The UK Prime Minister's three-day visit to China is now under way – the first by a British PM in eight years – and we’ve been hotly debating what will emerge in trade terms from the delegation’s discussions.
We’re looking forward to seeing tangible outcomes – and hope the delegation fully recognises that commercial opportunities are far from limited to exporting more UK products. We know from long experience that China rewards UK companies if they truly embed themselves in the country through on-the-ground sales, R&D and support teams and local partnerships, especially when it comes to tech innovations.
When you combine this with the sheer scale of the Chinese market, the opportunity is clear for UK tech firms not just to sell to but collaborate with Chinese businesses as co-creators.
So, while the PM’s visit will inevitably be framed around risk management and trade balances, it will be interesting to see whether UK companies are prepared to engage with China as it exists today – not as the low-cost factory of times past, but as a source of industrial scale and innovation.
It’s certainly encouraging that the UK Government is talking, during the visit, about tech cooperation with China. Understandably, most of its focus is on ‘safe’ sectors, and the Government is right to be cautious about sensitive technologies.
But major opportunities also lie in in applied industrial areas including manufacturing AI, robotics, energy systems and software – precisely the fields in which China is moving fastest.
The UK’s long-term interests lie, then, not only in protecting its strategic assets, but in operating at the frontiers of such industrial and technological innovation, much of which is now centred in China. And the UK’s Government and businesses need to explore secure ways to tap into this.
China’s ageing population, for example, is driving high demand for productivity-enhancing technologies. Automation will create smart factories and speed manufacturing and construction processes. AI-enabled medical diagnostic tools will reduce the pressure on China’s stretched healthcare professionals. Smart public services can be delivered by AI-driven platforms, streamlining administrative functions as the Chinese workforce shrinks. And these are all fields in which the UK excels.
It also strikes me that the UK’s formal engagement with China revolves primarily around big UK multinationals, but the real untapped potential lies with mid-sized firms such as advanced manufacturers, specialist engineering businesses and software companies. They could treat China as a second core market, but they need structured, on-the-ground support to help them do this.
Companies like this that rise to the challenge will, while benefiting from the size of the Chinese market, find that operating in the country also instills invaluable resilience. It’s such a dynamic, fast-moving and competitive environment, you have to iterate faster, price more aggressively and innovate in ways you simply don’t in western markets. If your business can succeed in China, it will thrive everywhere else as well!
Beyond this, there’s been speculation around the PM’s visit about China’s potential agreement to give visa-free access to UK passport holders, following similar moves for other European countries and Canada.
If this happens, it will be more than a symbolic gesture: easier mobility will greatly benefit entrepreneurs, engineers and mid-sized firms – precisely those who need to be engaging more deeply with in China for the commercial opportunities on offer.
Ultimately, we’ll know if the PM’s visit is a success, not just by the number of memoranda signed this week, but by whether, in a few years’ time, more UK companies are designing products, supply chains and technology strategies with China in mind from the outset – rather than treating it as an afterthought or a necessary risk.
That’s something we’re certainly hoping will happen.
If you’d like to discuss your prospects in China, you can contact Stewart at stewart.randall@intralinkgroup.com.
