When the PM visited China
The business delegation accompanying the Prime Minister was looking to deepen ties with the world's second largest economy
Prime Minister May’s first State Visit to China kicked off on 30 January in the provincial capital of Wuhan, followed by visits to Beijing and Shanghai over the following two days. The PM was joined by a delegation of more than fifty businesses, ranging from small firms to the largest FTSE 100 multinationals the UK has to offer.
China is the world’s second largest economy by GDP and home to the world’s fastest expanding middle class. According to a recent study by McKinsey & Company, 76 percent of China’s urban population will be considered ‘middle class’ by 2022 by income, compared to just 4 per cent in 2000.
UK firms are lining up to sell goods to China and the PM’s visit helped give many of them the jump start needed. According to figures released by the Foreign & Commonwealth Office, British companies signed deals worth more than £9.3bn over the course of the three days, creating more than 2,500 jobs across the UK. Specifically, more than £1bn pounds of deals and market access, and 890 jobs, were secured for Britain's financial services industry.
One way British companies hope to reach Chinese consumers is through China’s robust e-commerce ecosystem. According to a study by PwC, in Q1 of 2017 China’s online retail sales reached over 1.4 trillion yuan (£159.8bn) in the first quarter alone. This was a 32 per cent increase over one year prior, a notable contrast to physical store sales which increased only 7 per cent.
JD.com, China’s largest retailer, announced plans over the visit to sell £2bn of UK goods to Chinese consumers in the next 2-3 years. The number of UK brands on JD.com has doubled over the last two years, with sales in 2017 growing 100 per cent year-on-year. World famous brands Dyson, Clark’s, Johnnie Walker and Lipton are among the brands that have been popular with JD consumers. JD will kick off with a 24-hour “Celebrate Britain” sales promotion for UK products this April to introduce the “Best of Britain” to Chinese customers.
Outside of e-commerce, UK businesses took great strides, notably in education where the UK is a clear leader. Wycombe Abbey International and BE Education held a ground-breaking ceremony in Hangzhou, China to mark the start of construction of a new Wycombe Abbey International school in the city. Expected to open in September 2020, Wycombe Abbey International School Hangzhou will be Wycombe Abbey’s second co-educational international school in China taking pupils from kindergarten to 18 years of age. Wycombe Abbey International School, Changzhou opened in September 2016 and already has over 840 pupils.
In healthcare and medicine UK business witnessed some major successes. AstraZeneca signed deals with two of China’s largest internet companies, Alibaba and Tencent. Tencent, the company behind messaging app WeChat, will look to drive so-called "smart health services" and counter the sale of counterfeit drugs. Medopad, signed more than £100m of commercial projects and partnerships with organisations including China Resources, GSK China, Peking University and Lenovo.
During the visit, the CBI served as Secretariat for the inaugural meeting of the UK-China CEO Council, a bilateral body which will serve as a forum for discussion and policy recommendation from business leaders of the two countries. As CBI Director-General Carolyn Fairbairn said, this is a “real opportunity to deepen our partnership”.
And overall, the PM’s visit to China is a vital signal which should help companies secure business in a country where politics and business go hand in hand.
Celebrate the strength of UK-China business relationships and create new opportunities for the year ahead at the CBI's Chinese New Year Dinner on 22 February