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Chinese lesson on making things for export

I’m not long back from a personal tour of four cities in China. Whilst my visit was not specifically for business reasons, it was impossible not to think about the enormous opportunities in a country which has gone through three decades of extraordinary change. China is on Glasgow Chamber’s international trade priority list. 

During a long conversation in a restaurant in the Chinese city of Hohhot, the capital of Inner Mongolia, I was challenged with one very simple question. I had asked my Chinese dinner companions, who own their own successful construction company, what they thought Britain should be doing to increase its exports to China. ‘What do you make? We know what the Germans make, or the Americans. What do the British make?' 

In 2015 the UK exported nearly £16 billion of goods and services to China, making it one of our top 10 trading markets - but the Germans exported well over three times as much. On a positive note, the ‘Great Britain’‘ campaign was all over the four airports I travelled through in China and some brands like Burberry and Dyson were easy to spot in Shanghai or Chengdu. Congratulations also to Scottish brands Edrington, BrewDog, Mackies and Walkers Shortbread. Their products were not hard to find. 

I should mention our universities. Their success in attracting young Chinese to study in Glasgow has been sustained, and whilst I wasn’t able to take up the kind invitation from Glasgow School of Art to visit their Beijing offfice, I certainly will when I next return to China. 

But despite these achievements, Scotland exported only £600m in 2015, which is about half of what you might expect given the UK figure. I met with Scottish Development International’s Julian Taylor, who leads the excellent service Scottish companies can get when they are looking to break into China. It’s often seen as a difficult market. Very few of us speak Mandarin and building relationships does take time. Repeat visits are essential. But for the Germans it has clearly been worthwhile, and it can be for Scots companies too. 

Which takes me back to that question. What do we make? Do our companies need to do more to exploit the Chinese opportunity, or are there simply not enough companies with products to sell? SDI can help with the first question, but it falls to the Scottish Government’s Manufacturing Action Plan to answer the second. 

 

 

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