Routes to Growth Conference 2017
Held at The Shard in London, the Routes to Growth Conference 2017 welcomed businesses from the UK for a day of networking, panel discussions and keynote speakers including Richard Graham MP, Julie Deane OBE, The Cambridge Satchel Co, William Kim, AllSaints and Will Bulter-Adams OBE, Brompton Bicycle
British companies take note: believe in your brand
Brand UK has never been stronger and that’s a big help for businesses seeking to trade in Asia
According to the Asian Development Bank, Asian economies are set to see impressive growth in the coming years. It’s not just China, with a projected a 6.2% growth and regarded by many as the powerhouse in the region, that is booming. The bank says growth for south Asia as a whole is forecast at 7% while the IMF says Asian economies generally will grow by 5.6%.
“China is only part of the picture,” Ian Tandy, Head of Global Trade and Receivables Finance, told this year’s Routes to Growth conference. “Prospects for many of the other ASEAN states are also as strong. The Philippines, Malaysia, India, Vietnam and Thailand all offer tempting opportunities for UK businesses.”
Which is the raison d'etre of the Routes to Growth programme, established by Cathay Pacific and HSBC to help small, medium-sized and emerging British businesses to create trade links with China and North and South Asian nations.
Recognise the opportunities
“There are huge opportunities for the UK’s small and mid-sized businesses looking to capitalise on the openings the region provides,” said James Ginns, Cathay Pacific’s General Manager Europe, addressing the 140 delegates from a wide range of organisations from education to manufacturing and services to those working in the support sector.
“Asia accounts for 30 per cent of the world’s GPD,” added Tandy. “And this year Asian economies will grow by 5.6 per cent, according to the IMF, with similar growth expected next year.” Compare that to the IMF’s 2018 projections for the UK (1.5 per cent) or the Eurozone (1.9 per cent) and the appeal is clear.
The Association of Southeast Asian Nations (ASEAN) operates as a collective single market for its members (Thailand, Vietnam, Indonesia, Malaysia, The Philippines, Singapore, Myanmar, Cambodia, Laos and Brunei). Crucially, it also has free-trade deals with other major nations in the region; China, India, Australia and New Zealand.
“It is the world’s freest trade bloc, with a fast-growing middle class with immense spending power,” said Tandy. “The demand they are triggering will see investment of $2 trillion for infrastructure alone in the six biggest Asian economies.”
The key message from this year’s event at the Shangri-La Hotel in London’s iconic Shard is that SMEs looking to break into Asian markets need not operate alone. It’s a complex and time-consuming process but help is at hand. “There is a vast amount of knowledge and support,” said Tandy.
There are numerous vehicles that exist to help smooth the path of access to Asia. The Department for International Trade, British chambers of commerce (with their links to Asian chambers), British Embassies, UK trade missions and trade events, the UK-ASEAN Business Council and China-Britain Business Council are all great places to begin. UK Export Finance is a body that can help with credit insurance, Invest HK works with overseas and Chinese entrepreneurs, SMEs and multinationals that wish to set up an office, or expand their existing business in Hong Kong, and the Prosperity Fund is a body that helps modernise and reform developing economies.
“If you have a product or service that could be of value in Asia, these people can provide the best form of access,” Richard Graham MP told the business owners and managers. He would know. As Chair of the All Party Parliamentary China Group and the Prime Minister’s Trade Envoy to the ASEAN Economic Community, he has professional and personal knowledge of the region going back decades.
Banks can also help, of course, with issues such as currency hedging or supply-chain finance. And regional governments play a part as Edward Burt, MD of Bridgend-based Burt’s Biscuits, explained: “We had the support of the Welsh Government, which allowed us to go to markets that we probably wouldn’t have even contemplated.”
Play the British card
When it comes to seeking out opportunities, the UK needs to play to its strengths, added Graham. “The British are incredibly good at a number of things that we don’t give ourselves credit for. We host fantastic events in the UK (such as the Olympic Games and Rugby World Cup), so wherever games happen, they want to use our experience; we have a natural ‘in’.” Next year’s Asia Games in Jakarta has a UK-built velodrome, for example. Similar opportunities will come from the 2019 Rugby World Cup in Japan.
“The intangible is our reputation; the brand of the UK. It’s never been stronger because we are reliable, we make goods of a high quality and look after our clients,” said Richard Graham. “With that, everything is possible.”
“Sell the UK,” agreed Edward Burt. A similar message came from Naylor Industries, the Barnsley-based clay and plastic pipe manufacturer. Its excursion into Brunei was helped by a pro-British local partner.
“He was UK educated, his children went to UK universities and he was thrilled to be buddying up with a British company,” said MD Edward Naylor, of his local partner. “He went the extra mile to get us established in the market.”
The British edge in China is helped enormously by Hong Kong – a British Dependent Territory for more than 150 years until 1999 when the lease agreement with China expired. That legacy gave it a simpler legal system than mainland China, a well-established global financial market and a more western way to its business practices, making to an ideal entry point into other Chinese markets.