Companies are urged to take a fast boat to China

A one-day event was held at DLA Piper in Leeds organised by Leeds University’s Business Confucius Institute called China’s Luxury Goods and Services Market: Understanding Consumers and Developing New Markets. While China’s economy has expanded rapidly so has the demand from its consumers for luxury goods.

Louis Vuitton now has 38 stores in nine cities across China and watches and bags are the most popular items in the luxury market. Chinese consumers account for 27 per cent of worldwide luxury consumption now and by 2015 this will increase to an estimated 34 per cent.

Professor Peter Buckley, of the Centre for International Business at the University of Leeds, said the Confucius Institute is significant for business as well as Chinese culture and language.

“It’s a two-way dialogue,” he said of relations between the UK and China. “The idea of the institute is to build up the knowledge and the contacts and the centre is a place where people can come for tailor-made events.”

He acknowledged that the Chinese community is not as large in numbers as those in Manchester and Liverpool, however it may be small but it’s significant. Red Chilli restaurant – which has a branch in Leeds – is a major player and when the Chinese ambassador visits the UK he always requests its chef to cook for him.

Professor Buckley said: “We’ve had a bit of a debate about what the word luxury means. There’s the brands like Gucci, Armani, Louis Vuitton but in China the notion of luxury is much wider than that. For some time there’s been a mismatch what people in China on lower incomes would regard as luxury.”

Pointing to the Gieves and Hawkes label on his suit, he said Chinese consumers are also keen on premier products. Bicester Village designer outlet village is a major draw for Chinese consumers in the UK.

Professor Buckley said he once visited Bicester Village at 9.45am to buy a designer purse for his daughter and the car park was already full.

The shelves had been virtually emptied by Chinese customers buying products.

“The prices here are lower, partly because of taxes and the distribution costs in China. Chinese consumers are willing to travel abroad because of the prices and because they can be certain of the quality.”

Professor Buckley said the message is “Leeds is an excellent place to do business”.

One of the most important elements of Anglo-Chinese business relations is guanxi – or friend- ship.

Alastair Morgan, the British Consul General in Guangzhou, said there had been a growth in high net worth Chinese consumers. Chinese premier Li Keqiang indicated that his top three priorities in government were achieving sustainable economic growth, improving livelihoods and increasing social fairness.

Mr Morgan said there was a very high differential between the wealthiest and the least wealthy.

A key Chinese strategy is to increase domestic consumption and encourage a sense of wellbeing. The Chinese economy is now three times the size of the British economy and “growing rapid- ly”.

“Cities are growing at a rate of 16 per cent a year,” Mr Morgan said.

“China has a very large middle class and some of the wealthiest people in the world with the number of billionaires second only to the United States.”

There are around 1.8m very rich people, second only to Japan in the Asian market.

As well as the rapid growth in cities, economic growth of those inland is overtaking the coastal regions, he said.

It presents enormous opportunities for British exporters.

Fenella Barker, director of the China-Britain Business Council, said it presented an opportunity for “good quality, high street British brands to enter the mar- ket”.