The China Trade Tracker, a new quarterly publication offering expert insight into UK-China trade, shows that over the past decade, UK exports to China have more than tripled to over £30 billion, making China the UK’s third-largest trading partner
The October 2021 edition of the report brings together official HM Treasure and the Office for National Statistics data with CBBC expert analysis to highlight key trends and themes of the UK’s trading relationship with China – nationally, across regions and key sectors.
At a time when many UK companies are facing tough trading conditions at home and internationally, the China opportunity is more important than ever for UK businesses and jobs, especially in relation to the UK’s post-Covid recovery. The report highlights the benefits to the UK economy of a healthy trade and investment relationship with China, which is expected to be the world’s largest economy by 2030.
Exports to China grew 3.2% last year – despite the Covid-19 pandemic – while exports to Europe and the US fell. The emergence of China’s middle-class is a primary driver behind a recovery in exports. Looking ahead, China will account for two-thirds of the growth in the global middle class in the next decade, equivalent to around 400 million people, according to recent findings from the DIT. As Andrew Seaton, Chief Executive of CBBC, noted, “It is vital for the health of the UK economy that UK business does not miss out on this.”
The report illustrates a shift in key exports over recent years, highlighting the emergence of new export markets which have shown significant growth since 2015, including consumer goods and trade in services and financial products.
For example, food and drink producers have benefitted from rising demand in China. In the second quarter of 2021, sales of animal fats and vegetable oils to China tripled compared to the same period in 2020. Oils and fats have witnessed an astounding increase in demand from China, with exports rising 7,225% between 2015 and 2020. Animal fats and vegetable oils are generally used for cooking and food processing – two industries which have particularly profited from China’s growing middle class.
It has never been more important to recognise the importance of the trading relationship with China in supporting British businesses, jobs and livelihoods across all sectors and regions of the UK.
— Andrew Seaton, CBBC Chief Executive
Nevertheless, the growth in oils and fats exports also highlights some important risks for consumer-focused UK-China trade. Food industries, like meat and other animal products, are easily vulnerable to disruptions, be it due to problems in the cool chain or – more frequently – hygienic problems such as animal diseases. Trade is, therefore, more vulnerable and will require increased levels of mutual trust and cooperation at both the business and the government level to ensure that temporary setbacks do not reverse the positive trends of the coming years.
Looking at the top 10 exports for each region, examples include a growth of over 650% of metals in the North East, with a value of over £180 million; and an increase of over 840% of meat and meat preparations in Yorkshire and the Humber, worth almost £68 million.