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From left: Mark Hedley Keith Warburton Yingni Lu Dr Kegang Wu Lily Yuan Li David Murray
Tee Cato
Trading is two-way business
Doing business with China is often a two- way exchange, delegates heard, and Chinese investment in UK business know-how and the UK itself was also an area of growth.
While western business had sought the east for its mass manufacturing, and China still welcomes inbound business trading, China is now increasingly approaching the west to advance its own business interests.
Dr Kegang Wu
routes – the One Belt One Road initiative into central Asia.
Predominantly a manufacturing region, Guangdong was already “a hotbed of international investment,” said Wu, but increasingly its companies were looking outward for help to develop and improve their business operations, and even to market their own branded products overseas. Opportunities for British companies were now much broader than ever before, added Hedley.
Despite China's economy growing at an average 10% per year for the three decades prior to 2010, its GDP per capita remains well below those of the US, Japan, Germany and the UK. However, an affluent middle-class was fast developing, wages were rising, amid growing domestic consumer demand – notably for western branded goods.
Recent stock market fluctuations were not a cause for undue alarm, but should be regarded as a natural rebalancing of the rapidly growing Chinese economy.
This rebalancing was leading to “a new normal” for China,” said Hedley, while still producing an economic growth rate of which other countries would be proud.
THE BUSINESS MAGAZINE – THAMES VALLEY – OCTOBER 2015
A wide range of highly relevant advice and case studies was provided at the seminar from the other key speakers Lily Yuan Li of Reading- based Prospect China Services, offering Chinese business connections, training and strategic support; Yingni Lu of The 88 Initiative, linking Chinese and UK entrepreneurs and investors; plus Mark Hedley of CBBC, an SME sector expert who works closely with the British Chamber of Commerce in China, and UKTI.
Do you know your Renminbi from your Yuan?
Tee Cato, director of Trade and Working Capital for Barclays highlighted one other area of amazing Chinese growth – the importance of its currency.
Renminbi (RMB) and Yuan (¥) are the Chinese- equivalent of our British GBP and £ within the currency world, and increasingly the global business trading and banking world.
RMB is no different as a monetary unit from any another international currency, Cato stressed, but it is ‘special’ because China is now a very big global trading partner. Although RMB began to gain noticeable commercial use in 2003, it wasn’t till 2012 when the Chinese government started adopting banks outside China to clear RMB trading transactions, that “things started to move considerably,” Cato explained.
“In January 2014, RMB was the 7th largest world currency being traded. In May 2014 it was predicted RMB would be in the top five world traded currencies by 2017. It gained that 5th position in June this year.”
When further trading restrictions are lifted, the currency markets fully expect RMB to become as influential as American dollars (USD), added Cato.
Within British-Chinese trading transactions companies would also no doubt become involved with CNY (onshore RMB) and possibly CNH (offshore RMB). Plainly, any UK company used to dealing in GBP, EUR, or USD, but aiming to do business with China will need to be aware of the benefits, or not, of using RMB within their trading.
Lily Yuan Li
Cato suggested RMB business usage benefits could include lower financing and transaction costs, speedier payments, reduced FX exposure, improved supplier access and greater purchasing power.
Details:
www.88initiative.com www.cbbc.org www.globalbusinessculture.com www.linktochina.org.uk www.prospectchinese.com
Importantly, Cato revealed how financial and performance risks could be mitigated through the use of banking professional services and importantly the direct use of RMB when doing business with China.
Details:
tracey.cato@
barclays.com 07471-145337
Business THE M A GA ZINE
www.businessmag.co.uk TM
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