'New heights' in Sino-British trade and investment

As the China-Britain Business Council celebrates its 60th anniversary, its Chief Executive Stephen Phillips sees trade and investment reaching new heights.

"As Prime Minister David Cameron embarks on his visit to China, one point on which we can be unequivocal is that the UK-China trade and investment relationship is strong and getting stronger at an unprecedented rate," Phillips said.

"This is, of course, excellent news for both countries and for our businesses.

"But at the CBBC we firmly believe it is a commercial relationship that still has not yet reached its full potential by any means," he said.

In recent months, a number of senior ministerial visits from the UK to China have conveyed the message that the UK welcomes business with China and fully intends to realize the immense potential for further development.

This buoyant mood - supported by a healthy political dialogue - should send a clear message to British and Chinese companies alike that this relationship is both a tremendous opportunity for the future; and is happening now.

Cameron said earlier this year that the British government highly values its trade and investment relationship with China, emphasizing that each country has much to offer the other and his government is working hard to maximize the potential of the cooperation.

Phillips said "at CBBC, as we enter our 60th year of supporting UK-China trade and investment, we have witnessed the first-hand remarkable progression of the relationship."

"Recently that progression has veered ever upwards and the present economic situation is unprecedented."

UK exports to China have quadrupled since 2002 and doubled since 2009.

The latest figures from the UK Office of National Statistics put the total value at 10.5 billion pounds ($16.8 billion) for 2012.

In the first quarter of this year, the average monthly exports to China broke the 1 billion pounds barrier for the first time.

And UK exports to China increased faster last year than those of France, Germany and Italy for the third year running, according to data from the Chinese Ministry of Commerce.

The latest data from China Customs shows that Britain became the country's second-largest trade partner in the EU in the first 10 months of 2013.

Chinese investment in the UK is also flowing.

In 2012, China was the third-largest investor in the UK by volume of projects.

A rapidly growing proportion of the investment is coming from the private sector, although State-owned enterprises such as Sinopec and CNOOC continue to take advantage of the UK's open investment environment by concluding billion-dollar deals this year for stakes in North Sea oil and gas.

"At CBBC we see China's 'going out' strategy as an ideal foil to the UK government's open policy on inward investment.

"The surge of confidence among public, private and individual Chinese investors only underlines that we are not alone in this view," Phillips said. Chancellor of the Exchequer George Osborne heralded a "new dawn" during his visit to China in October as he announced a deal with China General Nuclear Power Group to take a stake in a new nuclear power plant in southwest England.

Mayor of London Boris Johnson declared himself delighted by a 1-billion-pound deal with ABP earlier this year for the construction of a state-of-the-art business district at the Royal Albert Docks - one of many Chinese investments in London that have been announced in the last 12 months.

The telecom equipment maker Huawei, which already employs a staff of 800 in 12 offices in the UK, this year cemented its status as one of the leading investors in the UK by committing to inject a further 2 billion pounds in the next five years that will double its UK workforce.

There are many reasons for the UK to be such an attractive destination for Chinese investors.

They are attracted to a diverse range of fields including aerospace, advanced manufacturing, financial services, energy, infrastructure and life sciences, as well as a deep, international talent pool.

But perhaps its advantages to Chinese companies are best demonstrated by some of the business leaders who have decided to invest billions in the UK.

Wang Jianlin, chairman of Dalian Wanda Group, China's biggest commercial real estate developer, said "the London property market has excellent investment opportunities".

Ren Zhengfei, CEO of Huawei, said the UK is "an open market which welcomes overseas investment" and praised it as a center of innovation with a highly skilled workforce.

Phillips said that Britain leads the world in both innovation and creativity.

"The country's visionary spirit is perhaps best exemplified by the creative industries, ranging from design and architecture - as shown in the winning UK Pavilion at the 2010 Shanghai Expo and the opening ceremony of the 2012 London Olympic Games - to such fields as fashion, online gaming, animation and advertising," he said.

"China's promise in these industries is now beginning to emerge.

"And Britain, as a well-established actor, has a rich mixture of long experience and new ideas in creative and innovative ventures, which we hope we can share with China by way of cooperative partnerships," he said.

London remains the leading financial center in the world, boasting an unrivalled professional services sector underpinned by an internationally admired legal system.

The sheer volume of activity in the city is enough in itself to justify this reputation.

London is also now the largest center in the West for renminbi trading - followed only by Chinese mainland and Hong Kong.

Twenty-eight percent of all international renminbi payments last year were made in London.

CBBC is playing a key part to support the growing tide of Chinese outbound investment.

CBBC's China program has been designed to help guide the growing flow of outbound Chinese investment both towards the UK and just as importantly to position UK companies as partners of choice around the world.

"Our series of CBBC China outbound conferences and seminars, which have recently been held in Shanghai, Chengdu, Chongqing, Xi'an, Shenzhen and Guangzhou, highlight opportunities for British and Chinese investors to cooperate in the UK, China and third countries," Phillips said.

"More seminars will follow across China in 2014."

And there are tremendous opportunities too for UK businesses in China.

British companies and brands have long been reputed around the world for excellence, innovation, design and ambition.

This is well recognized in China.

The rapidly growing new class of ever-more sophisticated Chinese consumers value UK's famous brands and high quality services and sound reputation. Luxury and premium goods, education, the creative industries and financial services are just some of the areas where the 21st century China has discovered a demand, and where the UK finds its niche.

Meanwhile, Chinese consumers enjoy visiting the UK, and the country hopes to build on the estimated 1,600 pounds that the average Chinese tourist now spends during a trip to Britain.

"With 13 offices across China and 10 in the UK, and the work we do in China is to research local markets, identify opportunities and foster cooperation between the two countries. We help British companies seize exciting opportunities that these regional cities offer, " he said.

"Just one such area of opportunity is in what we term as 'Liveable Cities'."

One of the Chinese government's immediate tasks is urbanization, a colossal challenge that may involve the relocation of some 300 million people during the next 30 years.

Large-scale and long-term, this undertaking will lead to openings for China and the UK to profit.

"China's aspiration - a harmonious, urbanized and sustainable society - is something the UK has broadly achieved, and as such we can help China to realize its economic aims," he said.

"Our practical experience and expertise in so many fields related to this objective - from healthcare and welfare systems to elderly care, urban planning and green development-can be of practical use to China's development in both the short and the long term."

CBBC's Liveable Cities program focuses on this demand.

This year, the program's three priority areas have been urban regeneration, green buildings and elderly assisted living, which reflect the direction of China's development.

"We are working to help British businesses take advantage of their expertise to partner up with Chinese companies in these fields.

"Another important area of our work is to recognize that small and medium-sized enterprises are major drivers of economic development and jobs in both of our countries.

"They account for over 99 percent of all businesses in China and 99 percent of the private sector in the UK," Phillips said.

Mutual advancement in this area was bolstered in October by the conclusion of a memorandum of understanding for collaboration among small and medium-sized enterprises.

It was signed by Lord Sassoon, chairman of the China-Britain Business Council, and Qin Zhihui, director general of the ProSME Center of the Ministry of Industry and Information Technology.

"We are, therefore, delighted that the prime minister's delegation will include so many SMEs and that we will provide a wide range of activities for them during the visit and upon their return to the UK.

"We expect the trade and investment relationship to go from strength to strength as our economic, political and cultural ties become closer by the day.

"This is a relationship that matters to both the UK and China, and one in which we see a bright present, and confidently envisage a brighter future, for both countries," he said.

zhuanti@chinadaily.com.cn