Gaps in eastern markets provide promise for savvy SMEs

When it comes to businesses that have cracked China, TradskinCo doesn’t
immediately leap to mind. But the Tewkesbury-based sheepskin business has
successfully managed to break into the notoriously difficult Chinese market. And
whether the deal is worth hundreds of millions of dollars, or TradskinCo’s
£74,000, all successes should be celebrated.

Of course, Tom Cooke, owner of TradskinCo, didn’t make the breakthrough on
his own. He had built a solid international trade in Europe through his own
contacts, but found that the same approach wasn’t working in the eastern
markets. ‘I had contacted several leather companies, but no amount of faxes,
emails and phone calls led to any interest,’ he says.

But within months of approaching UK Trade & Investment he had signed a
deal to ship four containers of sheepskins to a Chinese tannery.

It isn’t just government-backed bodies with their teams in Shanghai and
Beijing that are helping UK SMEs. Accountancy firms are doing so too.

As well as the Big Four, mid-tier firms are well represented. The BDO network
includes firms in Hong Kong, Beijing, Shenzhen, Guangzhou, Shenzhen and Wuhan.
PKF has expanded its international hotel consultancy services with the launch of
an office in Shanghai, while Menzies’ London team advises clients with interests
in China.

The UK’s historic ties with Hong Kong offer a launch pad for those who find
direct investment in mainland China a problem. And the closer economic
partnership arrangement between the mainland and the former British territory
offers preferential and accelerated market access to businesses that are looking
to grow there.

Simon Galpin, associate director-general at Invest Hong Kong, says that many
UK firms haven’t made the leap yet. ‘We don’t get contact from tier-two firms,’
he says. ‘But we would welcome it. We are happy to provide support to companies
and their business services providers.’

‘Special’ relationships would count for nothing if the fundamentals were not
right. But the UK’s strengths match China’s needs – from banking and financial
services to education, aviation and automotive industries to telecoms and
environmental technology and pollution control to science.

For companies like TradskinCo to get a foothold, it’s not just a question of
waking up to opportunities. China has had to play catch-up on a massive scale.
It is reforming its tax system, its governance procedures and has transformed
what was until recently a centrally-planned economy in a free(ish) market.

‘China has done well in aligning itself with the international business
community,’ says Simon Lam, a Hong Kong-based small practitioner who runs a
network of firms in southern mainland China.

But Lam acknowledges that there are factors that are harder to change when it
comes to attracting investment. ‘China is so big its scale frightens people,’ he

But size is something ambitious businesses in the UK must get used to. After
all, according to Christopher Hammerbeck, executive director of the British
Chamber of Commerce in Hong Kong, things should get better economically
speaking. ‘The medium and long-term view is very positive,’ he says.

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