Insider Media Limited

Mike Loftus looks at the potential for trading in China’s newest cities and asks why more of us aren’t knocking on their door.

To begin with some biggish numbers. UK-China exports are currently worth some €9bn. When David Cameron took a high powered business delegation to China last year he set a goal of doubling trade with China by 2015.

In contrast, German exports to China are about £32bn and China was reported to have become Germany’s biggest trade partner ahead of the United States in the course of 2010.

There are of course a raft of reasons why the recovery of the German economy from the financial crisis has been rather more inspiring than that in the UK so far - but one of these has to be the fact that the world’s fastest growing economy has a healthy and expanding appetite for the quality and range of products that German manufacturers succeed in putting in front of prospective buyers in China. So what should the Midlands be doing about that?

Let’s turn from the dry statistics to something of the specifics of the opportunity. The new city of Zhuhai lies just across the bay from Hong Kong - and there can surely be no more congenial leaping-off point for UK interest in China than Hong Kong.

Zhuhai is one of the special economic zones created some 30 years ago to stimulate a new approach to the national economy and anticipating the return to China of the old colonial outposts of Hong Kong itself and Macau (which has a walk-across border with Zhuhai).

Zhuhai has grown from a town of 13,000 to a city of 1.5 million in the last decade or so. This is rapid by any standards and the city’s population will in due course exceed five million. However, growth has been ess frenzied that in Shenzhen which has a land border with Hong Kong - possibly because Zhuhai was and continues to be a significant tourism destination.

But Zhuhai’s closeness to the pressure cookers of Hong Kong and Shenzhen is hugely valued and by 2016 a 59 km direct connection of bridges and tunnels will hugely reinforce these linkages and opportunity. Software development and mainstream manufacturing are already well rooted in Zhuhai but to accommodate the next wave of development some 10 sq km has already been reclaimed from the sea. However though the Zhuhai marketing team tell me they are pressed with interest from across the globe in the opportunity they present, they also report that interest from the UK is very subdued.

Which is strange, particularly as China seem to me - even in the three years since I was last there myself - a more open and welcoming place. For those younger Chinese who have a second language it will almost inevitably be English and there is almost a sense that China’s success and achievement in the last decade or so has produced an even greater willingness to absorb experience and know-how from overseas - the experience of SMTC at Longbridge is a compelling example of this.

There does sometimes seem a perception from the Chinese that prospective UK investment partners are reluctant to match them in the scale of ambition that they bring to the table which may frustrate the brand new entrepreneurial drive coming out of China.

For, make no mistake, there is a hunger to do business in China and our most entrepreneurial players are already fully engaged - economic recovery locally and nationally requires that more of us reach out and grasp the opportunity that is only too evident.

They are expecting you in Zhuhai - just tell them I sent you!

Mike Loftus runs the consultancy firm News from the Future