Suffolk, Essex and Norfolk firms encouraged to look to China to help reduce trade deficit
PUBLISHED: 17:47 08 April 2019 | UPDATED: 17:47 08 April 2019
Brexit uncertainty is focusing minds on increasing the east of England’s already burgeoning trade with China, which has been showing promising signs in recent months and years.
Latest figures from the Department of International Trade (DIT) for the east of England show the region’s export trade with the world’s second largest economy rose by £75m from £1.249bn in 2017 to £1.324bn in 2018.
Balancing what has historically been one-way traffic, with cargo ships arriving at the Port of Felixstowe laden with goods only to return virtually empty, has been a major focus for UK officials and businesses, with the need to build strong export markets growing stronger as the UK prepares to exit the European Union.
Thinley Topden, responsible for the east of England at the DIT, pointed out that China was one of the world’s strongest economies – accounting for a third of all global economic growth in 2018, with imports valued at £126bn.
“Thanks to a rapidly evolving consumer market and a growing population of 1.3bn, opportunities for British exporters continue to grow as appetite for our products and services builds year-on-year,” he said. “The benefits of exporting are well understood. It can help businesses grow revenue and profitability and make them more resilient in today’s competitive business environment.”
However, finding the right target market will often depend on the industry, and it’s important understand the nuances of the markets, he said.
“In China, there is a lot of emphasis placed on inter-personal relationships in business, known as guanxi, and face-to-face meetings go a long way to achieving the rapport required to secure new business partners,” he said.
Forming good transport links can help. With Stansted Airport lobbying hard to establish direct routes with China, market access for east of England exporters look set to improve, he said.
Stansted chief executive Ken O’Toole said the airport’s ambition was to be the “Chinese gateway to the east of England”, helping to attract more investors and tourists to the region.
Four decades of urbanisation have seen more than 640m people – nearly half (46%) of China’s entire population – migrate from the countryside to its cities, resulting in a growing need for regions with strong agricultural sectors, like the east of England, to help China modernise and increase rural productivity.
Thanks to organisations and facilities such as Agri-Tech East and the Eastern Agri-Tech Innovation Hub, a research centre in Soham, there is a world-leading network of innovative farmers, producers, processors and technologists emerging across the region that are well-placed to capitalise on overseas opportunities and meet demand in markets such as China, he said.
Steve Elsom, regional director for the east of England at Lloyds Bank Commercial Banking, points out that the largest markets for the east of England’s manufacturers include the US, which imports £3.8bn worth of its goods a year, and China, which imports £1.3bn.
“Manufacturing is the third largest sector in the east of England and is one of the most diverse in the country. Many leading and global companies in sectors such as pharmaceuticals, food, machinery and electronics call the region home,” he said.
“It is this diversity that contributes to the region’s overseas success. British manufacturing has a global reputation for high quality and international demand for British-stamped goods shows no sign of slowing.”
The future succcess of the region will rest on businesses of all sizes and sectors looking to overseas markets for growth, he said.
“The benefits of exporting are vast. It offers the opportunity to showcase British manufacturing and provenance to international customers, allows firms to diversify their markets and can result in a more profitable and resilient business model.”