China Direct

CBI Sterling Assets Report on China Roadshow

 

  

The inaugural Sterling Assets Report has been on a pan-China Roadshow since its launch on Thursday 02 November in Beijing.

The objective of the Roadshow was to circulate the Report's key findings to the diverse and dynamic UK business network in China and encourage policymakers and local officials to use the Report to promote greater UK-China business investment. 

Additionally the Report was received by business stakeholders the CBBC, British Chambers, Department of International Trade (DIT) and a visiting delegation of the All Party Parliamentary China Group in Guangzhou.

China Direct would like to sincerely thank HM Consuls Cecile Elbeleidi in Chongqing, HM Consul Karen Maddocks in Guangzhou, HM Consul John Edwards in Shanghai and HM Consul Nick Whittingham in Wuhan for their support.

 

    

Please note that China Direct will have the Chinese language version of the Report available for review and download by mid-November.

Kindly find the original Report and Executive Summary attached below for your reference.

Download CBI China Sterling Assets Report

Download Sterling Assets China Executive Summary

Thank you. 

  

UK Ahead Of The Curve In China Investment Strategy - CBI

 

EMBARGOED: 00:01 Hours, Thursday 02 November, 2017UK AHEAD OF THE CURVE IN CHINA INVESTMENT STRATEGY – CBI

UK is China’s second largest European trading partner  

The UK is shifting its investment into inner regions of China and into new sectors, ahead of the curve of other nations, according to the CBI’s first ever Sterling Assets China report.

Download CBI China Sterling Assets Report

In 2016, the UK was China’s second largest trading partner in the European Union (behind only Germany) and the eighth worldwide, doing £55 billion worth of trade in goods with China. Indeed, after the USA and Germany it is the only country in the list of China’s top nine trading partners not in the Asia Pacific region.

The UK also ranks eighth in terms of foreign direct investment (FDI) into China over the last decade, at £4 billion. However, unlike other nations, Great Britain is shifting its focus from coastal to inland provinces, which have historically received a smaller share of FDI, so as to mirror the Chinese government’s Belt and Road development plans. Over half (57%) of British investment in 2015 (over £880 million) went to inland regions, led by Heilongjiang (£313 million) in the north east and Henan (£276 million) in the centre.

Of the £18.1 billion worth of UK exports to China in 2015, Shanghai tops the list (£4.2 billion), followed by Beijing (£2.4 billion) and Guangdong (£1.3 billion). 21% of British exports to China were in transport technology (automotive, rail, air and maritime), 12% in machinery & electrical, 8% in chemical products and 5% in metals. The UK’s top service export was travel (£1.5 billion), with 270,000 Chinese visiting the UK and 91,000 Chinese students enrolling in British universities – far more than from any other country.

Guy Dru Drury MBE, CBI Head of China, said:

“The Sino-British relationship is a great success story. As we delve deeper into the Golden Era of ties between China and the United Kingdom, we have so much to offer each other, and British business is keen to play its part.

“From cars to chemicals, and services to schools, British organisations – especially many smaller companies – are tapping into a growing market in China, one that plays to the UK’s best competitive strengths. With the consumer market worth over £3.3 trillion, instantly recognisable British products are a particularly strong match for a growing generation of affluent Chinese. Moreover, this relationship creates thousands of jobs in the UK and China, raising living standards and boosting productivity.

“As the UK forges a new global trading future, it is well ahead of the curve in making the most of its relationship with the world’s fastest growing economy. By making inroads into China’s lesser economically known regions, the UK stands to profit from China’s move from manufacturing and infrastructure into technology and services.”

Dame Barbara Woodward DCMG OBE, Her Majesty’s Ambassador to the People’s Republic of China, said:

“Supporting UK-based companies to invest and operate overseas and become global businesses is part of our strategy to expand mutually beneficial trading relationships around the world. This is especially so in China, the world’s second largest and fastest growing economy.

“This report showcases a wide range of British investment and highlights the strengths and growing confidence of British companies. Investment in China by British companies can generate wealth for the UK, support British jobs, help build UK-based supply chains, and support China’s own economic development.

“As we continue to address the challenges for businesses investing across the globe and help them to make the most of opportunities, positive and proactive engagement of UK and Chinese businesses remains vitally important.”

