China's flexible approach to currency means opportunity knocks for firms

Bob Manning, the head of trade and investment at the British Consulate General in the Chinese city of Guangzhou, made the comments as he visited Leeds to encourage more Yorkshire firms to form trade links with China.

China's central bank announced on Saturday that it planned to make the yuan's exchange rate more flexible. The bank also ruled out a one-off revaluation of the currency.

Some commentators have claimed that China had been keeping the value of the yuan artificially low to help boost the performance of its exporters.

Analysts said China needs to show the G20 leaders, who meet in Canada on June 26 and 27, that it is serious about its commitment to making the yuan more flexible.

Commenting on China's announcement about yuan flexibility, Mr Manning said: "For companies that have had a watching brief on China, that would have been one of the issues where they were looking for change, or keeping an eye on.

"For some companies, it will represent a green light to move forward to the next stage. For the companies who are already doing business (in China), it will enable them to think fairly quickly about how they take advantage of that."

Mr Manning and John Woodruffe, the deputy head of trade and investment at the British Consulate in Hong Kong, spoke at a seminar about trade opportunities in the Pearl River Delta, which was held in PricewaterhouseCoopers' office in Leeds.

Mr Manning said: "We'd like to communicate the scale and the diversity of opportunities available for Yorkshire companies to do business in the Pearl River Delta which includes cities that are among the most affluent in China, and also Hong Kong and Macau."

He said one of the "local heroes" that had gained a strong presence in China is Pace, the world's largest supplier of set-top boxes, which is based in Saltaire, near Bradford.

Mr Manning said: "Pace have been established in southern China for three or four years. They have established suppliers and basic customers. They are really looking to see how they can strategically ramp that up. Pace have had a good approach – visionary, open-minded."

He said UKTI wanted to stop companies feeling daunted by the scale of the opportunity in China.

Mr Manning added: "One example is the work we commissioned with the China-Britain Business Council who are our partners in China, and the University of Leeds, to provide some research into the opportunities in China's second tier cities.

"There are 100-plus cities with populations of more than 3.5m people in China. The scale of that can dazzle a lot of UK companies. These are 35 cities across China that have good opportunities that are accessible to UK companies."

He said China's cities were being brought closer together by new infrastructure, such as faster road and rail links.

He added: "Companies can find a whole suite of economic advantages within a relatively close cluster.

"Doing your research is important. We offer a range of services that enable companies to research the market in advance and for us to arrange bespoke programmes of company visits."

Mr Manning said he could put entrepreneurs who were looking to do business in China with firms that were already there.

He added: "They can share some of their experiences and point out some of the potholes and where some of the easy wins are.

"It's a big market offering a potentially massive gain for Yorkshire companies. Companies in China are growing rapidly both in terms of size and diversity."

Companies that were willing to invest in a second and third visit to China could make a lot of progress quite quickly, he said.

He added: "We talk a lot about China being a 'change agent' for UK companies looking to grow their business in Asia. It's probably the 'change agent' in the world at the moment."

The vision needed to succeed

Yorkshire companies looking to trade with China must play to their strengths and seek partners, according to Bob Manning, the head of trade and investment at the British Consulate-General in Guangzhou.

He stressed that Yorkshire companies looking to enter the Chinese market must know what differentiates them from local companies."The companies that succeed in China are those that can approach it with a clear idea of what they want to get out of it, and also approach it with a fair amount of energy and vision, and a flexibility to spot openings.

"Once established, they can move into areas they hadn't originally envisaged."