China - Visit by Lord Green and Nick Baird to Shanghai - December 2011

British Consulate General Shanghai

Summary

Lord Green visit to Shanghai develops trade and inward investment opportunities across a range of sectors. Key areas for follow-up in healthcare, innovative SMEs, regional city and provincial outreach and pursuit of High Value Opportunities.

Detail

Following his visit to Beijing, Lord Green visited Shanghai from 30 Nov-2 Dec, with Nick Baird, Chief Executive of UKTI.  In a one-day programme he covered the full range of goods and services sectors,  promoted inward investment  and engaged with the Chinese business media and with British business leaders on the UK economy and measures to support business. 

A roundtable with Shanghai British Chamber members provided Lord Green with a measure of the opportunities and the challenges for UK business in the eastern China market.    

One particular area discussed was the opportunity to be derived from 100,000 Chinese students in the UK and another 10,000 studying UK courses in China. It  was proposed that a more structured framework be established to help British companies tap into this resource through, for example, internships. This could include a method for UK SME’s to access this pool of Chinese students in the UK to support their business development in the Chinese market. Nick Baird agreed to take this back to London and the China network will also look to develop ideas to support it. 

A call on Vice Mayor of Shanghai, Shen Xiaoming focussed on the healthcare sector,  in which Shen recognised the UK as a world leader from which China and Shanghai had much to learn. Lord Green said the UK could do more to promote its expertise in healthcare and that there was a range of opportunities for greater bilateral engagement.

Lord Green promoted the International Trade Centre being developed by Peel Holdings in (Shanghai’s sister city) Liverpool and sought Shanghai’s support in promoting the project to Chinese companies looking to set up overseas.  Shen offered ‘full Shanghai government support ‘.

Lord Green also briefed Shen on the Shanghai Urban Regeneration Foundation (SURF)  founded by British architects and developers to turn disused docklands into a British Creative Industries Hub. Shen welcomed this project and agreed to raise it with the Mayor of Pudong

At the Johnnie Walker House, Lord Green received a briefing on China’s  booming alcoholic beverage market, including the market access and regulatory challenges.

A speech to senior alumni and key contacts of the London Business School  ( Lord Green is a former Governor)  was followed by a call on  the Jushi Group, the world’s largest producer of fibreglass.  Lord Green flagged up the benefits of  the UK as a location for Jushi’s European HQ and manufacturing facility. 

Hua Jianhui, Vice-Governor of Anhui Province, led a sizeable delegation of officials  to Shanghai to brief  Lord Green  on a Chinese central-government backed  scheme to draw  investment  to Anhui from China’s coastal regions and from overseas.   Anhui’s two-way trade with the UK was worth US$390 million in  2010 but has already hit US$430 million up to November this year.  There are so far nearly 100 British investments in the province, worth around US$320 million.  Hua said  the province’s position on the edge of the Yangtze River Delta, pool of educated and relatively cheap labour, research capability,  rapidly improving transport infrastructure links and its plans to develop key emerging industries are all potentially  of interest to British companies. 

Lord Green agreed with this and said that Unilever’s lead (in moving to Anhui from Shanghai)  was a strong pointer for smaller British companies that might look at it as a source of commercial opportunities and an investment location.  He said  that a  proposed ‘British-Chinese Innovation Cooperation Park’, in which a British venture capital company, Spark Ventures,  aims to bring innovative British start-ups to Anhui to incubate and commercialise their technologies, could form the basis of a wider partnership between the UK and Anhui. He proposed that a framework for this partnership (e.g. an MoU) could be included in a future UK VIP visit, ideally early in 2012.

Lord Green met financial and infrastructure related companies to discuss the emerging challenges in China, particularly financing of large projects. The group highlighted the significant decline in major projects since the end of China’s 4 trillion RMB fiscal stimulus package. Major infrastructure projects needed as China grows, are underfunded, with local governments facing unsustainable debt levels and financial constraints. The group discussed unlocking high-value opportunities through project finance, and how China’s need for sustainable infrastructure finance could create more opportunities for UK companies. They agreed to consider in more detail the possibility of launching a PPP pilot in China, and collaborating with a city/province to provide local government with financial services expertise focused on a number of different high-value projects.

Lord Green used an interview with a leading Chinese business TV channel and newspaper to deliver key messages on the Eurozone crisis and its impact on the UK, UK initiatives to stimulate growth and the commercial opportunities of the 2012 Olympics.

He rounded off an intensive day with a speech to members of all four British business support bodies in China; UKTI, the four British Chamber chapters, the China-Britain Business Council and the Confederation of British Industry. This event also formed the soft-launch of the 2012 British Business Awards (BBA) , set for November in Shanghai. Lord Green spoke of the value of schemes such as the BBA in celebrating and publicising the success of British companies in China.

Comment

The fact that Lord Green is no stranger to Shanghai allowed for an intensive and highly productive first visit as Minister. 

The Anhui Province leaders will be eager to take forward the proposed UK industry park. Anhui is well  behind Zhejiang and Jiangsu in terms of its economic and industrial development and the scale of its links with the UK, but the potential is there and the ambitions, backed by the Chinese central government, are strong.

Disclaimer

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