Global Britain and Great China
are Perfect Partners
Matthew Rous, as a new Chief Executive of the China Britain Business Council, recently he talks about his views on China and the future of the CBBC.
Posted by CBBC on Sunday, 17th September 2017
CBBC is a membership organisation, Mr Rous indicated that we exist for our members and I want to ensure that we add value for all our members. That means servicing an excitingly diverse range of UK companies and institutions, of every shape and size. Some have had a presence in China all the way back to Qing times. Others are more or less new to market. The point is that CBBC is uniquely well placed to deliver a great service by demystifying China and making it accessible, looking beyond scary headlines and interpreting the longer-term trends.
Global Britain and the China of the China Dream are perfect partners, as long as businesses are alive to the opportunities of campaigns such as the Belt and Road initiative and the "Made in China 2025". It’s a fast changing landscape but CBBC can help show the way forward.
I want CBBC to be the first port of call for anyone wanting to embrace and exploit these shared opportunities – in China, in the UK, or through cooperation in third markets.
As Chief Executive, I will be making it my business to keep lines of communication to government open and active, both at national and local level. To that extent I am expecting there to be a good degree of cross-over between what I have done in my work as British Consul-General and the challenge I will be taking on in my new role.
Regarding a post Brexit world, what does CEO see the role of CBBC as more important to forge trade links beyond the EU?
Matthew thought we should put simply, there has never been a more important time for our trade and investment work in China. What CBBC does is going to be crucial to the UK’s prosperity as the "Asian Century" truly kicks in. Of course, we will continue to do what we do in close partnership with the UK government and parliament, the devolved administrations, city regions, local enterprise partnerships, and so on. Our role will be vital as the voice of business. It will be our job to ensure that governments on both sides know what business’s priorities are, and where issues are cropping up that need to be addressed. Our members are at the coal face. They know the reality of doing business in China better than anyone, because they live it in real time. Governments need to know this stuff, and we will tell it to them. It is a real strength of our system that government and business collaborate in this way.
Matthew emphasized in the business world, the most experienced companies of course have a very strong sense of China’s vital importance in the global economy. Unfortunately, however, there are far too many UK firms, particularly in the SME sector, who have great products and strong potential but who haven’t yet focused on China as a significant opportunity.
It is important for British companies to know exactly where they fit into the market, regionally as well as sectorally. The days of the single China strategy are long gone. Looking ahead, the numbers may come down gradually over the next decade or so, but will stay well above growth figures enjoyed in developed economies.
At the same time China’s competitive advantage in terms of the cost labour will increasingly be challenged by newcomers from South and South-East Asia, if you look at it purely in terms of price. But China is also investing heavily in top-quality skills, cleaner technologies and modern systems which are helping to keep industry climbing the value chain and avoiding the middle income trap. This is the Made in China 2025 agenda, on which CBBC has produced authoritative reporting.
We can be confident such initiatives will maintain China’s edge as a manufacturing and exporting nation, notwithstanding concerns around issues like regulation and high levels of leverage.
As to my second concern, I’m afraid I really don’t accept that this is zero sum territory where the winner takes it all. The key thing to grasp is that China is joining a globalised world economy in a way which creates opportunity for her partners.
For the UK, which has huge strengths in sectors such as financial and professional services, design, programming, education and tourism, it’s a chance to extend our own “dominance”, if that is the language you want to deploy, not just to our own benefit but to the benefit of our Chinese friends.
We mustn’t forget the quiet demographic revolution which is taking place on the ground in China. Every year tens of millions of young, professional, affluent and well-educated Chinese are joining the urban middle classes. That’s an incredibly significant opportunity if you are selling consumer goods, or British-style education, or have a strong tourism offer.
It’s important too if your company builds smart cities, or state of the art hospitals, or integrated transport solutions. So as well as getting the hardware right, by which I mean the formal agreements that, allow trade to happen, we also need to get the software right. In other words, our people need to be alert to the rapidly changing nature of the Chinese market and the Chinese consumer.
We must ensure that British businesses are well-briefed and well-positioned to seize the opportunities. For example, China accounts for 42 percent of global e-commerce. Mobile payments in China are 11 times higher than in the US. China is an innovator in retail, leaping over legacy infrastructure like bricks and mortar. CBBC tracks these trends closely and helps our members to keep up with them.
As a CBBC’s new CEO, Matthew has also be questioned about Belt and Road initiative and how shape the world in the future and how will benefit for British businesses?
The answer is determined. Belt and Road has the strong backing of the Chinese leadership at the most senior levels. It will remain a central focus of Chinese external policy for the foreseeable future. The investment flows envisaged are very significant indeed.
And it’s true that if you look at old maps of the Silk Road and Imperial China’s maritime trading routes, Britain was an important destination at the end of the line for both. So some of the money will come direct to Europe, even though the main attention is on South East Asia and Africa.
More importantly the UK is well positioned to benefit as a partner for Chinese investors in third country markets. The English language, English common law, our cultural ties with Hong Kong and Commonwealth countries, and above all our strengths in sectors such as finance, project consultancy and logistics all create really powerful incentives for Chinese companies to work with us. CBBC has produced three reports on this topic which have helped to position UK business at the front and centre on Belt and Road. CBBC members’ global expertise is a key asset which we are keen to make available to our friends in China, as they take forward the Belt and Road programme and as they continue to open up Chinese markets to the global economy.
Editor: Jian Ping Sun