Stagnating domestic demand could push Chinese businesses into the UK market
More Chinese businesses could expand into the UK as domestic demand continues to stagnate, say leading audit, tax and business advisory firm, Blick Rothenberg.
Winnie Cao, a partner at the firm, said: “The Chinese National Bureau of Statistics latest release shows an increase in industrial production, including high-tech manufacturing which grew by 15.1%. But consumer market growth is flat; goods retail is down by 0.7%, and catering up only by 0.6%. This weak domestic demand could push Chinese companies and brands to seek new markets outside of China by expanding their UK presence.”
She added: “The high-tech sectors seeing growth include 3D printing devices, which grew by an eye watering 54.4%, lithium-ion batteries are up by 40.0% and industrial robots are up by 27.9%. These results are not surprising for anyone following Chinese technology developments. Chinese battery storage brands, such as Anker and Hithium are already penetrating the UK market.”
Winnie said: “The consumer market statistics echoes the general mood that China’s domestic market has reached a point of saturation and perhaps overproduction. This is often referred to as ‘involution’ or ‘neijuan’ (内卷) in Chinese, the character ‘nei’ translates to ‘inside’ and ‘juan’ to ‘rolling’. Pricing has remained flat across many sectors as businesses lower their prices to fight for the same market share, this is evidenced by China’s Consumer Prices Index (CPI) decreasing from 101.00 points in April to 100.90 in May.”
She added: “Similarly, property and fixed assets investment are down by 4.1%, which is a slowdown from the previous era where China’s economy was much driven by infrastructure and property.”
Winnie said: “The export and import figures remain healthy, increased by 16.9%. This shows that China continues to integrate with the world market despite the slowdown during Covid years.”