A quarter of UK SME-sized enterprises in the UK expect future growth to come from China, having named the country as the biggest export market opportunity for business in a new report.
The survey, carried out by global payment service firm Western Union Business Solutions, showed the quarterly economic confidence survey of over 1,000 UK SMEs engaged in international trade.
It showed 25% stating China as an area for business growth, following by Europe (22%) and North America (18 %).
China far outweighs the other BRIC nations with India (4%), Brazil (2 %) and Russia (1%).
SMEs continue to internationalise trade; 35 % surveyed said revenue from international trade had increased over the past 12 months, generating 23% of SME business revenue. Nearly a third (31%) said their business’ international trade will increase in the next 6–12 months.
Exports to traditional European markets remain by far the largest export market for UK SME goods and services, with 81%of SMEs exporting to Europe, an increase from 74% a year ago. Additionally, 53% said mature northern hemisphere Western markets will remain their largest customer base.
However, over a quarter (28%) said emerging markets and the BRIC nations will drive trade over and above mature southern hemisphere Western markets (18%).
Christina Hamilton, UK managing director at Western Union Business Solutions, said: “As expected, Europe and North America remain key trade partners for British businesses, but it is clear from our research that the UK’s SMEs are looking to engage with emerging economies, such as China, in order to maintain and grow their business revenue through exports.
“It is very encouraging that over a third of SMEs have seen business revenue increase from their international trade activity. While SMEs are still emerging from the economic turmoil of the past few years, they are taking steps to diversify beyond a domestic customer base and to internationalise their offering.”
The survey did also show a worrying picture of businesses being plagued by a mix of late payments, cash flow concerns, credit availability and currency volatility.
Over half (56%) of UK SMEs identified late payments as a top concern, an increase from 42% in the previous quarter.
An additional 55 % were concerned about cash flow, followed by customer loss and currency volatility (both 51%) as the next biggest concerns.