By Max Clarke
New reports from UK Trade & Investment (UKTI) London highlight the wealth of business potential for British companies in expanding Chinese regional cities beyond the familiar centres of Beijing, Shanghai and Guangzhou.
The reports are based on research conducted on behalf of UKTI London and the London Development Agency (LDA) by the China-Britain Business Council (C-BBC). This research identified opportunities in the Creative, Software, and Financial and Professional Services sectors, focusing specifically on the cities of Tianjin, Nanjing and Hangzhou.
While it may be natural in smaller developing markets to focus export drives on a few established centres, in a country of China’s size it pays to take a broader perspective. The increasing urbanisation of China — around a third of the country’s 1.3 billion population now lives in cities — and the development of its regional cities, offers huge opportunities to UK exporters and investors.
Trade and Investment Minister Lord Green said:
“China is so vast and diverse that to treat it as one market could be a mistake. These reports are a welcome contribution to our appreciation of trends in regional development in China and a timely reminder of the range of business opportunities they are creating in key sectors in just three of China's many, fast-growing, provincial cities. They offer valuable insight and practical guidance that should persuade more UK companies to seek out the increasing rewards offered by these relatively untouched regions.”
Parveen Thornhill, International Trade Director for UKTI London, said: “These reports are designed to increase the understanding of three of China's important regional cities, drawing attention to the real potential they offer to companies from the creative, software, and financial and professional services sectors in which London is so strong. With incentives for foreign investment shifting from Beijing, Shanghai and Guangzhou, this new research reveals the opportunities that exist in currently less well known regions of China, encouraging exporters to cast their nets wider.”
Noting that only in the last decade has the concept of creative industries existed in China, the creative sector report focuses on growing demand for broadcast and production expertise, digital content, industrial design and architecture.
Companies already active in the market include BBC Worldwide, whose collaboration with China Central Television, “Wild China”, has now sold in over 60 countries. In the digital content field, companies like Communicarta, which is producing maps of China’s metro systems as apps for mobile devices, attribute their success to finding the right Chinese partner; while in industrial design, there are success stories from firms including Tangerine, designer of one of Huawei’s bestselling mobile phones.
Opportunities abound in architecture, due to China’s rapid urbanisation, huge investment in infrastructure, and the reputation of Western architects.
FINANCIAL AND PROFESSIONAL SERVICES
The financial and professional services sector report sees training opportunities across the range of financial and professional services.
For professional services firms, there are openings to work with UK and international companies investing in China, as well as with Chinese firms, in accountancy, international capital markets, corporate finance, corporate restructuring, mergers and acquisitions, dispute resolution, arbitration and IP rights.
In private equity and venture capital, many local firms seek foreign expertise, and there are opportunities with local governments and development zones, which see private equity as a useful way of funnelling capital to deserving companies.
According to the software sector report, the municipal governments in Nanjing and Hangzhou plan to roll out a variety of e-government services, and are keen to work with UK companies developing innovative government-to-consumer applications.
One such firm, NorthgateArinso, has entered a strategic alliance with Nanjing’s Sinosoft Technology, which specialises in e-government services.
E-health opportunities in Nanjing and Hangzhou include electronic health records development, health archive creation, and systems integration and information sharing.
In the financial services sector, opportunities exist to provide internet banking, solutions integration, data warehousing, CRM systems, management information systems, and risk management solutions to financial institutions such as the Bank of Nanjing, as well as to help develop inter-provincial over-the-counter market platforms to enable non-listed companies to exchange shares.
To help companies realise the potential revealed in the three reports, UKTI London will be leading three sector-focused trade missions to Nanjing, Hangzhou and Tianjin from 19 to 27 March 2011.