UK firms in China positive on outlook ahead of Brexit

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Europe

With 100 days to go until Brexit, British companies operating in China remain optimistic about the business outlook over the next two years, according to a new report by the British Chambers of Commerce in China (BCCC), with a majority reporting Brexit uncertainty is having no impact on their revenue in the country.

The British Business in China Member Sentiment Survey, the first study of its kind, was released Tuesday in Beijing, with British Chamber Chair Nicholas Holt saying that while “a significant proportion” of the 212 respondents were optimistic about their futures in the country, the survey revealed “British companies have concerns around the business climate in China.”

Chief among those concerns are cybersecurity, protection of intellectual property rights and barriers to obtaining licenses, with the survey, conducted by the British Chambers of Commerce in Beijing, Shanghai, Guangdong and southwest China, also highlighting concerns in the British business community over China-U.S. trade tensions.

With the deadline for Brexit negotiations looming, the British government has so far failed to reach a deal with Brussels on the terms of its departure, with the recent vote of no confidence in Prime Minister Theresa May compounding ongoing uncertainty over the country's fate.

For British businesses in China, while that uncertainty remains a concern, only 27.6 percent of companies surveyed believe it would have a negative impact on their revenue in the country; and 61.1 percent of respondents to the BCCC survey said the uncertainty would have no impact on revenue.

Holt told CGTN that when it comes to Brexit, Chinese business partners “don't like the uncertainty,” although the UK remained a place with huge opportunities for Chinese investment.

With the UK government stepping up domestic plans for a no-deal situation, the BCCC survey saw the majority of British firms (55.7 percent) in China saying there would be “no impact” on revenue in China in such an event.

Interestingly, for companies expecting some impact from a no-deal Brexit scenario, the survey shows a fairly even split over whether or not that impact will be positive or negative. 23.8 percent of businesses expect a hit to revenue, while just over 20 percent expect to benefit from a no-deal.

British goods providers (32.4 percent expecting a negative effect) were more pessimistic than those in the services sector, with the survey suggesting there were concerns over supply-chain disruption.

Optimism over a no-deal situation – which would in effect leave the UK free to negotiate its own trade agreements with other countries – could be attributed to a potential post-Brexit China-UK free trade agreement.

46.7 percent of respondents told the BCCC that the prospect of signing such an agreement with China would have a positive impact on their business opportunities, with particularly strong support from the built environment and financial services sectors.