Bernard Ginns: Business should adapt to doing things the Chinese way

I'll explain why. On one side of the debate, commentators argue forcefully that we should be frightened. Its rise as an economic and military powerhouse poses a threat to the West, they argue.

They point out that China is maintaining an artificially low currency rate to give its manufacturers an unfair advantage over rivals. Some commentators fear this could lead to trade wars and rampant protectionism, tipping the global economy back into recession.

On top of all this, the country has an appalling record on human rights, locking up anyone who dares to speak out against it, say critics. We should be afraid, they say, with very good reason.

On the other side is a much more conciliatory, constructive and pragmatic voice. It is one that I hope wins out.

Let's be frank here. Yorkshire companies face what is likely to be a long, hard struggle over the next few years as the UK economy goes through a necessary but inevitably painful process of rebalancing itself.

Hundreds of millions of pounds are going to be sucked out of the regional economy during the term of this Parliament, hitting some parts of Yorkshire especially hard, particularly those that rely on the public purse as the prime funder of employment.

The coalition Government is taking a gamble on the private sector stepping in to fill the void. This means that a lot is riding on the ability of Yorkshire companies to expand and create jobs.

That's a difficult ask in an anaemic environment. So instead of grinding out business on these shores, the argument goes that regional businesses should be looking for opportunities in the surging Chinese economy.

Yesterday, Prime minister David Cameron set off on a "vitally important" trade mission with senior ministers and business leaders to promote a stronger relationship with the world's second biggest economy, which last year grew by 8.5 per cent.

Business minister Vince Cable said: "Domestic consumption in China is growing, the middle class is expanding and Chinese companies are looking to internationalise."

According to Giles Blackburne, a Leeds-based director at the China-Britain Business Council, there are opportunities for Yorkshire companies in luxury brands, niche technology, financial and legal services and the education and training sectors.

He said: "China is still a 'difficult market' which requires persistence and patience, especially for SMEs. Hence research is essential to find the right niche and location. Issues such as cultural differences and IPR protection still rank high in the concerns of UK companies.

"People often talk about developing the right relationships in China. This is really important, but must be done strategically to get a positive return on relationship. Otherwise lots of time and energy can come to nothing.

"China's regional cities outside of Beijing and Shanghai are showing huge growth and should be figuring in the thoughts of Yorkshire companies. Getting it right, though can still bring win-win rewards."

The CBBC has seen a fall in the volume of enquiries about doing business in China since the recession, but the nature of those enquiries has become more substantive.

Yorkshire businesses are becoming more serious about doing business in China, in other words. Unsurprisingly for a man whose job it is to promote relations between the two countries, he does not believe we should fear the Chinese or their motives.

"They are much more interested in cooperation and partnership as opposed to shifts of power," he said.

The UK must state its position on human rights, but accept that engagement is the best way to make progress, he added.

A FEW years ago, virtually every story about the Leeds property market contained reference to the idea that the city had a surplus of city centre flats.

This is no longer the case, according to property developer Tom Bloxham MBE, chairman of Urban Splash, who was in the city last week to visit his Saxton residential development. He told me: "There's a myth that there's an oversupply of flats in Leeds. Our experience is huge demand and lack of supply of good quality rental properties in Leeds."

Mr Bloxham added: "Supply coming through is virtually zero. Even if someone decided to do something today, it would take three or four years before it comes to market. For the next few years, we are going to see a shortage of supply of quality apartments."

Just the right conditions for another bubble in a few years?