Could China provide post-Brexit trade deals for businesses?
A recent survey has revealed that UK businesses are no more prepared for Brexit than the government seems to be, with less than a third having a ‘contingency plan’ in place in the event of a no-deal scenario.
Some cities, such as York, have raised concerns over whether European brands such as Nestlé will leave in the event of a no-deal Brexit.
The company is a huge employer within York, and has recently pledged to stay.
But a no-deal Brexit would hit everyone hard, but it would not affect trade with countries outside the European Union, which is precisely what the UK seems to be planning for with its Prime Minister having recently visited China for talks.
But is China as excited for a trade deal with the UK? After all, in 2016, the UK imported £42.3bn worth of goods from China, but exported only £16.8bn to China in return.
But then again, that’s not entirely proof that China wouldn’t increase its British exports demand if a trade deal was in place — the country is already hoping to widen its trade with The Belt and Road Initiative.
Belt and Road Initiative
The Belt and Road Initiative is a plan to build stronger trade routes for Asia.
The “belt” side of it roughly equates to the land connections it will build through railroads, and the “road” refers to a sea-route of trade.
Essentially, China is building a new Silk Road, and 71 countries are already part of the project, including Russia and New Zealand.
What markets and UK businesses could, potentially, fare well with Chinese consumers for the Belt and Road Initiative? According the Telegraph, top British exports the Chinese enjoy are:
• British cars
• Burberry, and other designer labels
• Scotch whisky
• Scottish salmon
Many might assume only big brands have a chance in China, but with the right product, and the right approach, businesses can do very well opening up to the Chinese market.
Firms need to plan for the eventual shake-up to the UK’s ties with the European market once Brexit comes into play, and time is running out to start.
Window of opportunity
This small window of golden opportunity has been highlighted by Rebecca De Cicco in regards to the UK’s construction industry in particular.
The director of Digital Node outlined how 70% of buildings over 200 metres tall completed in 2017 were built in China, and so the country is increasingly interested in building information management software and crowd simulation.
The use of British construction software has already proved its value to the Chinese construction sector in the Beijing Daxing International.
Projected to see 45 million passengers a year, the airport’s construction has benefited from crowd simulation software provided by UK structure analysis software experts, Oasys.
The software alerted the construction company and designers to any potential bottlenecks, congestion problems, or other inefficiencies.
After years of headlines, Brexit is coming closer to reality. Will it be a great opportunity for businesses, as some predict?