Between 2015 and 2016, greenfield project investment into China exceeded £2.25 billion. The financial services sector saw the highest value investments (£488 million), followed by logistics (£292 million), consumer products (£268 million) and business services (£209 million).

02 November 2017

Notes to Editors:

Across the UK, the CBI speaks on behalf of 190,000 businesses of all sizes and sectors. The CBI’s corporate members together employ nearly 7 million people, about one third of private sector-employees. With offices in the UK as well as representation in Brussels, Washington, Beijing and Delhi, the CBI communicates the British business voice around the world.

The CBI 2017 Annual Conference will take place on Monday 6th November at the NEW LOCATION of the InterContinental London – The 02 hotel. Media can now register here (clicking on the “Media” box, entering the code 7286). Please note that journalists will be asked to upload a photo as part of the registration process. The closing date for applications is Thursday 02 November.

Follow the CBI (@CBItweets) on Twitter and on the day of annual conference using the hashtag #CBI2017.

Media Contact:

CBI Press Office is available 24 hours a day on 0207 395 8239, or email: press.office@cbi.org.uk. Follow the CBI (@CBItweets) and CBI China (@CBIBEIJING) on Twitter.

2017/2018 EUCCC Position Paper: 'Action Not Words'

 

European Business in China Position Paper 2017/2018 Executive Summary

 

Background:

During his January 2017 speech at the World Economic Forum in Davos, Switzerland, President Xi Jinping presented China as strongly committed to economic globalisation. President Xi also stated that China would expand market access for foreign investors and level the playing field to make China’s market more transparent and better regulated.

Later that month, the State Council released the Notice on Several Measures on Promoting Further Openness and Active Utilisation of Foreign Investment (Guofa [2017] No. 5, State Council Document No. 5 or Circular 5).  European business recognises the level and significance of these public commitments.

 Policy Goals:

In particular, the European Chamber attaches great importance to State Council Document No. 5, and sees it as the overarching principle that will guide foreign investment reform for the short to medium term. In it, 20 broad policy goals are categorised under three key themes:

1. Take further steps to open up to the outside world.
2. Further create an environment of fair competition.
3. Further strengthen efforts to attract foreign investment.

 Actions not just Words:

It is only natural that China advocates this view of globalisation, having benefited so much from it since its WTO accession in 2001.

However, while European business fully embraces the basic framework of State Council Document No. 5, it is suffering from accumulated ‘promise fatigue’, having witnessed a litany of assurances over recent years that never quite materialised.

By supplanting words with concrete actions and providing reciprocal access to its market for both trade and investment, China can send a strong signal that they are following through on their commitments to further open up to the world and establish a level playing field. This would also help to drive forward the economic reform agenda announced at the Third Plenum in 2013.

While there have been a number of highly positive developments clearly indicating that China’s leadership understands the task at hand, the Position Paper 2017/2018 shows many areas where more can be done, and provides constructive recommendations to the relevant authorities in order to help them achieve their objectives.

 Take further steps to open up to the outside world

In terms of its openness to foreign direct investment, the Organisation for Economic Cooperation and Development (OECD) ranks China in 59th place out of the 62 countries evaluated. There are reasons to be hopeful, however.

For example, significant improvements have been seen over the past year in the pharmaceutical industry, with authorities streamlining regulations and improving accessibility. As with the anticorruption drive, European business fully acknowledges the real progress China can make when there is consensus for reform.

This positive and forward-looking approach should now be applied to other industries that are potentially facing market closure.

For example, in the agriculture, food and beverage industry, shipments of food products, including some low risk ones, will require an official inspection certificate from a foreign government as of 1st October, 2017. Since the certification requirements for low-risk food products are out of line with international practice, this has the potential to dramatically reduce food imports.

Further create an environment of fair competition

The overall sentiment of ‘fair competition’ aligns perfectly with one of the European Chamber’s core advocacy points: achieving a level playing field for all businesses in China. However, there is a great deal that still needs to be done in this respect.

For example, in some areas foreign-invested enterprises (FIEs) are still only permitted to play a limited role in setting standards, or are barred altogether, and 54 per cent of European companies perceive they are treated less favourably compared to their Chinese counterparts.

China could go some way towards rectifying this situation by broadly adopting a more open and even-handed approach to communicating regulations, as displayed by the State Administration of Foreign Exchange (SAFE) in 2017. The SAFE met directly with European business to solicit feedback regarding the impact of tightened capital controls.

