Over the past decade the region’s businesses have more than doubled trade with China.
The Department of International Trade (DIT) saw Yorkshire exports to China grow by 41 per cent in the 2018/19 financial year to £705.9m.
The growing economy in the Far East is seen as a crown jewel in trade circles but it doesn’t come without its challenges. In addition to the obvious language barrier, there are logistical and legal issues that often crop up when companies look to broaden their horizons.
A small Huddersfield-based consultancy specialising in trade with China has been helping businesses negotiate these challenges for the past 15 years.
Connect China traces its roots back to a project run by Leeds Beckett University to connect Yorkshire to Hangzhou in Zhejiang.
When funding for the project finished in 2004, Joanna Lavan realised that she was on to something and decided to set her own consultancy up, effectively doing the same thing – connecting Yorkshire to China. “We provide a whole host of services,” Ms Lavan says. “Mainly, we identify partners for UK companies.”
Those partners could be anything from agents and distributors to manufacturing partners.
It’s not all that the consultancy does. Ms Lavan is a keen believer in entrepreneurs getting to know the market properly before committing commercially.
Connect China will facilitate a visit for the company, arrange meetings and even translate business cards into Chinese for them.
“We do the travel and accommodation for them,” says Ms Lavan. “Then we go to the meetings with them, act as an interpreter and translate the information.”
Getting on a plane and exploring new markets is something that Ms Lavan is very keen to push, whatever country that maybe. She can’t understand why so many business-owners are reticent about travelling to explore new markets.
“They should get on a plane more often and go out to a country,” she says. “You sort of wonder why aren’t people going and finding out about different opportunities.”
The managing director of Connect China herself was asked to accompany the then Prime Minister Theresa May on a trade mission to China in 2018.
Ms Lavan says that despite it becoming easier over the years to trade with China, it is still a “challenging market” and anyone looking to build trade ties with the country needs to understand the business culture over there. The emphasis is on relationships over business in China.
“The Chinese don’t work with people that they don’t trust. Contracts are not set in stone so things can change at the last minute,” she says.
“Just when you think you’ve reached a deal it doesn’t happen. You have to do a lot of negotiations and that always takes longer.
“Basically, it’s about understanding the complicated networks in China and understanding how to access them. You need a lot of patience and persistence as well.”
The best way to earn trust with Chinese businesses is to visit the market regularly, being honest and showing mutual respect, says Ms Lavan. Any deal has to be a win-win situation.
Mark Robson, head of region for Yorkshire at DIT, says: “Chinese business culture also places an emphasis on the strength of interpersonal relationships – a concept known as guanxi.
“Developing and maintaining strong guanxi can play a big part in any successful business endeavour.
“Yorkshire businesses should invest in developing a trusted relationship with their business partners in China, often through group dinners and social events, as part of trying to enter the market.”
Some of the in-demand sectors are food and drink, healthcare technology and education, says Ms Lavan.
Yorkshire exported power generating machinery and equipment worth more than £58m to China in the 2018/19 financial year, according to the DIT, growing 11 per cent on the previous year. Exports of other machinery and transport equipment surged by 39 per cent to nearly £83m.
She says: “I think it would be quite nice to see more Yorkshire companies going to China. A lot of companies are frightened by China because it’s so far away and because of the intellectual property problems but it is moving on. It’s moving very quickly and becoming a very international market.”
Companies that are serious about trading in the country should register their trademark and domain name in China, Ms Lavan adds.
As Britain prepares to leave the European Union, the topic of Brexit is “not really a problem at this stage”, when it comes to talking to businesses in China, says Ms Lavan. However, Prime Minister Boris Johnson must have a strong relationship with China if trade is to flourish between the two countries.
Firms now have easier access to trade in the country than ever thanks to the internet.
Mr Robson says: “E-commerce is a natural route for many businesses, but the most successful platforms aren’t always the same in China as those in the UK.
“For example, WeChat, a Chinese app that combines messaging with social media and payment functions, is extremely popular.
“With more than 900 million people using its payment function for commodities each month, all of which have access to third-party retailers, it presents an opportunity for Yorkshire retailers with the right products.”
However, Ms Lavan warns companies to exercise caution when doing business over the internet.
“Some companies dip their toes into China reactively,” she says. “So they get an enquiry and they don’t check things out beforehand. Due diligence is quite important.”
“Simple due diligence is important but it’s not so simple in China because they don’t have a Companies House like we do.”
Guiding ‘newbies’ on global journey
Looking to the future, Connect China wants to grow as a consultancy and help even more businesses expand into the growing country.
The business has launched a new programme that helps those firms that have been out there to seize the initiative and not let all their work building relationships go to waste.
Joanna Lavan said: “When the Yorkshire company gets back to the UK they get busy with other things.
“The China stuff is put on hold, which is a waste of all the work that has been done.
“So we’ve just started a new programme called China Business for Newbies. The idea with that is that we actually really get the business for the companies as well.
“We teach companies how to do it. We take them out to China so they build relationships as well but we keep on following up on behalf of the company to get that business more quickly.”
Ms Lavan may have spent the past 15 years helping businesses break into China, but she shows no signs of slowing down yet.
“For the foreseeable future I will be carrying on with Connect China and growing it,” she says.
For her it’s not just about China, but a truly international outlook on business. She has always liked international travel and did a lot of work in Central and Eastern Europe from about 1992 onwards.
She adds: “I like working with UK companies as well.
“Everyday is different. It’s not a routine nine-to-five job either.
“When I get up, the first thing I do is start work with China because they are seven hours ahead.
“I think it’s the variety. It’s all the people that I meet both here and overseas.”