Midlands urged to export to china by DIT

Ian Harrison, Head of Exports in the Midlands at Department for International Trade (DIT), is urging businesses in the region to take advantage of the growing exporting opportunities in China.

In recent years, China has become one of the world’s dominant economic powers. With a population of more than 1.3 billion, a rapidly-growing consumer market has emerged as the appetite for British-stamped products grows.

As a result, the country is fast becoming an exporting destination of choice for ambitious Midlands-based businesses. HMRC figures show that the Midlands accounted for an enormous 31.2% of the UK’s goods exports to China in 2016.

Despite strong demand, many businesses in the region consider there to be significant barriers to exporting products to China, whether this is understanding cultural, legal or economic nuances or not having first-hand experience of the market. However, these barriers can be overcome by seeking out help and support from those who help businesses start their exporting journeys to China on a daily basis.

For instance, businesses must be aware of the importance placed on strong interpersonal business relationships in China: a concept referred to as “guanxi”. Businesses are expected to deliver on time and on budget, and meeting these expectations is a vital way of maintaining trust.

Exporters should also understand that China does not operate as a single market – there are different regional economies and economic hubs that must be considered. This is why research is essential when considering exporting, to identify and carve out a slot in the market place for a specific business proposition.

On a practical level, the due diligence process must be just as thorough as it would be in the UK. This can start with desk research and progress into running credit checks and taking out the appropriate insurance before agreeing to an international contract to mitigate against any problems that may be encountered.

Sourcing a sales representative, distributor or partner on the ground in China which already has an in-depth understanding of the market and useful contacts will also help a UK organisation find its feet in the early days of trading.

Clearly, there are several considerations to take into account when doing business in China, but these can be addressed with a carefully researched and defined long-term exporting strategy.

Simworx, a Midlands-based business that specialises in 4D-effect cinema and motion simulation attractions, has experienced significant growth following its success in China. It first looked at the Chinese market in 2008, as it was keen to explore the country’s growing attractions and entertainment market.

With support from our international advisers and funding from UKEF, Simworx has secured a contract to install new rides in several new venues for a family entertainment centre group in Shenyang. Additionally, Simworx is currently working on two 4D cinemas for a large theme park developer in China. Currently 20% of the firm’s order book goes to China, and this is expected to grow to 40% during 2018.

Businesses in the Midlands are uniquely positioned to take advantage of the many opportunities that China offers. DIT working closely with the Midlands Engine partnership is the only area in the UK to have a dedicated strategy entirely focused on exploiting commercial opportunities in China.

The Strategy was launched in Shanghai in November last year and provides a framework for developing trading relationships between the Midlands and six areas in China.

DIT support is also available for Midlands businesses of all sizes looking to begin or develop their exporting strategy. Our monthly ‘Exporting to China’ workshops provide information on subjects ranging from distribution models and licensing, to engineering and food and drink exports. They also include presentations and guidance from the China-Britain Business Council, and advice from businesses who are already exporting successfully to China.

The wealth of opportunity at the fingertips of so many businesses means that now is the time for management teams to capitalise on the demand for UK products and set their sights on China.