China. The UK Government keeps telling business that they should be looking to China to expand their markets. This at the same time that much of the media keep going on about what they see as the risks.
Anyway, this jaundiced view of things tends to make smaller UK businesses a bit nervous of taking those first tentative steps. It’s a convenient excuse to do nothing and to not engage.
Interestingly, all is not as it seems. The facts show a brighter horizon and the trend is upwards:
- UK exports to China in 2011 were £13.78 billion (including goods, services and other income e.g. remittances), up 17.6% on 2010. (Source: Office for National Statistics UK)
- UK exported goods to China in 2011 were £8.77 billion. This is up by 21.4% from the previous year. (Source: HMRC)
- UK exports of service in 2011 were £3.2 billion, up by 19.5% from the previous year. China is the 14th market for UK service exports, 4 places up from the previous year. UK exports of goods and services in 2011 were £12.5 billion, up by 21.3% from the previous year. (Source: Office for National Statistics UK)
- From January to May 2012 the UK exported £3.98 billion worth of goods to China. This is up by 21% from the same period in 2011. Since January 2012, China has risen from 9th place to 7th place in the UK’s most important export markets by value (overtaking Italy and Spain). Imports, on the other hand, were up 5% at £11.70 billion, which was one down from 5th to 4th place. This, however, suggests a re-balancing of trade relationship may be beginning to take place. (Source: HMRC)
- The value of UK goods exports to China from January to May of 2012 ranked 3rd among EU countries, after Germany and France. This is one place up from the same period last year (as we have overtaken Italy). (Source: MOFCOM)
- At the end of 2011, UK was the largest EU investor to China, with a cumulated actual direct investment value of £11.70 billion. UK’s direct investment to China from January to May 2012 was £282 million, the second largest EU investor to China after Germany. (Source: MOFCOM)
- In 2010, Chinese investment stock in the UK was £28.8bn. (Source: Office for National Statistics UK)
- At the end of 2010, direct investment from China to the UK in stock, was £852 million, ranking 4th among the EU after Luxemburg, Sweden and Germany. Figures for 2011 yet to be released. (Source: 2010 Statistical Bulletin of China’s Outward Foreign Direct Investment, jointly published by MOFCOM, NBS and SAFE)
- At the end of May 2012, there were 8 Chinese companies on the London Stock Exchange main market, and 45 companies listed on the Alternative Investment Market (AIM). (Source: London Stock Exchange)
On the home front and ignoring UK visa issues for a minute, around 127,000 Chinese tourists visited the UK in 2010 [France, Italy and Germany each attracted between 500,000 and 700,000]. (Source: SOAS). Even in 2013 arrivals of Chinese tourists to the UK rose by some 8% but the average increase worldwide was 17%, so a lot more room for improvement
However, Chinese visitors tend to stay longer in the UK – 18% stay more than one night in the UK compared with other European countries - and they also get about more.
Chinese tourists spend an average £202 a day on trips to Europe, and can spend more than £600 in one shopping trip, more than Russian, Arab or Japanese travellers (Source: Richard Ellis consultancy)
Chinese travellers are tend to buy more luxury goods abroad than tourists from any other country and London is the top European destination for these. 30 percent of Burberry’s sales in its UK stores were to Chinese customers (Source: Burberry) and Chinese shoppers spent £200 million in Bond Street, London in 2010, representing a 155 percent rise on the previous year. (Source: London Luxury) Chinese tourists also spend on average four times as much as other foreign visitors.
Of course, travellers have always shopped. That’s part of the experience. In recent years however, the Chinese have begun to travel with a vengeance and vacation shopping has become the central point of their trip – brand-name goods are cheaper in the UK than back in China, with the added kudos that when they get back home, they have proof that they’ve been abroad!
So, whether you want to take your business to China or catch them when they come a visiting, you can’t afford to waste time. While you’re umm’ing and ahh’ing, France, Spain and the rest of Europe are laying down towels beside the pool… and that’s after they’ve got them hooked with Chinese language webpages and some serious social media promotion on WeChat and Weibo to name but two!
So, c’mon. Dip more than your toe in the water and if you’re nervous, don’t worry, we’ll supply to water wings.