Anglo-sino partnerships a must, says Judge professor
UK companies should forge partnerships with Chinese counterparts to fully leverage potential new trade.
The joint approach is suggested by Peter Williamson, Professor of International Management at Cambridge Judge Business School.
Professor Williamson says the UK needs to plan on a much grander scale – beyond pure exports.He said David Cameron’s recent visit to China would help oil the wheels of business for British companies but they needed to think ‘bigger’ than they have done in the past. “Everybody is now looking to China for growth and I think it is a starting point. I think that the Chinese appreciated that there is backing at the highest level for trade and alliances therefore it is a starting point but it is not going to get us the whole way. “Air China just announced a large order for Rolls-Royce engines a couple of days ago and that was on top of the deal that was announced during Cameron’s visit with China Eastern Airlines also buying Rolls-Royce engines. “The focus on exports alone is not the biggest gain we can achieve from this collaboration and closer links between Britain and China, thinking about winning in China and thinking about exports is not thinking big enough. The real prize out there is the chance for British companies and Chinese companies to pool their resources and capabilities to win in global markets.” Professor Williamson said there were already examples of new partnerships emerging between the rest of the world and China and that ‘scaling up’ was a solution to the UK’s anticipated slow growth rates: “In my experience if there is market opportunities and strong profits to be made by collaborating we will find a way to do it. We are already seeing new deals being done, such as General Motors and SAIC, the Shanghai automotive company. “They are going to pool their resources and invest 650 million US dollars in trying to break into the mainstream car market in India. I haven’t seen many examples of British and Chinese Companies doing this, although you do see a couple. “The Audio Partnership in Cambridge is taking its core technology and combining it with some companies in China that have design skills, they are improving the value for money of the technology so that they can break into the mainstream market rather than being in a specialist niche market. “If you are sitting in an economy that is growing quite slowly, and I think we won’t see UK and US growth bounce back any time soon, you can’t experiment with new technology quickly enough. “But in a country like China that is growing so fast, you can go through cycles of piloting things very, very quickly because the market is growing faster. Britain has a lot of interesting technologies and by combining these with this wonderful ‘sandpit’ in China, that allows you to experiment, this is a way to speed up this commercialising process and avoid some of the difficulties of slow growth in the UK at the moment.” Mass markets hold the key to commercial success in the future said Professor Williamson: “We need to be able to combine our technology and product design with the kind of process design and manufacturing skills that exist in China to make sure we can produce products which can access the mass markets around the world. “These markets are going to be growing in Latin America, Africa and the rest of Asia. As we continue to face the issues of this crisis and its aftermath there is going to be a big value for money market in the US and Europe, so we need to get our products out of that high end niche and into the mass markets and the Chinese can help bring complementary skills that enable us to do that.” He said these new partnerships between UK and Chinese firms would be more radical than the previous associations that existed between the two countries: “I am talking about China playing a role much deeper through the value chain to take our prototypes and turn them into commercialised products. “We really need to use Chinese partnerships in the later stages of development to make the product more competitive and to develop new manufacturing processes to make that new technology, so a much bigger partnership rather than the old kind of sourcing and assembly approach of the past.” • To listen to the full podcast please go to: http://www.jbs.cam.ac.uk/interactive/expert_comment/2010/williamson_if.html