What businesses need to do for potential Chinese trade after Brexit

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As we enter 2019, for many, it is with bated breath. After what feels like a lifetime of media coverage, Brexit is finally upon us, as the nation is set to leave the European Union on 29th March 2019. But with less than one third of UK businesses having any sort of contingency plan in place in the event of a no-deal Brexit, are we still woefully unprepared?

A no-deal Brexit seems to lack any silver lining. Though previously noted that it would at least set the UK free to forge trade deals with the wider world, recent comments show that it might not be that simple. Recently, a key hoped-for trade deal with China was cast in a cloud of concern as Chinese officials warned that a no-deal or hard Brexit would prove problematic for any future UK-China trade deal.

It’s no secret that the UK is hoping for a trade deal with China after it leaves the EU. But between this stark warning, and the fact that China imported a lot less from the UK in 2016 than the UK imported from China, is China as interested in a trade deal as the UK is? Put simply, is a trade deal as important to China as it is to us?

Undoubtedly China seeks to widen its trading routes. The Belt and Road Initiative is proof enough of that — this planned action would see Asia becoming much more connected through a “belt” of land connections and a “road” of sea routes to the rest of the world. At its core, it is a new Silk Road for China, and there are currently 71 countries involved with the project, including New Zealand and Russia.

Whether or not the UK signs up is another matter. According to Business Insider UK, there isn’t a solid sense of support from the UK government for China’s ambitious project. While Chancellor Phillip Hammond has noted his support, Prime Minister Theresa May has been rather more reserved. Naturally, this could change in the wake of a UK-China trade deal in the future.     

We’ve already seen the beginnings of progress when it comes to UK-China trade relations too. At the beginning of 2018, the Prime Minister secured the lifting of a Chinese ban on the import of British beef. The ban had been in place for 20 years up until then, having been put in place in response to the EU’s ban on UK beef export in 1996 after an outbreak of “mad cow disease”. Though the ban was lifted in the EU in 2006, some countries outside the EU who had opted to ban imports of the product kept their bans in place, China included. The lifting of this ban in 2018 is alleged to be worth £9bn.

Is there anything else that China would be interested in from UK businesses though? According to reports from the Telegraph, the top British exports for Chinese customers include cars, designer labels such as Burberry, Scottish salmon, and Scotch whisky. And it’s not only big-name companies that can flourish in China; in fact, smaller businesses could certainly find their footing and become a breakout success overseas. A good example of this is haircare brand Tangle Teezer. International Managing Director Gemma Clarke commented that China has quickly become their second biggest sales market in just three years.  

The success came as a result of social media exposure by a popular Chinese model, who had purchased the product then shared it to her huge number of followers. Just like in the UK, China adores online shopping, and the impact of influencers on shopper behaviour is key to business success.

UK businesses would do well to explore the ins and outs of the Chinese market ahead of Brexit, regardless of the deal or outcome. With the correct product and savvy approach, the market could prove to be highly rewarding. Plus, being prepared for the inevitable EU market change-up after Brexit is finalised is a necessity at this stage.

It’s important for businesses seeking for trade in China to build the right foundation of connection and interest. An example of this is put forward by the director of Digital Node, Rebecca De Cicco — within the construction industry, for instance, 70% of buildings taller than 200 meters in 2017 were built in China. Clearly, the country has an interest in such large-scale buildings and therefore, the technology that goes with it, such as building information management software and crowd simulation.

These technologies were sought after in China during the construction of Beijing’s new airport, the Beijing Daxing International. Crowd simulation technology was crucial, given that the airport is forecast to see 45 million passengers pass through every year. The software was provided by British company and structure design software providers Oasys.    

For those who are eyeing up markets overseas after the nation’s EU departure, the Business Magazine offers some advice for setting sights on the Chinese market. As with any country, it is highly recommended that any business seeking trade abroad should take the time to consider the culture of the country in question. Basically, what works in the UK may not fly in China. Relationships may seem slower to build up, and businesses don’t want to risk slowing that pace further with a miscommunication or ill-considered comment.

The level of impact of Brexit upon our businesses remains to be fully realised, but trade with the wider world seems to be the new path for many. With 47% of British businesses in China stating a trade deal with China could boost business after Brexit, perhaps the future is not all doom and gloom!



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