By Linda Fu, International Client Relations Director, HBJ Gateley
By most measures, China’s economic growth has been one of the biggest success stories of the last 20 years. The International Monetary Fund reports that China’s overall economy has replaced the US for the number one spot globally. Despite recent slowdowns, China’s economy is now worth $10 trillion dollars and is still growing at 7% annually. No wonder foreign investors are flocking to this new economic power. For entrepreneurs in Scotland, setting up business in China could seem an overwhelming prospect – the language barrier notwithstanding, there are well-documented cultural differences to consider. However, Chinese appetite for top quality plays very well into Scotland’s long heritage of high-end manufacturing and world-class services, which provides an excellent starting point for businesses with aspirations in the Far East.
Scottish exports like malt whisky and certain food products already fare well, particularly those at the premium end of the market where margins are most attractive. It also helps to get around the hitherto-tricky issue of reconciling Scotland’s production capacity with the enormous volume of the Chinese mass market.
The quality of professional and business services is also well-suited to the Chinese market, with lots of new and growing businesses seeking the input of experienced and knowledgeable advisers. Historically, though, Scotland has shown stronger ties dealing with Europe rather than Asia. However, in recent years the Scottish Government’s China Plan has established a positive relationship between the countries to encourage more reciprocal business. Organisations like the China-Britain Business Council (CBBC) and Scottish Development International (SDI) are excellent places to start.
One of the fundamental elements of making your first foray into China is to establish a link with a local contact or agent on the ground, who must be the conduit through which you grow your presence in the country.There are several organisations, HBJ Gateley included, with the relationships and understanding of the Chinese market to facilitate the necessary links. This is a critical step in the process; any Scottish company wishing to trade with China needs to have a full-time employee in the country – this helps demonstrate commitment to investing in China and is an essential element of any export strategy.
Other practical considerations include the extent to which regional authorities are open to business with the West. This can vary significantly, so it’s wise to have a solid grasp of where your efforts are likely to be most fruitful before committing any resource.China presents a huge opportunity for Scottish companies to trade with one of the largest economies in the world. At the moment, we’re only scratching the surface of what’s possible, with much greater opportunities for both countries than is currently being achieved. The good news is that we have the organisations and the links already in place to grow Scotland’s relationship with China. Whether you are a seasoned exporter with an eye on Chinese growth, or a small start-up with a specific opportunity in the country, the support exists to make your venture a success.