Happy Chinese New Year, Exporters!

What message has the UKTI got for Sussex businesses in light of recent shifts in the Chinese economy? A resounding: Do not write China off. It is still the fastest growing economy in the world and you can be a part of it…

The Chinese believe that The Year of the Fire Monkey is ideal for starting new enterprises and rising to exciting new challenges.

So what better time to remind entrepreneurs and businesses in Sussex that China remains an exciting and growing market for those looking to expand their international sales. The recent headlines coming from China – that its economy is slowing, and that it is heading towards recession – should be taken in context.

Let’s remember that China is still growing at a rate of 6.5% per annum – currently the highest growth rate in the world. Or that, even if that rate slows, it is still growing – not shrinking. Or, with £1.3 billion worth of goods exported just from the South East to China for the year ending September 2015, it ranks as the 7th largest export destination for companies within the South East.

Businesses can, should and will continue to build on this excellent export performance of recent years because the potential rewards are significant. Companies that export become 34% more productive in their first year, while those already selling overseas achieve 59% faster productivity growth than non-exporters.

Let’s look at which sectors in the South East are doing particularly well in China. In the year to September 2015, the main sector of goods exported to China was Machinery and Transport Equipment, worth £711 million. Other sectors which have seen huge success in China vary from miscellaneous products and equipment, ranging from household fixtures, apparel and furniture, contributing a healthy £412 million, to chemicals and other related products which contributed £150 million to the £1.3 billion export total.

More generally, there is a healthy demand for products developed to western quality control standard, or those that are unique, prestigious or are used in specialist areas. Fashion, food & drink, baby and pet products are examples of consumer sectors that experience a steady demand from China.

That all sounds great but presumably those companies are huge, I hear you cry. Not at all. You may be surprised to know that small to medium sized enterprises are at the forefront of a national exporting drive, called Exporting is GREAT, that is opening opportunities up in markets across the world to UK companies of all shapes and sizes.

Bonnie Mob for instance, who manufacture designer baby and kids clothes and is based in Brighton, is selling its babywear to China. Another Brighton-based company, manufacturers Elmeridge Cables, supply its industrial cables to China as well as working with a local agent. Educational publishers Yellow House English also saw huge growth when it secured a licensing agreement with China’s largest Internet service portal, showcasing its digital content aimed at children learning English as a second language within the market.

So it can and is being ‘done’ by business of all sizes; and UK Trade & Investment (UKTI) – a Government department that helps UK-based companies succeed in the global economy for free – is working tirelessly to make this happen. I’d urge anyone who is thinking about exporting, or who already exports but wants to break into the Chinese market, to get in touch with us. We have a track record of helping thousands of new and established exporters achieve international success.

As part of the Exporting is GREAT campaign we have created a new website www.exportingisgreat.gov.uk, which enables ambitious UK businesses to register their interest in real-time global export opportunities, as well as access expert advice, trade services, training and events. The site already contains over 1,000 export opportunities worth around £300 million over time – with another 1,000 uploaded each month – organised by sector and market, which are easily accessible.

Hopefully by now you are encouraged to consider China as a target export market. Fantastic! One of the most important pieces of advice I give clients looking at, or working in, the Chinese market is simple: never forget that the personal relationship between both parties is crucial for doing business in China. To a business community that works to the mantra of “we do not do business with strangers. Friendship comes first; business comes second”, trust is often seen as more important than formal legal contracts.

Lewis Scott’s six pieces of advice to Sussex Business Times readers looking to export to China:

1. Do your homework – Take time to do some market research to ensure a market exists for your particular product or service. Research who your potential customers and partners might be, as well as your competitors. UK Trade & Investment (UKTI) and our commercial partners China-Britain Business Council (CBBC) offer helpful support to UK firms to carry out such work.
2. Find in-market partners – Take time to find the right partner, agent, distributor or customer. Make sure agents or representatives are the right people for you, and will positively reflect your business and its values and interests. Again, UKTI and CBBC can help you in this endeavour.
3. Relationships are key – Try to visit and meet your partner regularly to cement a trusting relationship as this is a key to long term success in China. Nothing can replace face to face communication. Attendance at many trade missions, exhibitions and trade shows in China are supported by UKTI.
4. E-Exporting is GREAT – Exporting online offers fantastic opportunities and for retail consumer goods in particular, E-Commerce platforms should be explored as growth in this area is spectacular in China. China is one of the largest and fastest growing E-commerce markets in the world. The country now has 649 million internet users of which over 300 million are online shoppers.
5. Have patience – Know your strengths and USPs and be prepared for fierce competition – commitment is respected and rewarded.
6. Protect your IP – For all companies make sure your trademarks and trade names are registered before you enter this exciting market. The Intellectual Property Office (IPO) can offer advice and support with this

By Lewis Scott, Regional Director for UK Trade & Investment South East