 

Further strengthen efforts to attract foreign investment

There is a right and a wrong way to attract foreign investment. European businesses make investments when capacities need to be established or expanded in response to market demand, not because an investment zone offering short-term financial incentives has been set up.

Companies are far more interested in the basics of predictability, transparency and the rule of law. Likewise, talented individuals are more interested in the soft environment, where air quality, access to schools and medical facilities, and a convenient transportation infrastructure meet their and their family’s needs.

Therefore the best approach is to embark upon a programme of deep economic, people-centred reforms that will enable sustainable growth – once this has been undertaken, more investment should follow.

If greater market access were granted, 56 per cent of respondents to the European Chamber’s Business would be more likely to increase their investments.

But the Chinese authorities continue to ring-fence foreign investment with administrative measures, including the 2017 Foreign Investment Catalogue and the 2017 Free Trade Zone Negative List, while progress on the EU-China Comprehensive Agreement on Investment is left waiting in the wings.

When weighed against the ‘tone at the top’ it is not clear why special rules and catalogues governing foreign investment are still being maintained at all, as they only serve to complicate China’s business environment and deter foreign investment.

It would be preferable instead to amend China’s Company Law so it applies equally to domestic enterprises and FIEs, and to establish a concise national negative list. 

Conclusion

European business needs China to succeed and is prepared to expand operations in the country. However, investment plans must be based on certainty.

The European Chamber will therefore continue to monitor the implementation of State Council Document No. 5 and related legislation, providing constructive feedback and cooperating with the Chinese authorities as they strive to establish China as an exemplar of economic globalisation.

To download the Paper please click here and follow to the link.

EU Leaders Turn to China After Trump Visit Clouds U.S. Relations

China Direct would like to thank CBI member Bloomberg and Peter Martin pmartin138@bloomberg.net at their Beijing Bureau for sharing this note on EU-China relations.

'Even as Trump hammers away at Transatlantic solidarity, the EU and China can't hide their differences.

The EU-China Summit is opening today in Brussels and - unlike last year - will likely produce a nice-sounding joint statement and perhaps even some real solidarity on climate change. 

But, beneath the surface, European officials share many of the same frustrations with China's trade and investment regime as the Trump administration, even if they don't express themselves with equal bluster. 

The trajectory seems likely to be toward the kind of world that McMaster and Cohn described in their op-ed on Trumpian foreign policy this week: "an arena where nations, non-governmental actors and businesses engage and compete for advantage..."

Full article below:

Download EU Leaders Turn to China After Trump Visit

 

China's top diplomat to visit Britain 19-21 Dec

 

China's top diplomat will visit Britain this week for regular talks and a meeting with Prime Minister Theresa May, China's Foreign Ministry said on Monday, amid uncertainty about the process of Britain leaving the European Union.

Britain has been a popular choice for Chinese investment, with many firms seeing it as a springboard for the far larger European Union market. But those plans could be at risk with the concerns surrounding what kind of market access Britain will get in future, given its vote in June to leave the EU.

State Councillor Yang Jiechi, who outranks the foreign minister, will be in Britain from Monday to Wednesday for a regular dialogue on strategic issues, ministry spokeswoman Hua Chunying told a daily news briefing.

He will also meet British Foreign Secretary Boris Johnson, and talk about a range of issues, not just Sino-British ties, Hua said, adding she could not predict whether Brexit would directly come up. "But China's position on this is very clear. Brexit is an issue for Britain and the EU. We hope that they can appropriately handle the issue via talks and consultation," Hua said. "For China, we believe that Britain is a great country with important international influence. We hope to work hard with Britain to further promote the development of relations."

Diplomatic sources say China has been seeking clarity from Britain about its Brexit plans, nervous about what it means for Chinese companies in particular.

May has said she will trigger Article 50 of the Lisbon Treaty, the formal process of leaving the EU, by the end of March to start two-year exit talks. However, her plans for those negotiations have been shrouded in secrecy and businesses and investors fear Britain might seek a "hard Brexit", where controlling immigration takes priority over access to the European single market.

Please find the article here.

European Chamber releases 2016 China Business Confidence Survey

The European Chamber, in cooperation with Roland Berger, today released its annual Business Confidence Survey 2016. The survey finds that Beijing’s failure so far to deliver on promises that foreign-invested enterprises will enjoy a more open, competitive market has fostered mounting pessimism: a significant 41% of European companies are now re-evaluating their China operations and planning to cut costs, including through headcount reduction.

