Why the Chinese market is ripe for exploration: Invest NI Hong Kong manager
Jenny Liu of Invest NI explains why NI businesses should not be put off by any perceived problems trading with China
Northern Ireland hosted over 100 Chinese provincial and municipal leaders last week at the 2017 UK-China Regional Leaders Summit. The summit showcased the strength of Northern Irish business and innovation and will provide a springboard to explore growth in China and Hong Kong.
Many companies know about the potential of China but are still nervous about a perceived difficult business environment. With 1.4 billion people, a land mass over 38 times the size of the UK and the second largest economy in the world, China's regions are diverse, effectively operating as distinct economies at times and with specific trading opportunities.
Hong Kong has an integral role in supporting western businesses in understanding and accessing the market. Consistently ranked as the freest economy in the world, trade and finance are the cornerstone of its economy. It has a low and simple tax system, a world-class business infrastructure, and offers a level playing field for international companies. The official language of Hong Kong is English, it follows British law and, aside from being a lucrative market for international business in its own right, Hong Kong hosts more than 50 million visitors per year.
The Chinese economy continues to open up to western business. Just three weeks ago, the Chinese authorities announced that financial services firms could, for the first time, own a majority stake in a mainland joint venture. Now is also an especially exciting time as we see increased connectivity between Hong Kong, Macau and nine Southern China cities to form China's Greater Bay Area.
The Greater Bay initiative, alongside the Belt and Road initiative, recognises that commercial opportunities for the region have changed.
With the emergence of the digital and technology sectors in China and the movement of the Chinese economy up the value curve away from low-cost export manufacturing, we are seeing many of the region's cities starting to specialise. Shenzhen, for example, is developing as a high tech hub and HQ to major global players such as Tencent and Alibaba.
The advanced manufacturing, and technology and digital sectors, in particular, present trade opportunities for Northern Ireland's longstanding strength in engineering and our burgeoning tech cluster.
The leisure and entertainment sectors can also capitalise on a fast increasing middle-class with high consumer spending and demand for high quality overseas products such as food and beverages which command a premium here.
There's also a growing number of resort-style hotels catering for middle-class families, for example the upcoming rebrand of Sands Cotai Central to a London-themed resort presents trade opportunities, from design and specialist construction to supply of beef and detergents. There is already a healthy appetite for Northern Ireland goods in this region.
It is very important to do your research before engaging in this market. Knowing the opportunities available that are suitable for your business, understanding what distribution channels there are and what the regulatory and licensing requirements are is important. These factors differ across Hong Kong, Macau and China, and this is something our market research service and in-market advisors can help with.
Asia is not a quick win, it's a journey. Business partnerships need to be built on trust and relationships, this takes time and multiple trips to demonstrate a steadfast commitment to the region.
Small gestures of respect go a long way, while quick responses to queries and regular communication with potential partners here is essential.
The 11% depreciation of sterling against the US dollar has made Northern Ireland exports ever more attractive, making now a good time to explore the opportunities of China and Hong Kong.
Invest NI has the expertise, experience and local knowledge to help you succeed. If you would like to explore the opportunities, please contact its business support team on 0800 181 4422