Will China provide increased business opportunities in the post-Brexit era?
The UK has the potential to play a major part in shaping the future of Chinese outbound investment activities, say tax and advisory firm Blick Rothenberg.
Winnie Jinyue Cao, a director at the firm, said: “The UK should urgently strengthen its economic ,business and cultural ties with China. China, the world’s second largest economy and forecasted to be the largest by 2028 is already a key trading partner with the UK with exports to China of over £30 billion, and imports to the UK of £49 billion in 2019 but more needs to be done if Britain is to maintain its position and grow it going forward.
“China has made a relatively speedy recovery from the pandemic and continues to encourage companies to expanding overseas. However, a mixture of factors including Brexit have slowed down China’s pace in outbound Foreign Direct Investments in Europe. In particular, the UK fell to the fifth among European countries in receiving Chinese investment after Germany, France, Poland and Sweden during 2020. However, on the positive note, Chinese companies continue to set up and grow organically in the UK. There is combined £91 billion turnover across the top 800 Chinese owned companies.”
Winnie continued: “Given the rising US-China frictions, the UK has an increasingly important role to play in helping Chinese establish their brands globally. This works in both ways – while the likes of Xiaomi and TikTok are expanding their global presence, China’s rising middle class consumer base are also seeking high quality UK made products.
“Chinese businesses as well as capital seek to collaborate with technology, healthcare and creative industries that the UK takes a leading position in.”
Winnie concluded: “The UK is forging its post-Brexit path as a ‘confident, independent nation’ – and an energetic force for good’. Chinese companies are at early stage of internationalisation, and there is still a lot of ‘cultural shocks’ and differences that need to be bridged and the UK could help with this.
“We should create opportunities for both countries by recognising the growing trends, understanding and offering guidance as to how these relationships will work and flourish. Our high streets started taking UnionPay cards as a small step – a Chinese credit card equivalent to Visa and Mastercard which was introduced in the UK to allow Chinese tourists shop with ease. Now it is time for more UK businesses to recognise the opportunities and benefit.”