You may have already seen some of our recent social media posts and other communications regarding the recent Chair’s visit to China. The visit was one of CBBC’s most important events of the year, and therefore, I thought you might appreciate a few reflections from me on what has been a fruitful 10-day tour across key cities in China.
The Visit
On the visit, CBBC Chair Sir Sherard Cowper-Coles and I were accompanied by a number of CBBC Board members, as well as local representatives of CBBC member companies.
The itinerary was intensive: starting with two days in Shenzhen, including holding CBBC’s first UK-Greater Bay Area Conference; then onto Shanghai, Nanjing, Suzhou and Beijing (and in my case, fitting in Ningbo and Tianjin on top). I also visited Hong Kong, reflecting the CBBC Board’s decision that we should be taking the Hong Kong dimension to UK-China trade more into account in our work.
Throughout the visit, we were received at a very senior level, the highlight being a meeting with Vice Premier He Lifeng. We also met, amongst others, the Ministers of Industry and Information Technology (MIIT) and of Financial Regulation (NFRA); the Governor of Jiangsu province; Party Secretaries (i.e. the most senior official) in Shenzhen, Nanjing and Suzhou, and the Vice Mayor of Shanghai.
The tone of these meetings was uniformly positive. It is clear that reviving foreign investment and trade flows is a priority for China both at the local and State government levels. In all our meetings, there were positive references to further improving the environment and opportunities for foreign investors.
I was also struck by how often increasing China’s imports and the size of the Chinese market for UK exporters was stressed. We took the opportunity to urge further movement to create a genuine level playing field for international business and that wherever possible, ‘national’ treatment should apply – i.e., that foreign business should be able to operate on the same basis as domestic business. We also urged the greatest possible policy clarity and certainty, including in areas such as data.
During the visit there were positive references to the appointment of Lord Cameron as Foreign Secretary – this being seen by both officials and private individuals as a good sign for the UK-China business environment.
We were also able to meet a wide range of CBBC member companies, including at the well-attended openings of our new offices in Beijing and Shanghai. The move to the new and much improved offices is a statement of CBBC’s commitment to our work across China on behalf of our members.
Photos: CBBC, in collaboration with the Qianhai International Talent Hub, hosted the inagural UK-Greater Bay Area Conference in Shenzhen on 21 November
Economy
On the economy, the picture is clearly mixed. Vice Premier He expressed confidence that China would achieve its 5% GDP growth target this year (and it is worth remembering that in an economy the size of China’s, 5% growth would create a new Switzerland).
However, problems in China’s real estate sector have been well documented. We saw evidence of this in ‘ghost towns’ – uncompleted or unoccupied property developments on the outskirts of a number of cities – whilst we were travelling on the high-speed train from Nanjing to Beijing. This clearly has implications in a number of areas, including local government finance, the construction industry, and consumer confidence.
The recovery of consumer demand, in particular from amongst the broader middle class, has been slower than anticipated at the start of 2023. Meanwhile, investment activity by the domestic private sector remains weak as confidence has yet to recover following a prolonged period of difficulty resulting from a combination of regulations and Covid restrictions.
On the other hand, demand from affluent and young consumers remains strong. Most impressive to me was the continued emergence of Chinese technology-led companies, often heavily IP-based, and with cutting-edge innovation and ambition to scale at speed. This was particularly visible in the low/zero carbon area, with a wide array of new NEV auto brands present on China’s roads but also in batteries and broader renewables technologies.
Sir Sherard Cowper-Coles met with Shanghai Vice Mayor Xie Dong on 22 November in Shanghai
UK Business
The weakness in Western portfolio investment into China has been widely reported. Real businesses doing real business in China seem to be taking a different view. It became clear during the visit that a number of CBBC’s larger member companies have made major investments in China over the past year, including AstraZeneca, IHG, GSK, HSBC, Johnson Matthey, and JLR.
A common theme when talking to UK businesses on the ground was that they could not not be in China, that they were continuing to invest because of the market’s size, scale and expected growth level over the coming decades, and because in many sectors technology being deployed by Chinese players was world-leading. For many companies to remain globally competitive, they must be active in the Chinese market.
Sir Sherard Cowper-Coles spoke at the China International Supply Chain Expo in Beijing
The Role of the China-Britain Business Council
The visit also demonstrated the collective weight of voice that CBBC represents and the unique and pivotal position it has in the UK-China business relationship.
In Beijing, Sir Sherard Cowper-Coles gave a speech at the opening of the inaugural China Global Supply China Conference, which was opened by Premier Li Qiang. CBBC was the only national trade body invited to speak at this ceremony, while Sir Sherard sat next to Premier Li.
That weight comes from the support and engagement provided by you as CBBC members. This enables CBBC, in turn, to fulfil its role as the voice of, and advocate for, the economic relationship between the UK and China.
I am very grateful for the strong support we received from many CBBC members during the visit. It was a real pleasure to be able to meet so many of you at our meetings, roundtables and at the openings of our new offices. We really are blessed to have such a vibrant and energetic community of members across China.
Looking ahead, we will be building on the success of this November as we move into next year and are already looking at options for the next visit. We look forward to discussing it with you and hearing your ideas and suggestions on how we can build another impactful and productive programme.
On behalf of everyone at the CBBC, we wish you a very Merry Christmas and a Happy New Year, and look forward to continuing to work with you closely in 2024 and beyond!
