Why China?


Let's begin with the obvious - China's vast population is roughly equal to Europeand North America combined, close to 1.4 billion. But it's not just size of the consumer market that makes China attractive – it's the scale and depth  of the economy as a whole.  Since the  “reform and opening-up” policy was introduced in 1978, China has changed beyond recognition.   A Soviet-styled planned economy has transformed into a vibrant market-oriented economy (albeit still with strong Party oversight and intervention).

China is now home to:  

  • 100 of the Fortune Global  500 companies, including numbers 2, 3 and 4 (State Grid, CNPC and Sinopec)
  • The world's biggest retailer, by transaction volume (Alibaba)
  • The city with the most billionaires in the world (Beijing)

Read essential insights and recent case studies about business with China in our dedicated key markets section.

Advantages for British businesses exporting to China include:

  • Respect for British quality, safety and service
  • Recognition of "brand Britain", Union Jack and aspects of UK culture
  • Strong experience in many sectors where China is struggling to deal with rapid change – e.g. elderly care, environment, health, safety
  • Priority given to English over other foreign languages in education system
  • Highly developed communications and transport infrastructure
  • Rapidly expanding middle-class, with disposable income and an appetite for imported goods.
  • Strong desire to build partnerships with overseas companies and markets
  • World's largest online market for goods and services

Strengths of the Chinese market:


Doing business in China can be more difficult than some other export markets.  It’s important that British companies come to China well prepared.  Here are some reasons why:

  • 7 or 8 hours' time difference [1] from UK can hamper communication.
  • Very different online environment due to the "Great Firewall" and dominance of local digital giants such as Alibaba, Tencent and Baidu.
  • Regulations are often unclear, and interpreted in different ways by regional offices.
  • The distribution market is highly fragmented, and small, local providers are often involved.
  • Chinese companies do not trust others until a strong partnership has been developed over time.  UK businesses who approach the market without adjusting expectations are likely to be disappointed.

Growth potential:

China's economy has grown at a staggering rate during the last few decades.  Though its annual growth rate is significantly lower now than during the early 1990's and late 2000's (where it reached 15%) it has remained fairly stable since 2012, between 6-8% . 

Because China's coastal areas developed most rapidly during that time, living standards vary significantly from region to region, and between urban and rural areas.  As a result, there is much potential for consumer growth in the centre and west of the country, and in the so-called 2nd, 3rd and 4th-tier cities.  The economies of those areas are also receiving significant government investment, with the aims of developing regional infrastructure, modernising industry, strengthening the role of services within the economy, and reducing social inequality.  Of particular importance is the Government’s "Belt and Road" strategy, which is leading to heavy investment along the trade routes into central and southern Asia, and Europe.

Though (mobile) internet use among the young urban population is high, internet penetration was still only around 50% at the start of 2016.  This figure is growing steadily though, and UK businesses who develop their online presence well in China can expect to reach more and more potential customers in the coming years.

Trade between the UK and China

China is a member of the WTO, and has free trade agreements with a number of countries – though not, as yet, with the EU or the UK.

In 2014 the UK exported £18.7 billion of goods and services to China, and imported £38.3 billion. As such, China is our 7th largest export market (3.6% of total exports) and 3rd largest import source [2].

Top UK exports to China include:

  • Road vehicles
  • Machinery
  • Pharmaceuticals
  • Business and financial services

The UK also exports an increasing amount of consumer goods to China, including food & beverage, fashion, luxury goods, healthcare and baby products.

See the menu on the left to check up-to date opportunities by sector.

[1] Depending on Daylight Saving

[2] ONS

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