UK medium-sized firms have lower expectations for growth in China than EU rivals
UK medium-sized firms expect smaller revenues from exporting to China than their French, German and Italian counterparts, new research will reveal.
Despite the chancellor of the exchequer, George Osborne, recently outlining his aim of making China the UK’s second largest trading partner by 2025, research, to be revealed in a speech at Warwick Business School on Friday, has found that the UK’s 30,000 medium-sized companies have lower Chinese revenue growth expectations than their German, French and Italian counterparts.
Stephen Roper, of Warwick Business School and director of the Enterprise Research Centre, will also reveal to business leaders how the UK’s mid-market firms expect to outperform their German rivals in 2016.
Professor Stephen Roper, said: “UK mid-market firms expect to grow sales by 4.9% in 2016 compared to 3.8% in Germany and Italy and 2.7% in France.”
But his annual survey of the country’s medium-sized firms has revealed a lack of desire to meet Mr Osborne’s ambition to build trade links with China.
Professor Stephen Roper, added: “We found that almost half of those surveyed had no plans to start operational activity in China a figure which was higher than that in France, Germany and Italy.
“Why there is a lack of enthusiasm for selling into China is hard to know. It might be there are barriers to starting up in China or that firms don’t know how to export to China.
“There is some evidence in the survey that a lack of local knowledge is hindering any thoughts of exporting there plus a lack of interest in international expansion, but this is something we need to look into further.”
In a survey of 1,000 mid-market companies – that is those with sales between £10m and £500m – in the UK, Germany, France and Italy, Professor Stephen Roper found 48% of UK firms had no plan to export or operate in China. Meanwhile, the survey found the figure was 33% in Italy, and 45% in France and Germany.
In a speech to be delivered at Warwick Business School as part of a joint networking event with UK Trade and Investment (UKTI), Professor Stephen Roper will say: “In terms of China the UK’s mid-market presence lags marginally behind that of our EU competitors.
“Mr Osborne is keen on the UK improving its trading links with China, but the evidence from our survey shows the country’s mid-market firms face significant barriers to achieving that vision.”
Professor Stephen Roper will also reveal how mid-market companies are exporting to China and the experience of German, French and Italian competitors.
The roughly 30,000 mid-market firms in the UK account for 2% of the nation’s firms but around a third of all private sector jobs and wealth creation.