Although 47% also report that they plan to expand their operations in China, this represents a thirty-nine point decrease from 2013, when an overwhelming 86% of European companies were intending to do so. However, a clear majority of European business would likely increase their investment in China in the event of market access barriers being removed.

Please read the full press release here. The full download can be accessed here.

EY's UK Investment Attractiveness Survey

 

 

 

Dear Members and partners,

 

Kindly find a summary of EY's latest UK Attractiveness Survey. Headlines are below with a download link to the full report.

Our thanks to EY for kindly sharing the report.

• The UK attracted a record number of FDI projects in 2015
• Close to 90% of the UK’s FDI growth came from outside of London
• The UK remains the leading destination for FDI in Europe
• However, investors appear much less optimistic about the future attractiveness of the UK than they were 12 months ago.
• The UK must look to build on its success in the regions, embrace manufacturing and deliver the improvements in digital skills and infrastructure investors require

Download UK Attractiveness Survey 2016

 

British Ambassadors to ASEAN visit Yunnan to promote cross-border collaboration

On 07-08 March, the first ever delegation of British Ambassadors to Southeast Asian countries visited Kunming in Yunnan province to promote cross-border collaboration between the U.K., China, and its Southeast Asian neighbours.

The visit was organised by the British Consulate-General in Chongqing. Invited by Tina Redshaw, British Consul-General in Chongqing, British Ambassadors and senior diplomats from Burma, Cambodia, Laos, Thailand, and Vietnam, with Philip Malone, Deputy Director of the Southeast Asia Department of the Foreign and Commonwealth Office (FCO) in London, visited Kunming, which plays a strategic role in China’s One Belt, One Road initiative.

The delegation’s aim was to understand how Yunnan’s government is positioning the province as a gateway to Southeast Asia and to explore the prospect of deepening U.K.-Yunnan-Southeast Asia economic and trade co-operation.

In Kunming, the delegation held a roundtable with Yunnan government authorities to understand Yunnan’s development and its engagement with Southeast Asia and its history of cross-border collaboration. They also met business representatives in Kunming to understand their investment plans in Southeast Asia, the challenges and opportunities they face, and how the British embassies in the region might play a bigger role in facilitating cross-border collaboration.

The delegation also visited Shilin Experimental Solar Power Plant to learn about the state of renewable energy development in Yunnan and its collaboration with Southeast Asia in this sector.

Together with partners in Southwest China, the Consulate General in Chongqing is keen to deepen relationships as part of the “golden era” of China and U.K. relations following Chinese President Xi Jinping’s state visit last year.

The latest symbol of that is a friendship partnership agreement signed in February between Kunming and Liverpool. The cities will forge closer collaboration in healthcare, life sciences, green energy, and the creative industries.

Tina Redshaw, Consul-General said, “We hope to increase multilateral understanding in the region through the visit and to encourage more regional co-operation.” Please read more here.

CBI Reaction to UK Budget - March 2016

CBI FULL REACTION TO MARCH 2016 BUDGET

The CBI has responded to the Chancellor of the Exchequer’s Budget.

CBI Director-General, Carolyn Fairbairn, said:

“After a year of surprises, this was a stable Budget for business facing global stormy waters.  The Chancellor has listened to our concerns about the mounting burden on firms and chosen to back business to grow the economy out of the deficit.

“Businesses will welcome the Chancellor’s permanent reforms to business rates – taking more small firms out of the regime and changing the uprating mechanism from RPI to CPI, which the CBI has long been calling for.

“The reduction in the headline Corporation Tax rate sends out a strong signal that the UK is open for global business investment, and reforms to Interest Deductibility are rightly in line with international consensus.

“Changes to the tax treatment of losses will make it harder for larger scale-up firms and companies that have been through tough times to play their part in the recovery. 

“Progress on some key infrastructure projects, from HS3 to 5G, are positive.  Investors and companies will be encouraged by the greater clarity and simplification of the Government’s energy policy.”

On infrastructure

“It’s good to see Government preparing the way for the next generation of major UK infrastructure upgrades. Preparation is essential for these projects so that once we take the decision to build we are able to avoid any delays.

