it is hoped that the UK government will respond to the call of the business communities and work with China for even more fruitful cooperation.

The author is a researcher on global affairs. opinion@globaltimes.com.cn