Business Weekly

Ting Zhang, China Business Solutions, Cambridge

 No, we’re not talking about the Olympics here: “Going Global” means economics and enterprise. And China means business for the UK.

The lesson is that the key to success in these business Olympics is not a winner-takes-all attitude, but that partnership and co-operation can make winners of us all. The signs are clear that the UK is picking up the pace of the challenge set by China. So who can share the billion dollar pie?

This month in Beijing, UK Prime Minster Gordon Brown extended the welcome on China’s growing overseas direct investment (ODI) in the UK.

“I want Britain to be the first location for Chinese investment,” he said.

Speaking of his wish for a “new level” of Anglo-Chinese partnership, the Prime Minister urged “closer co-operation between our two countries” as crucial for the economic prosperity for all.  He said that he wanted to see a 50 per cent increase in trade by the end of 2009.

China premier Wen Jiabao responded: “We will expand trade and investment immediately.”

So, it’s very clear that Chinese ODI investors are pushing at an open door in the UK. But, who can share the billion dollar pie?

Ting Zhang of China Business Solutions, the specialist Cambridge-based consultancy, says: “For China to sustain economic growth requires acquiring competitive advantages.

“Therefore, it has to institute long-term partnerships with international players. Utilising M&A is the best and quickest approach to acquire strengths and then expand economic growth in developed markets.”

Ting Zhang has over 17-year’s experience of international trade and FDI/ODI between the UK and China.

Some recent subtle changes are already evident. She offered a glimpse of the future: “Increasingly, our company has been providing consulting services to some of China’s most well known private companies.

“China firms are struggling for further room for the economy growth within itself. They have to deal with the overcapacity of domestic economic activities.

“They are ambitious to learn western managerial skills and know-how to establish their own brands in the marketplace, and then increase their international awareness and positions.”

And she believes that there is much more to come: “Chinese enterprises are eager to offer their innovative technologies in order to develop globalised appeal.

“They want to swiftly move away from ‘pile it high, sell it cheap’ and ‘Made in China’ scenario, to situations of higher added value, higher quality and ‘Invented in China’.

“Meanwhile, China government’s ‘Going out’ strategy and financial support are strong motivators for Chinese enterprises to build a new business outside of China.”

Ting Zhang added that from the beginning, China Business Solutions has worked closely with UK public sector, at local, regional and national levels.

“We have been commissioned by various governments to carry out research projects in order to support strategic development of Anglo-Chinese enterprises.”

Noticeably, China Business Solutions’ research services have also been used by European governments and Chinese Government departments. In recent years, they have increasingly been engaged by some UK and European agencies to help shape their strategy to attract inward investment from China.

“China Business Solutions also provide value-added services to support Chinese companies wishing to enter and set up in the UK, through advice on entry strategy, technology collaboration and distribution channels.”

Since entry to the WTO in 2001, and with its expanding economic power starting to engage with international investment opportunities, by 2006, China’s ODI had increased to a figured of USD 16.13 billion. (China Ministry of Commerce figures).
 
An Ernst & Young report indicates that the UK is the largest recipient of Chinese FDI in Europe.

London is the most popular marketplace for Chinese companies expanding into Europe. More than 400 Chinese companies have invested directly into the UK and almost 50 Chinese companies are now listed on the London Stock Exchange.

Why is the UK the favourite target country for Chinese enterprise  investment?
Ting Zhang pointed out that the UK’s lighter regulatory approach and open trade environment has led to a globalised marketplace to state owned and private investors in the country.

“It’s open for business,” she says.

“Furthermore, the UK’s direct access to continental Europe, Africa and Middle East territories is highly beneficial for Chinese firms to easily expand across the EMEA markets.”

Ting Zhang indicated that Chinese ODI is driven by mounting demand and requires sourcing of international energy and raw material resources to secure their survival and cost advantages.

She categorised the primary key sectors that China’s FDI in UK has been focusing on as: retail, manufacturing, IT and telecommunications. 

Most recently, as a consequence of China’s critical environmental and pollution issues, renewable energy and natural resources have topped the prioritised investing sectors.

One of the biggest challenge facing Anglo-Chinese enterprises is the hiring of bilingual experts to bridge the language gap and establish better understanding of business perspective.

“We’ve expanded recruitment facilities to help British and Chinese clients search and select English-Mandarin speaking professionals in the UK,” said Ting Zhang.
“We are very circumspect in putting round pegs in round holes to ensure the future development of business for all concerned. Square pegs similarly.”

• Ting Zhang is CEO of China Business Solutions based in Cambridge, UK.
China Business Solutions, St John’s Innovation Centre, Cowley Road, Cambridge CB4 0WS; Tel: +44 (0) 1223-421968;  web: www.chinabusinesssolutions.com 

TrackBack URI for this entry

Comments (0)

Subscribe to this comment's feed