The fastest-growing major economy in the world, it expanded at an annual rate of 7.9 per cent in the fourth quarter of 2012, helping to lift full year growth to 7.8 per cent. Though China’s slowest pace for 13 years, this generated roughly a third of global economic growth of 3.2 per cent.
China has long been seen as an attractive market when it comes to export, but Giles Blackburne, a Leeds-based director at the China-Britain Business Council, warned that China’s requirements are not straightforward. “On the one hand China is trying to solve all kinds of problems affecting the daily lives of its citizens – for example, poor air quality, overcrowded cities and an ageing population. It doesn’t know all the answers, so is on the lookout for solutions.
“On the other hand the wealthy Chinese consumer is coming on stream. They have a huge appetite for brands, giftware and innovations –- indeed all kinds of ‘face boosting’ products and services that can be worn, consumed or used in public areas. They also crave nutritious food stuffs and educational experiences that can ensure that their families are healthy and prosperous.”
The second fastest-growing major economy after China is India, another huge, challenging market, but where many opportunities exist for UK firms. According to the UK-India Business Council, current growth rates of more than five per cent are largely driven by domestic demand, fuelled by a rapidly-growing middle class.
Richard Williams, international tax partner at Deloitte in Yorkshire, said: “The emerging middle classes of China and India are increasingly powerful consumers of Western goods – as strong consumer markets develop in their home countries.”
In the third quarter of 2012, exports by companies in Yorkshire and the Humber to Asia and Oceania hit £493m, slightly down on the £507m recorded in quarter two, but up on quarter one’s £416m. To put this in context, total exports from Yorkshire and the Humber reached nearly £4bn in the third quarter, up from £3.7bn in the previous three months.
No-one is likely to dispute the importance of major emerging economies such as China and India as vital trading partners for Yorkshire businesses. But the wider region is “equally alive with potential”, according to Mark Robson, UK Trade & Investment (UKTI)’s international trade director for Yorkshire and the Humber.
Japan, for example, the third largest economy in the world, has a GDP twice the size of the UK, GDP per person 10 times that of China and is known as the high-tech powerhouse economy of Asia.
British companies are succeeding in Japan, which has the second highest spend worldwide on research and development, across a wide range of manufacturing, consumer goods, high-tech and services sectors.
Manufacturer AZDRY, which is based near Barnsley and has a £500,000 turnover, has benefited from tapping into the Japanese market with its dry suit, designed to protect emergency workers facing dangerous waters. Director Graham Wiggins said: “We’ve been government contractors in this country for the last five, six years, but the government isn’t spending money, and at the end of the day water rescue can be in Manchester or Japan, it’s the same.” He said: “The Japanese are very trustworthy... they pay the bills promptly, but everything has to be 110 per cent.”
There is a strong case for arguing that some of the lesser known emerging markets actually present the greatest opportunities, said Mr Robson.
Myanmar for example, also known as Burma, is a relatively new market for British businesses, but a policy discouraging trade and investment was lifted by the Government last April, creating opportunities in areas such as oil and gas, and financial services.
Mr Robson said: “Vietnam, meanwhile, is appealing because of increasing affluence amongst its sizeable population. In 2010 it signed a strategic partnership Agreement with the UK, of which trade and investment are important elements, and exports now total more than £500m.
“In addition to financial services, where the UK is the leading foreign investor, there are also opportunities in Vietnam in many other sectors, such as infrastructure, energy, retail and ICT. Vietnamese culture places great emphasis on learning, generating potential in the education sector.”
He added: “There are many other markets to consider in this vast region, with the likes of Bangladesh, Indonesia and The Philippines also worth an honourable mention.”
n In partnership with Heathrow, the Yorkshire Post is running a special series highlighting global trade opportunities for Yorkshire companies, with the focus turning to Europe next week.