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Opinion: How to trade with China post-Brexit

Dr. Johnny Hon_Sketchfeature

Following Britain’s landmark decision to exit the EU, it has never been more important for the UK’s small businesses to focus on building trade with strong and emerging international economies. 

With uncertainty prevailing over the exact shape of the future trade relationship between the UK and EU, the lower valuation of the pound makes UK small firms increasingly attractive to Chinese companies looking to do business with developed economies. British entrepreneurs ought to take advantage of this to build long-term trade relationships with China.

UK businesses involved in ecommerce are particularly well placed to trade with China post-Brexit. China’s ecommerce sector is booming, with its consumers purchasing 3.877 trillion yuan ($589.61 billion) worth of goods online in 2015. With a weaker pound, British goods for sale online are immediately cheaper and better value for Chinese consumers, who are extremely conscious of both price and quality. To maximise this opportunity, British firms should strengthen their brand in China and up their marketing game. 

I would suggest that UK small firms make use of cost-effective and targeted online social media advertising, using channels that can reach hundreds of millions of people in China. This will serve to raise brand awareness. If consumer-facing UK small firms are not yet selling online, now is the time to do so if they wish to make the most of a cheaper pound.

Equally, small media companies, especially those in entertainment and technology, are extremely well placed to benefit from Chinese investment or to forge potential joint ventures in the Chinese market. As China transitions to an economy focused on domestic consumption, its entertainment market is growing exponentially. 

China is set to become the largest entertainment market globally in 2017 and domestic conglomerates are constantly looking to work with or invest in UK small firms that can offer something novel to their market, whether through creative services, technology or consultancy. The acquisition of the Odeon cinema chain by China’s richest man Wang Jianlin is symptomatic of this trend and will be replicated down the value chain and throughout the industry.

As China’s Belt and Road initiative develops, new doors are also likely to open for UK small firms to partner with Chinese business in third markets. There will also be more Chinese businesspeople seeking to expand into the international markets, creating even more opportunities for Chinese investment in UK small firms. 

I recommend that UK entrepreneurs build their network now so that they can capitalise on the huge opportunities that are opening up. There are various UK networking organisations that exist to assist UK entrepreneurs and small firms to access the Chinese market and investment. 

Foremost among these groups are the China Britain Business Council (CBBC) and the 48 Group Club, who both have excellent contacts and decades of experience in this area. They can provide entrepreneurs with the knowledge and connections needed to take those first steps into trading with the Chinese market.

Despite some of what is said in the media, there will continue to be ample opportunities for British business to trade with China in the coming years. Especially following Brexit, this is particularly good news for UK entrepreneurs. 

Dr Johnny Hon is an Anglo-Chinese entrepreneur and founder of Global Group