Five reasons to trade in Asia now7th Nov '17
The time is right for UK firms to look east, according to entrepreneur and author Margaret Manning. From infrastructure initiatives to a seemingly insatiable appetite for luxury British brands, there are exciting opportunities across all sectors
Asian markets are increasingly important to Britain's long-term prosperity outside the EU. Since the Brexit vote, enthusiasm for the UK has grown across the region – and the time for UK SMEs to trade is now. Though in recent years, things might not have seemed so rosy, China remains the world’s largest economy in terms of purchasing power and the UK is its second-largest European investor. The UK’s exports to developing countries in Asia were worth £41bn in 2015. According to Barclays UK Trade Outlook 2016-2026, the value of trade to China is expected to expand by 115 per cent over the decade in question.
These are turbulent times to trade in and it’s crucial that the UK makes the most of its well-developed sectors. Worth remembering is that the UK is still a hugely attractive trading partner for Asia.
Vietnam is shifting from a controlled economy to a market economy and emerging on to the world marketplace. It’s forecast to be one of the top 10 fastest-growing economies in the coming decades and has a growing appetite for consumer goods. Singapore’s government is actively encouraging fintech, which is leading to an influx of banks and financial firms.
The Chinese government is moving away from growth towards consumption. This presents a huge opportunity for UK companies focused on innovation and higher-end consumer goods.
China is determined to upgrade its industries, particularly in textile dying, paper, food production and processing and pharmaceuticals production. To do this the country needs the kind of high-quality tech solutions that we’re so good at producing in the UK.
Made in China: 2025, China’s manufacturing sector blueprint, has attracted criticism for its focus on promoting home-grown products, but the government has emphasised its plans to improve the skills of its manufacturing labour force, which many have argued is better than complete automation. The blueprint means there are still lots of opportunities for UK SMEs to sell to and work with Chinese companies.
ASEAN countries’ expertise in labour-intensive manufacture across various mass-produced and low- to medium-tech markets makes them ideal as partners in GVCs (global value chains) with UK high-end and luxury businesses. This gives rise to further opportunities in the energy and logistics infrastructure necessary for the latter’s support.
Vietnam has an ambitious programme of major infrastructure developments including new urban railway networks, a new international hub airport and the expansion of regional airports
The Belt and Road Initiative, China’s plan to build infrastructure joining the country to Central Asia and Africa by land and sea, has seen around $900bn of earmarked investment. These plans present huge opportunities for collaboration between the UK and China.
Future demand for technology means developing ASEAN countries need high-quality solutions. At these we excel. Furthermore, an increased rate of non-communicable diseases, ageing populations and natural disasters are things the UK’s rising healthcare SMEs are ideally placed to assist with. Clearly, start-ups in personalised medicine, tele-health, automatic prescription and electronic records could all benefit.
Barclays UK Trade Outlook 2016-2026 suggests that the UK’s fastest-growing export categories over the next decade will be business management and consulting, insurance and pensions and education, with, respectively, 98 per cent, 96 per cent and 95 per cent growth forecast between 2016 and 2026.
The British brand is still very strong in Asia and is seen as a mark of quality to a populace increasingly keen on transparency and solid legacies. Moreover, Asian consumers have boundless energy for new consumer experiences and content and are keen to share this passion on social media. Now is the time to strike out.
These countries, where English is a commonly-spoken language, have rapidly growing economies, are investing in infrastructure and a knowledge economy and are looking to the outside world for assistance. Now is the time to invest.