Will post-Brexit Britain trade with China?

With the current exit date set at 29th March 2019, the country’s European Union exit has snuck up on us all! Worryingly, it seems to have snuck up on the government too, who seem no closer to resolving an exit deal with the EU. In light of this, it would seem prudent for companies to have a back-up plan in the event of a no-deal Brexit. But according to one survey, less than a third of UK companies have done so. 



It wouldn’t be the best outcome to walk away with no deal, but it would allow the UK to make trade deals across the globe. It would not affect trade with countries outside the European Union, which is precisely what the UK seems to be planning for with its Prime Minister having recently visited China for talks.


A deal with China would benefit the UK, but does China see any benefit to trading with us? After all, in 2016, the UK imported £42.3bn worth of goods from China, but exported ony £16.8bn to China in return. But then again, that’s not entirely proof that China wouldn’t increase its British exports demand if a trade deal was in place — the country is already hoping to widen its trade with The Belt and Road Initiative.


The initiative intends to forge strong trade links from Asia all around the world. The “belt” side of it roughly equates to the land connections it will build through railroads, and the “road” refers to a sea-route of trade. Essentially, China is building a new Silk Road,  and 71 countries are already part of the project, including Russia and New Zealand.


According the Business Insider UK, opinions are divided regarding the scheme. Where Chancellor Phillip Hammond has voiced his support of it, Prime Minister Theresa May seems hesitant to support a project she doesn’t see as a guaranteed success. This could, of course, change as the UK’s relationship with China evolves. In fact, we have already enjoyed success in China before Brexit has even resolved. At the start of 2018, during talks between the UK and China, the 20-year ban on British beef was lifted. The deal is purported to be worth £9bn to the UK.


After an outbreak of “mad cow disease”, the EU placed a worldwide export ban on British beef in 1996. It wasn’t until 2006 that the EU lifted the ban, but other countries chose to retain their ban on the product, including China.


What else would China potentially want to import more of? What markets and UK businesses could, potentially, fare well with Chinese consumers? According the Telegraph, top British exports the Chinese enjoy are:


·        British cars

·        Burberry, and other designer labels

·        Scotch whisky

·        Scottish salmon


Both big and small brands are enjoying success in China. The Creative Industries reported on the success of hairbrush and haircare brand Tangle Teezer over in China. Tangle Teezer’s International Managing Director, Gemma Clarke, confirmed in the article that China became its second biggest sales market in only 3 years trading there.


The product’s success in China is largely linked to a Chinese model purchasing the product and introducing it to her social media followers. China loves its online shopping, so influencers should not be overlooked when planning to cater to the Chinese market.


There are no reasons why smaller firms shouldn’t open themselves up to the potential of the Chinese market. At the very least, firms need to plan for the eventual shake-up to the UK’s ties with the European market once Brexit comes into play, and time is running out to start building the foundations. This small window of golden opportunity has been highlighted by Rebecca De Cicco in regards to the UK’s construction industry in particular. The director of Digital Node outlined how 70% of buildings over 200 metres tall completed in 2017 were built in China, and so the country is increasingly interested in building information management software and crowd simulation. The use of British construction software has already proved its value to the Chinese construction sector in Beijing’s new airport, the Beijing Daxing International. Projected to see 45 million passengers a year, the airport’s construction has benefited from crowd simulation software provided by UK building design software experts, Oasys. The software alerted the construction company and designers to any potential bottlenecks, congestion problems, or other inefficiencies.


A general outline on how to approach the Chinese market has been covered by The Business Magazine.  As with any overseas market, the magazine advises companies to consider the culture of the country they are trading with; in this case, explore China’s culture. The general consensus is to be aware that what works in the UK may not work in China’s business ground, and as relationships can take a long time to build, jeopardising them with an ill-placed comment or miscommunication can slow that pace even further.


It is always wise for businesses to have a contingency plan for the worst-case scenario. Whether or not we retain trade deals with the EU, and to what to degree, the wider world is coming to the UK. Will it be a great opportunity for businesses, as some predict?

Author: Editorial Team

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