Festival of Business: Looking East – India or China?

Friday, September 16, 2011 | Posted by: Fiona Cullinan
Categories: China , India, Thought leadership | Tags: business, India, Grant Thornton, China, sponsor, conference, HSBC, Manchester, Nick Farr, comment, Telegraph, Festival of Business, opportunities, exports, panel, opinion

What are the opportunities for UK businesses in Asian markets? We report from the ‘Looking East: India or China?’ panel discussion at today’s Telegraph Festival of Business, in partnership with Grant Thornton.

You can read our other reports from the Festival of Business here.

The emerging markets panel featured Mark Berrisford-Smith, Senior Economist, HSBC; Dalip Puri, Head of Multicultural Commercial Banking UK and Global Head of Indian Business, HSBC; Ben Chan, Deputy Head of Business Planning and Strategy, Hong Kong, HSBC; and Grant Thornton’s International Tax Partner and Head of China Britain Services Group, Nick Farr (pictured).

What did the experts view as the opportunities for UK businesses in Asian emerging markets?

Mark Berrisford-Smith:

“It’s a nice assumption that Chinese and Indian markets roar along at 8% but economies never work that way. They both have more inflation than they would like. If the world tips into a recession then we will look to these markets again, as we did in 2008/9 – although not to the same extent because of their inflation.

“China has been all about investment spend, unsustainably so by their own admission. India has been more about the consumer – but has a large infrastructure need. Although India has a large middle class, they have considerably more poverty than their Chinese counterparts.”

Dalip Puri:

“India is hungry for foreign investment. There is a growing middle class hungry for everything that everyone else wants.

“Companies from the UK need to go into India and share their technologies with them. India is hungry for the intellectual capital that the UK has. The UK has preferred status in India, the historical connection has not been explored or engaged.”

Ben Chan:

“China will switch from an export economy to a domestic consumption economy. There is already evidence of this: car sales in China last year outstripped those of the US (13 million to 10 million). China is also number two in the luxury goods market and looks to succeed Japan as number one.

Do UK companies understand the potential?

Nick Farr:

“China and India are in the press every day. There’s a certain fear of knowing where to start. Asia is very relationship-driven. The key is taking a longer term view and doing your homework.”

Dalip Puri:

“You do need to do your homework. There are lots of UK companies owned by people of Indian extraction doing very well because they understand the marketplace.”

Ben Chan:

“Even for someone from Hong Kong, I don’t know all the rules for China. Companies in the UK should start out with Hong Kong, finding someone with partners in mainland China.

“It is about long-term relationships. The Chinese are not transactional. Relationships are for five years at least!”

Why are exports to our neighbours so much higher than to Asia?

Mark Berrisford-Smith:

“There’s a natural tendency to trade with your neighbours. It’s hard to overcome that basic geographic fact.”

Nick Farr:

“It’s partly geographical, partly fear. Also consider that the UK is much more keen on outsourcing the manufacture of goods than most other countries in the West, meaning a great deal of the products we would export are actually coming out of China.”

Visit the Telegraph’s Festival of Business website. Visit our Performance Improvement page for dynamic businesses or our Emerging Markets section featuring China Britain Services Group and South Asia Group. 

Words: James Hickie. Image: © Grant Thornton UK LLP

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