British Business in China: Member Sentiment Survey 2018/2019

Published on 2018-12-18

Cybersecurity and Internet Restrictions the Most Significant Challenge to UK Business in China

  • The British Chambers of Commerce in China cite cybersecurity legislation and internet restrictions as most significant challenge to members.
  • While more than 40% note an improvement in intellectual property protection, it remains the second most significant concern with calls for more concerted focus.
  • Businesses are optimistic about their future in China and intend to increase investment in 2019.

British Business in China - Member Sentiment Survey-1.jpgOn 18 December 2018, the British Chambers of Commerce in China release the inaugural British Business in China: Member Sentiment Survey.  The survey captures the views of 212 British businesses operating on the ground in China, representing over £3 billion (US$3.8 billion) of revenue in their China operations. The survey looks at views on the business environment, market access, Brexit and US-China trade tensions.

At a time of flux in international economic relations for both the UK and China, British business is expressing overall confidence in the Chinese market. However, market access barriers remain and must be addressed. Despite progress in the opening up of a number of sectors over the last 12 months, the British business community is still waiting for further progress on other sectors that are still restricted to UK business. An open market will allow British businesses to realise their potential in China and benefit both economies.

Key findings:

● 65% of respondents are optimistic about the business outlook for their industry over the next two years, and 67% intend to increase investment in their China operations over the next 12 months.

● The three most concerning market access barriers for British businesses in China are:

  1. Cybersecurity and IT restrictions.
  2. Intellectual property rights protection.
  3. Licensing and certification difficulties.

● 50% of firms believe that conducting business in China in the past year has stayed the same, 31% say it has become more difficult and 19% say it has become easier.

● Ease of doing business improved the most according to the media and publishing; education; and aerospace industries, whereas respondents in real estate, logistics and accountancy were the most likely to believe business has become difficult.

● In terms of Brexit:

  • 55.7% believe that a no-deal Brexit would have no impact on their organisation’s revenue in China, while 23.8% believe it will have a negative impact.
  • 46.7% believe the possibility of a future UK-China FTA would benefit their businesses in China.
  • Uncertainty around Brexit is having a negative impact on 27.7% of companies.

● US-China Trade Tensions:

  • 52.2% of respondents report a negative impact from the trade tensions.
  • 21.2% have experienced a drop in demand for goods and services as a result of the tariffs.
  • If tariffs on $250 billion of exports to the US increase from 10% to 25% then 13.5% of goods-related businesses stated that they would be prepared to move production capacity out of China.

Please click here to download the survey report.