China is burgeoning with commercial opportunities for UK enterprises: bilateral trade has more than doubled in 5 years and President Xi Jinping’s state visit at the end of 2015 heralded a ‘golden era’ in the relationship between Britain and China. For individual British businesses, the challenge now is how to capitalise on those opportunities. In that, the LEPs have a vital role to play.
China is one country that spans the same amount of territory as the 50 countries of Europe. China’s population is double that of Europe. China is divided into 34 provinces – most of them larger than individual European countries, both geographically and economically. Those provinces are then sub-divided into regions and cities, each of which are accountable to the next level up in the national hierarchy.
The UK being a much smaller country than China, there are fewer levels in the heirarchy between central and local government. This leads to a frequent mismatch between parties in China-UK discussions, with several important levels of Chinese engagement being ignored. The deleterious results are predictable.
Furthermore, whilst the Chinese economy has been liberalising since the 1980s, the relationship between the public and private sectors remains much more tightly inter-linked than it is in the UK. A failure to engage the relevant public officials in China at each point of a commercial venture likewise results in opportunities not being realised.
The LEPs have a vital role to play, both in filling the gap in the heirarchy as well as in connecting the private and public sectors so that individual UK enterprises are able to succeed commercially in China.
Anyone that has attended a meeting in China will be familiar with the protocol of pairing up counterparts around the table. Central government officials have good relationships with their counterparts in UK, and there are strong inter-governmental relationships at the county and district level. It is at provincial level, that a suitable UK counterpart for the Chinese partner is often neglected.
In response, China UK Enterprise (CUK) promotes LEPs to Chinese officials, who have no equivalent organisation in China to compare them to. Recognising the value of LEPs to the British economy in bringing the private and public sectors together at the regional level – with support from both local businesses and central government – CUK presents LEPs as the missing link in China-UK regional pairings. CUK’s investment in endless meetings and extensive networking has paid off with provincial governments now showing a willingness to connect with LEPs across the UK. Those same officials are now looking to CUK to introduce LEPs to them and facilitate those regional connections.