The 29th March 2019 is only getting closer, but we don’t seem to be any closer to striking a deal with the European Union regarding Brexit
Despite this concerning issue, less than a third of UK firms have a back-up plan in place in case of no-deal exit. A no-deal Brexit would hit everyone hard, but it would also open the UK up to making trade deals freely with the rest of the world. It would not affect trade with countries outside the European Union, which is precisely what the UK seems to be planning for with its Prime Minister having recently visited China for talks.
But is Britain’s interest in a trade deal with China echoed back? After all, in 2016, the UK imported £42.3bn worth of goods from China, but exported only £16.8bn to China in return. But then again, that’s not entirely proof that China wouldn’t increase its British exports demand if a trade deal was in place — the country is already hoping to widen its trade with The Belt and Road Initiative.
The plan would help China, as well as Asia more widely, acquire strong trade links around the world. The “belt” side of it roughly equates to the land connections it will build through railroads, and the “road” refers to a sea-route of trade. Essentially, China is building a new Silk Road, and 71 countries are already part of the project, including Russia and New Zealand.
The initiative hasn’t had unwavering support from the UK however; Chancellor Phillip Hammond noted his support, where Prime Minister Theresa May seemed hesitant to back a plan that wasn’t guaranteed to succeed, says Business Insider UK. This could, of course, change as the UK’s relationship with China evolves. In fact, we have already enjoyed success in China before Brexit has even resolved. At the start of 2018, during talks between the UK and China, the 20-year ban on British beef was lifted. The deal is purported to be worth £9bn to the UK.
A worldwide ban on British beef exports came into effect through EU ruling in 1996, as a result of “mad cow disease” panic. It wasn’t until 2006 that the EU lifted the ban, but other countries chose to retain their ban on the product, including China.
So, what does China want to import from our country? What markets and UK businesses could, potentially, fare well with Chinese consumers? According the Telegraph, top British exports the Chinese enjoy are:
- British cars
- Burberry, and other designer labels
- Scotch whisky
- Scottish salmon
Brands big and small can make it in the Chinese market. The Creative Industries reported on the success of hairbrush and haircare brand Tangle Teezer over in China. Tangle Teezer’s International Managing Director, Gemma Clarke, confirmed in the article that China became its second biggest sales market in only 3 years trading there.
Tangle Teezer saw success after the product was purchases and shared on social media by a popular Chinese model. China loves its online shopping, so influencers should not be overlooked when planning to cater to the Chinese market.
The right produce and the right approach can see businesses faring well in the Chinese market. At the very least, firms need to plan for the eventual shake-up to the UK’s ties with the European market once Brexit comes into play, and time is running out to start building the foundations. This small window of golden opportunity has been highlighted by Rebecca De Cicco in regards to the UK’s construction industry in particular. The director of Digital Node outlined how 70% of buildings over 200 metres tall completed in 2017 were built in China, and so the country is increasingly interested in building information management software and crowd simulation. The use of British construction software has already proved its value to the Chinese construction sector in Beijing’s new airport, the Beijing Daxing International. Projected to see 45 million passengers a year, the airport’s construction has benefited from crowd simulation software provided by UK structure design software experts, Oasys. The software alerted the construction company and designers to any potential bottlenecks, congestion problems, or other inefficiencies.
Looking for a way to approach the Chinese market successfully? The Business Magazine gave the low-down on how businesses should do this/ As with any overseas market, the magazine advises companies to consider the culture of the country they are trading with; in this case, explore China’s culture. The general consensus is to be aware that what works in the UK may not work in China’s business ground, and as relationships can take a long time to build, jeopardising them with an ill-placed comment or miscommunication can slow that pace even further.
Brexit will be on us sooner rather than later, so firms need to be ready for the changes to come. Whether or not we retain trade deals with the EU, and to what to degree, the wider world is coming to the UK. Will it be a great opportunity for businesses, as some predict?
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