Event round-up: China market access workshop
On Wednesday 18 May 2021 techUK in partnership with CBBC (China Britain Business Council) hosted a peer-to-peer workshop addressing potential challenges UK-based tech businesses of all sizes face when entering the Chinese market. Experts from DIT China, Crayfish, Rouse and Hawksford joined the session to answer China market access questions posed by techUK and CBBC members.
In our discussion, experts agreed that China offers a mixed picture of opportunities and challenges. China has bounced back from the pandemic better than any other major economy and already ranks as the world’s second largest digital economy. It was noted that China’s 14th Five Year Plan outlines the country’s commitment to the goal of technology self-reliance, encouraging “indigenous innovation” in the fields of artificial intelligence, quantum computers, semiconductors, and health and life sciences technologies. In addition, there are growing opportunities for UK businesses in FinTech, Greentech and EdTech. For UK businesses already operating in the country, China has become a larger part of their global revenue than it was before the pandemic.
China is rapidly developing and deploying a range of emerging technologies, from 5G and artificial intelligence to quantum computing and blockchain, into a wide spectrum of industries and applications. The UK is home to world-leading digital innovation, with the UK start-ups and scale-up ecosystem valued at $585bn in 2020. Despite this, relatively few UK-based tech businesses have invested in or are actively exporting to the China market, with many tech businesses choosing to prioritise the more familiar US and European markets.
The session addressed some of the challenges UK businesses need to take into consideration before entering the market. There are legal challenges around new cyber security law and the data protection law, which businesses need to comply with in order to be able to do business in China. Based on the poll results, businesses perceive geopolitical issues and growing UK-China political tensions to be the main challenge when doing business in China, followed by data and cybersecurity compliance. Some participants raised the issue of the UK export licensing system impacting their profitability and the ability to invest in R&D and to compete in global markets.
Although IP protection is continuing to improve in China, all businesses need to have a clear IP protection strategy and conduct due diligence before entering the market. All experts highlighted the importance of gaining a good understanding of IP regulation, export controls and the nuances of setting up presence in China. It was also noted that it is essential to perform due diligence on partners on the ground.
Opportunities however seem to outweigh challenges as most participants described their company’s business outlook in China as positive.
About the UK-China Tech Forum
Jointly hosted by techUK and the China-Britain Business Council (CBBC), the UK-China Tech Forum is a platform to allow businesses to engage with key stakeholders in government and business in areas of UK-China tech trade, policy and market growth in both countries. The forum is for representatives of businesses, government and other stakeholders interested in influencing or understanding the policy landscape impacting the technology sector, trade relations, and the market opportunities and challenges in China and the UK.
The forum brings members together to discuss issues and events that may impact their growth in the UK and China and provides an avenue for collective concerns to be aired and discussed with both governments. Moreover, it provides a platform for participants to explore emerging opportunities for growth and expand their business networks via topical engagements throughout the year.