International perspective: May 2021

The view from China

Geopolitical tensions impacting the business environment

The American Chamber of Commerce (AMCHAM) launched its annual business white paper this week and unsurprisingly geopolitical tensions and bilateral business environment concerns dominated discussions. Furthermore, 38% of US businesses in Hong Kong indicated that they would be leaving the island by the end of 2021 due to ongoing political and business tensions.

Nevertheless, US finance behemoth BlackRock bucked this trend announcing that it would be expanding its wealth business into China, with a 50.1% stake in a joint venture with Singaporean sovereign wealth fund Temasek and China Construction Bank.

The British Chamber of Commerce in China will be launching its annual business environment position paper later in May so it will be interesting to gauge British business confidence and overall sentiment in China. Certainly, the change to China’s animal testing regulations, which came into effect on 01 May, was a welcome advance for both animal welfare and the opening up of a potential £4bn market over the next decade for British retail brands.

What the CBI is doing

The CBI is a supporting organisation of the Greater Bay Area (GBA) Summit scheduled for mid-June, and later this month will be part of a 30-strong British business delegation to the Central China Expo in Taiyuan, Shanxi province. Given the parlous state of bilateral relations at present it is very encouraging that we will be accompanied by senior officials from DIT and the FCDO based across the China consular network.

The CBI is also supporting the Taiwan Climate Partnership, a grouping of Taiwan’s top microchip companies (TSMC, Delta, Asus, AUO, Pegatron, Acer, Lite-On and Microsoft Taiwan). The TCP will be making public commitments to the Race to Zero pledge and RE100, EV100 and TCFD initiatives in early June.

The CBI China team will also be hosting a SW China Consular briefing for members in Beijing this May. This will be an excellent opportunity to gain insights and the latest business intelligence from Chongqing municipality, Sichuan, Yunnan and Guizhou provinces.

The view from India

The India-UK Enhanced Trade Partnership

At a virtual summit this month, Boris Johnson and Narendra Modi, the Prime Minister of India, agreed a 2030 Roadmap which will provide a framework for UK-India relations.

The CBI welcomes the Enhanced Trade Partnership (ETP) between the UK and India. It will unlock new opportunities for British businesses exporting to India, and Indian businesses investing in the UK. Specifically, it sets the ambition to double the value of UK-India trade by 2030 and declares the shared intent to begin negotiations on a comprehensive Free Trade Agreement (FTA) by the end of this year.

The UK and India also signed a landmark Migration and Mobility Partnership agreement, aimed at supporting people to live and work in both countries while addressing long-standing problems of illegal migration from India to the UK. Further, both sides agreed a more immediate package of market access wins to the benefit of both the UK and India.

The EU resumes FTA talks after eight years

The EU and India summit was held virtually on 8 May, announcing the start of talks for a Free Trade Agreement, an investment agreement, and the establishment of new working groups for regulatory cooperation.

Initially launched in June 2007, the FTA talks between India and the EU hit a roadblock in May 2013 when the two sides failed to bridge substantial gaps on crucial issues, including tariff, data security status for the IT sector and market access.

How India is responding to the second wave of the coronavirus outbreak

India saw massive surge of coronavirus cases in April and May, recording more than 300,000 new cases for many days in a row. One in three cases in the world is now reported from India, and the death toll is inching upwards every day.

This unexpected second wave has made necessitated India’s population and healthcare system to treat it as a war-like situation, especially with the identification of the new variant which is more transmissible.

Rather than a national lockdown, India has executed state-specific lockdowns due to economic affordability concerns and to prevent large migrations. Most states announced lockdowns in early April and are likely to extend them to the end of May as the government continues to monitor on a weekly basis.

The ongoing vaccination programme in India opened for the adult population from 1 May, and India is receiving international cooperation from all over the world.

The CBI would like to thank all members who came forward and extended aid in this time of crisis – including efforts to connect businesses and both governments in the UK and India to procure medicines, life-saving equipment, essential guidance, a tele-support helpline, and funding support through British Asian Trust.

The view from the USA

What the CBI is doing

The CBI hosted Antony Phillipson, HM Trade Commissioner for North America, on 13 May for an update on the US-UK relationship and a discussion with Washington-based members.

In addition, in partnership with CBI London, the Washington team has consulted with members about the UK’s accession to the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP).

After submitting evidence to the House of Lords’ International Agreements Committee in April, the CBI is preparing a guide for members about the details of CPTPP, the opportunities for British business in the Pacific Rim, and the areas where the deal can be further reinforced by British participation. The report will be released on My CBI in the week commencing 24 May.

Looking ahead, Dame Karen Pierce, the UK Ambassador to the US, will address the CBI Women in Leadership Network on 23 June.