The time for UK manufacturers to see China as an opportunity instead of a threat is now, says MAS expert.
Simon Griffiths, chief executive of the Manufacturing Advisory Service-West Midlands (MAS-WM), believes the recent visit by David Cameron to open up new trade links with the world’s biggest economy underlines growing momentum and confidence from UK companies to do business in China and Asia.
He points to demand for Western technology, a new found appetite for low carbon applications and a surge in the desire for global brands and cutting edge consumer products amongst the affluent middle classes as key drivers in the shift of power.
Entry into the Chinese market should not be taken lightly and that is why Griffiths, a former GKN and Land Rover engineer, is keen for firms to come forward and make the most of the business and international trade support available.
“In recent years, China has been viewed as the big bad player, eating up high volume work and materials at an unbelievable rate,” explains Simon.
“This has had a major effect on UK manufacturing and resulted in our industry moving towards the higher value added part of the global chain; this could now be the right time to make the most of this shift in approach.
“Chinese firms are desperate to incorporate the latest technologies and innovations and this lends itself perfectly to the UK’s knowledge base, one of our greatest strengths.”
“Not only are there opportunities to export to China, there is also a move to bring work back to the UK,” he continues. “We are beginning to see orders return to our shores, from international companies worried about the technical expertise of manufacturing businesses in Asia.
“These factors aren’t simply marketing rhetoric. There are hundreds of examples in the West Midlands alone of companies exporting considerable amounts of their turnover. Birmingham-based Brandauer’s expertise in complex pressings has seen them achieve nearly £3.5 million of annual sales in this market.”
MAS-WM is working closely with Wolverhampton North East MP Emma Reynolds, who recently returned from a trade mission with the China-Britain Business Council (CBBC).
Together they have formulated a ‘China in your hand’ event in Birmingham on January 28th to give existing and fledging manufacturing exporters the chance to talk to experts about doing business in the country.
As well as highlighting new opportunities, growing markets and the potential for low cost sourcing and joint ventures, the interactive seminar will also tackle some of the key concerns and barriers associated with Chinese trade.
“Doing business with China is not for the faint hearted, but it is nowhere near as difficult as it was a decade ago,” explains Simon.
“Language and business etiquette continues to be a key concern, as does fluctuating currency exchanges and the fear of intellectual property being copied – these are all areas we will address during the two-hour event.
“This is meant to be an initial taster for companies and then from there they can tap into more tailored support through the Manufacturing Advisory Service and the vast experience and resources of UK Trade & Investment and the China-Britain Business Council.”
Rachel Eade, MAS-Auto Cluster Manager, has been responsible for putting the workshop together. “The biggest change is a willingness to work together with the UK, as the Chinese are keen to embrace Western technology to enable growth while also working towards Kyoto carbon reduction targets,” she says.
“Car manufacturers are also investing heavily there and this represents a good opportunity for auto suppliers to get in early with value added parts, design work and prototyping.
“Speed of communication is so much faster now, with CAD files being transferred within seconds. The cost of transportation [i.e. containers] continues to be relatively cheap too.”