In response to ‘Export focus: China’

Following TM's focus on export opportunities in China last month Anthony Shepherd of export agency Shepherd International, responds in a bid to crunch the data on export opportunities in China and highlight the wealth of professional help available to companies with export intentions beyond government bodies.

2011 British exports to China worth £8.8 billion

There are 22 Chinese consumers for every one in British. This is why everyone is

Its surprising how much the UK really exports to China
Its surprising how much the UK really exports to China

encouraging UK manufacturers to sell to China. And everyone knows China’s growth rate forecast for 2012 is 8.5%.

Quite natural then, for politicians and quangoes to exhort, push, and cheer exporters into China. But as, usual, saying is easier than doing and the road is not smooth for manufacturers who must swallow upfront market entry costs, and take risks on market entry, payment, and intellectual property exposure.

According to HMRC’s uktradeinfo.com the actual figure for British goods exports to China during 2011 totalled £8,772,567,740. This is a healthy increase on the £7.23bn achieved in 2010. But amid all the gung-ho optimism, it helps to look at reality, and what exactly UK sells into China, in order to decide whether to invest. Another vital issue is whose specialist market entry support to use.

What the UK really sold to China in 2011

Some surprises. At first sight of the table (right), one goods category stands out. Scrap.

China purchased at least £1618m of UK’s scrap and waste materials to fuel its voracious industrial appetite. This means around 20% of our exports are scrap or recycled materials.

This clearly shows that simple headline figures for UK exports to China blur the reality of opportunity for UK products and manufacturers need to be careful when researching and testing the markets in China’s 23 provinces to be assured of their real proportions.

Choices of support and expertise in UK for researching and testing Chinese markets, and making deals don’t stop at UKTI and CBBC. The expertise of many more private commercial Chinese business organisations are open to manufacturers. Another choice is to trade via Hong Kong – lower risk for sourcing or exporting.

China, IP, and Sir James Dyson

Manufacturers still risk technology copying and breaches of IP in China. Our Government is working with Chinese counterparts to reduce the problem. But meantime, global brands like Apple are compromised. The BBC reported in July 2011 that Chinese government officials investigated five fake retail outlets posing as licensed Apple Stores in Kunming. Staff understood they were working for the real US Apple brand.

According to the Guardian in December 2011, Dyson, producer of vacuum cleaners and bladeless fans, placed a private detective in one factory to obtain photographic evidence of counterfeiting. It is pursuing 20 design or patent cases around the world, many of them related to the sale of products made in China and has spent £1.9m on legal fees.

Online Chinese marketing and search advertising for UK manufacturers on Baidu is also now possible through baiduint.com which is online in English. China’s leading search engine, Baidu has 83% of the market and 1 billion hits daily. Mandarin-speaking YinTong Betser of ActiveUKChina in London observes: “We don’t see ourselves as competing with CBBC, as we are price competitive, more adaptable, and flexible without their overheads.” Other China specialists in the UK offering support to manufacturers include:

  • www.ChinaBusinessSolutions.com, 01223 421968
  • www.chinabusinessservices.com, 0207 253 4590
  • www.activeukchina.com, 0208 372 7269
  • www.grant-thornton.co.uk, Grant Thornton China Services Group, 0207 7282691
  • www.marcltd.com, Manufacturing and Retail Corporation, 01227 459 999
  • www.pwc.co.uk, PwC Emerging Markets, 0207 213 2232
  • www.HKTDC.com, Hong Kong Trade Development Council, 0207 616 9502