A Message from the China-Britain Business Council and British Chamber of Commerce in China

Following the outcome of the EU referendum, the China-Britain Business Council (CBBC) and British Chamber of Commerce in China (BritCham) remain confident about the prospects for the UK-China trade and investment relationship.

Tremendous opportunities exist for UK companies across China in a wide range of sectors. The UK remains a welcoming destination for Chinese investment. And there are ever-growing opportunities for partnerships between UK and Chinese companies around the world, not least arising from the Belt and Road initiative. CBBC and BritCham will continue to work with our members on all of these dimensions to help identify new opportunities and build upon existing links.

The success of UK companies in China is built on deep foundations of innovation and technological capacity, creative and trusted brands, and partnerships that have endured and flourished over many years. These are qualities that are respected and embraced in China, and will continue to drive business relationships long into the future.

The UK is also a long-established destination for globally-minded Chinese scholars, travellers and investors. Again the factors that drive this attraction – outstanding schools and universities, cultural heritage and storied history, corporate transparency and rule of law – remain unchanged.

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Inbound visitor statistics for April 2016

The latest available data from the International Passenger Survey is available below. This shows the volume and value of visits to the UK by overseas residents for the most recent month and quarter.

The survey is run by the Office for National Statistics (ONS) – monthly data is generally available 7 weeks after the end of each month and quarterly data is generally available 4 months after the close of each quarter. For publication dates and more information, please see about the International Passenger Survey.

Visits and spend figures

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Visits: The UK recorded 3.06 million inbound visits during April 2016, 3% fewer than in the record set in April 2015 and only the second time the UK has seen over 3 million visits in April. Looking at year to date and rolling twelve months the picture is positive. In the first four months of 2016 inbound visits to the UK were 3% higher than they were during the same period in 2015 at 10.42 million visits. Growth was also a feature over the rolling twelve months to April 2016 – up 5% at 36.43 million visits.

Spending: Overseas visitors spent £1.60 billion in the UK during April 2016, on par with the same time last year. Over the first four months of 2016, visitor spending was down by 3% – driven by weaker January and March results (compared to the same months of 2015). Over the twelve months to April 2016, visitor spending was flat, just marginally south of the rolling twelve months to March record. It should be kept in mind that this data is provisional with the Office for National Statistics due to release revised Q1 data in July 2016.

VISITS BY JOURNEY PURPOSE
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Holiday visits were 18% behind April 2015 in April 2016 which might partly be due to an early Easter in March. Over the first four months of 2016 there were 3.40 million inbound visits – 4% down on the same period last year; however, up on levels recorded for the first four months until 2013. The rolling twelve month period to April 2016 showed figures slightly up 1% with 13.71 million holiday visits.

Visits to friends and relatives (VFR) fell by 4% in April 2016 compared to April 2015, with 0.87 million visits. VFR visits in the first four months of 2016 were 7% higher than the levels welcomed at the start of 2015. There were 8% more visits in the twelve months to April 2016, compared to the previous twelve month period, at 10.67 million visits.

During April 2016, business visits posted strong positive results for the third consecutive month this year – up 21% compared to April 2015. Business visits in the four months to April 2016 were up 7% compared to the same four months of the previous year. Business results to the UK for the medium term period of the rolling twelve months from May 2015 were 6% above the previous twelve month period at 9.06 million – the best ever results recorded for this journey purpose.

Miscellaneous journey purpose visits are a combination of a wide range of different journey purposes, including (but not limited to) short term study, looking for work, shopping, attending a sports event and many more. As a result monthly results tend to fluctuate. Indeed, during April 2016 visits to the UK for miscellaneous purposes were 32% higher than April last year. In the first four months of 2016 there were 0.78 million visits (9% more than the same period a year before). Miscellaneous visits to the UK were tracking 13% higher in the twelve months from May 2015 than during the previous twelve month period.

Further updates to follow …

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What’s driving the Chinese consumer?

The Chinese consumer has become much more health conscious and more focused on value—although that doesn’t mean they want cheap products.

A new survey by McKinsey finds that Chinese consumers are spending on luxury items as well as services, and often do so when traveling abroad—where they sometimes find better prices.

You can listen to the McKinsey Podcast or read a transcript of the talk with McKinsey’s Glenn Leibowitz about the important trends emerging among Chinese consumers, and the opportunities—and challenges—they offer.

Fang Gong is an Associate Partner at McKinsey & Co., and the leader of their digital practice in Greater China. He is their expert on data analytics as a key to consumer insights. Daniel Zipser is a Partner who leads their Marketing & Sales Practice in China.

 

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China Middle Income Consumers

CBBC-Middle-Income-Consumers-Report

China has 725 million urban dwellers whose household consumption will triple in the 10 years up to 2022.

This is just one eye-watering fact to come out of the China-Britain Business Council’s (CBBC) ‘China’s Middle Income Consumers’ report, released today. It has been compiled through interviews on the ground across CBBC’s unparalleled network of 13 offices in China, and is supported by member interviews with key UK players in China: Burberry, University of Nottingham, Mintel, Savills and B&Q.

Exports of goods and services to China from the UK have already passed £1bn per month, but UK business must stay competitive and informed to access arguably the most important demographic in the world. China is on a relentless drive towards a consumption-led economy, sparked largely by the trends of middle-income consumers, with new habits, fresh attitudes and eclectic lifestyles.

But it’s not a case of ‘just turn up and succeed’ for UK companies. Any developing market has a range of pitfalls for the underprepared. Don’t rely on ‘foreign or British’ brand superiority – have a clear message for China’s middle-income consumers and be aware that they are becoming less brand-led, less brand-loyal and more discerning. For these issues, clear advice and next steps are offered, as well as sector contacts for direct follow up.

Stephen Phillips, chief executive, CBBC, said ‘This report takes many of the commonly known perceptions of Chinese consumers, looks beyond the headlines, and offers practical advice on next steps to succeed in China. It is essential reading for companies in the fashion, retail, automotive, real estate, tourism, education and healthcare sectors.’

Read this report to gain invaluable insights into the evolution of the luxury market, the Chinese e-commerce juggernaut, the gigantic influence of social media, how travel and overseas spending have changed attitudes, what modern leisure and entertainment in China looks like, and what car and property ownership mean today compared to just a few years ago. Finally, the report also looks at the government-led push towards private healthcare and the continued desire for high-quality, overseas education.

Download the report

This report is courtesy of the China-Britain Business Council

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