“With the digital revolution in full swing, mobile connectivity is one of its key drivers. The decision to follow the advice of CBI members by prioritising 5G on the agenda of the National Infrastructure Commission is a welcome step in fulfilling the UK’s digital ambitions.”

On regional growth

“Devolution is continuing apace in both rural and urban areas, with positive new announcements from East Anglia to the West of England.  As a key player in the Northern Powerhouse, much of Yorkshire remains notably absent from these deals.

“It will be important for both central and local Government to focus on creating economic growth.  Success will rely on a new era of co-operation between Ministers, local leaders and firms of all sizes and sectors.”  

On business rates

“In addition to small firms being taken out of the regime and changes to the uprating mechanism, all companies will welcome more frequent revaluations, which the CBI has long been calling for.”

On support for growing businesses

“The Budget included a number of useful measures to encourage entrepreneurship and growth, particularly cuts to capital gains tax and the extension of Entrepreneurs’ Relief.  New allowances for micro-entrepreneurs will encourage participation in the sharing economy and encourage the growth of new and innovative platforms.”

On energy policy

“The CBI called for the regulatory landscape for business energy efficiency to be simplified.  So this is a positive step, focusing efforts on investment and not compliance.

“Extending the current level of the Carbon Price Support in the short term is sensible, as is the commitment to clarify long-term plans for this tax later this year.

“Support for the oil and gas industry is positive – helping key UK employers facing very challenging operating conditions.”

On sugar tax

“Businesses recognise that more needs to be done to tackle childhood obesity.  This new ‘sugar tax’ will require proper consultation on how it will work and companies will want assurances that this approach doesn’t represent the thin edge of the wedge. 

“Building on the steps they are already taking to reduce sugar in their products, the industry will continue to engage with the Government on effective strategies to address this issue.”

On productivity

“Companies will be surprised to see no further measures to support innovation and R&D in this Budget.  Manufacturers in particular will be looking for further details in the Government’s upcoming National Innovation Plan.”

On pensions

“Providing high quality saving for retirement requires support from companies.  The Chancellor was right to heed CBI advice and step back from damaging changes to the pensions tax system, and to extend the support available to firms who choose to offer financial advice to their staff.”

On education

“Improving education is the most effective way to raise living standards and businesses will welcome the move to ensure Maths is taught up to the age of 18.

“Freeing up schools to innovate is a move in the right direction, but changes to structures alone will not deliver better outcomes for pupils and schools.

“Extra investment for apprenticeships will only help the small minority for firms who will be able to spend their whole levy. Businesses remain concerned that only a year away from the introduction of the levy, there is little clarity about how the system will work.”

16 March 2016

Notes to Editors

Across the UK, the CBI speaks on behalf of 190,000 businesses of all sizes and sectors. The CBI’s corporate members together employ nearly 7 million people, about one third of private sector-employees. With offices in the UK as well as representation in Brussels, Washington, Beijing and Delhi, the CBI communicates the British business voice around the world.

Visit the Great Business Debate website - a CBI led campaign to help build public confidence in business.

Media Contact:

CBI Press Office is available 24 hours a day on 0207 395 8239, or email: press.office@cbi.org.uk. Follow the CBI (@CBItweets) on Twitter.

Bianca D'Orsi Corporate communications adviser CBI ______________________________________________________

D: +44 (0)20 7395 8247 | M: +44 (0)7469 155 328 CBI | Cannon Place | 78 Cannon Street | London | EC4N 6HN www.cbi.org.uk

 

City of London welcomes appointment of Sir Danny Alexander as Vice President of AIIB

 

CBI member The City of London Corporation welcomed the appointment of Sir Danny Alexander as a vice-president at the Asian Infrastructure Investment Bank.

Mark Boleat, Policy Chairman for the City of London Corporation, said, “Sir Danny Alexander’s appointment as a vice-president at the Asian Infrastructure Investment Bank (AIIB) is a welcome announcement.

The experience he will bring to the table as the former Chief Secretary to the U.K. Treasury will be a real asset for the bank, and the City of London looks forward to supporting him in confirming the U.K.’s role as a key member of the institution.

The U.K. fully recognises the strategic importance of the AIIB, which is why we were the first major western country to back its creation last year.

The City of London matches that view and strongly endorses the AIIB as we believe the U.K.’s involvement can help to unlock enormous financial sector opportunities across Asia for British firms.”

Please read more here.