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Small biz looks to China for chances

By Cecily Liu in London | China Daily | Updated: 2017-09-19 08:24

Small and medium-sized companies in the United Kingdom are increasingly looking to China for growth amid uncertainties over the UK's decision to leave the European Union, according to a new survey.

Some 36 percent of small and medium-sized enterprises said the Brexit debate has made the prospect of trading with Hong Kong and the Chinese mainland more attractive.

The survey also found that of the 1,000 small companies questioned, 45 percent said they see Hong Kong as a gateway into the Chinese mainland and other Asian countries.

The biggest opportunities that UK businesses recognize for launching into the Chinese mainland are its huge consumer base (42 percent), followed by its growing middle class (35 percent) and ability to be early adopters of technology (27 percent).

Perceived difficulties include the language barrier (57 percent), as well as the judicial and regulatory challenges (both 41 percent).

The data point to opportunities for trade growth, especially when just 16 percent currently have business with Hong Kong or the Chinese mainland. A further 26 percent of respondents said they are considering it.

The survey was commissioned by the Hong Kong Trade Development Council, ahead of a conference-titled Think Asia, Think Hong Kong-it is hosting in London on Thursday to foster closer business links between the Chinese special administrative region and the UK.

William Chui, the council's regional director of Europe, said Brexit provides a good opportunity for Hong Kong to attract more British businesses, which are now increasingly looking beyond Europe for growth.

"It's great to see that UK SMEs are identifying the benefits of launching into Hong Kong as part of their global growth strategy at this time of European uncertainty," Chui said. "They are valuing Hong Kong as a hugely well-positioned launch pad for businesses wanting to 'crack' the lucrative but challenging Chinese mainland market."

The UK is Hong Kong's second-largest trading partner in Europe, with its investment worth 25 billion pounds ($34 billion) at the end of 2015, a 115-percent increase over five years.

The Hong Kong Maritime & Port Board and Maritime London signed an agreement this month to unite shipping sector companies to better serve the anticipated trade volumes between China and the UK, and among other economies related to the China-proposed Belt and Road Initiative.

"We hope to further grow Hong Kong into a hub for British companies to access the Chinese mainland and other Asian markets," Chui said.

Despite interest by SMEs to expand their China market engagement, they are still facing challenges, said Olive Hou, founder of the London-based consultancy Olive's Choice Creative.

Hou said these include limited budgets, concerns over intellectual property protection in China, and a lack of knowledge about how to localize products for the Chinese market.

She said the increasing availability of China-related market data and information in London should help SMEs address some of their concerns.

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