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West Midlands' China export surplus soars to £1.74bn

More than a third of the UK’s exports to China were from the West Midlands last year

Income from the Far East is expected to continue to increase in 2014, with traditional manufacturing areas leading the way

 

The West Midlands’ export surplus with China grew three-fold last year as the region raced to outpace the rest of the country in sales to foreign shores.

The region sold £1.74 billion more goods to the Far Eastern superpower than it imported, as Jaguar Land Rover drove foreign sales to previously inconceivable levels.

Total exports from the West Midlands rose by 18.4 per cent in a year, fuelled by emerging markets, but also boosted by the first rise in European income for several years.

More than a third of the UK’s exports to China were from the West Midlands last year – sending out more than £4 billion worth of goods while importing £2.3 billion.

That came as national exports overall struggled with income across England dropping for the third year running.

Paul Noon, UKTI regional director for the West Midlands, said he expected income from the Far East to continue to increase in 2014, with traditional manufacturing areas leading the way in export growth.

Mr Noon said: “I think the growth in exports that we have seen over the last two years will continue to come.

“I think JLR accounts for about half of the growth. In terms of the rest, it is a good question, but in general there has been three regions with growth – us, the East Midlands and the South West – while the rest of the UK has been sluggish.

“I think it is because there is more manufacturing in these regions – we make quality products and Brand Britain is doing particularly well.”

The £4 billion of exports to China last year rose from £2.7 billion in 2012 and £1.9 billion in 2011, sending last year’s export surplus of £534.8 million soaring.

Across that time, total exports have risen to £27 billion, up from £22.8 billion last year and £21.3 billion in 2011.

In the same period, exports from the nine English regions in total have shrunk from £223.4 billion to £220.2 billion.

Mr Noon said he did not expect to replicate the 18 per cent growth in total exports, but thinks 2014 export growth will be in double figures for the West Midlands.

However, with a 13.4 per cent overall rise in the fourth quarter of last year alone – up to £7.5 billion – the rise shows no sign of abating.

The region imported a total of £33.3 billion worth of goods and exported £30 billion in 2013, but Mr Noon is predicting the region will be in export surplus by 2016.

Precision stampings firm Brandauer is among the region’s manufacturers to see exports to China soar in recent years.

The firm supplies parts for kettles to the Far East and has seen income from that part of the world rise by about 15 per cent in the last three years, to £2 million out of a total £7 million turnover.

Sales and marketing director Rowan Crozier said that figure would soar again in 2014 after it recently won another export order.

He said: “We have probably had about 15 per cent growth in three years. It has basically happened alongside our customers.

“We supplied our customer base in the UK and Europe and as they have ‘off-shored’ they have taken us with them.

“That number is set to grow by another half a million pounds in the next 12 months as we will be supplying to a new contractor in China.”

Mr Crozier said that while it isn’t an easy process shipping goods out to the Far East, the process can be made easier by working in partnership.

He added: “It is not easy but there are ways to enter the market. If you partner with your customers heading that way then it makes it easier.

“The challenging side is the supply times – there is a sea freight and a road freight element, and you have to handle longer shipping times.”

Jason Wouhra, chairman of the IoD West Midlands, said the region was bucking the national trend on exports and leading the way in China.

He added: “Jaguar Land Rover is a shining example to all of us but we should not forget other smaller scale specialist motoring success stories.

"A great example is The Morgan Motor Company exporting specialist sports cars to China, combining the best of high tech engineering with British style, heritage and tradition which the Chinese absolutely love.

“The West Midlands is absolutely at the heart of manufacturing and export.

"During the last financial year our top 50 manufacturing companies turned over £50 billion which shows how massively important we are to the national economy and continued recovery.

MP Liam Byrne, who is vice-chair of the all party group on East Asian business, said the region was showing the way to export success.

He said: “The West Midlands is leading the way. If we want to be a major trading nation again these are the figures we need.

“I think this is only the start for the West Midlands in China. We are becoming one of China’s favourite places to invest and exporters from this region are proving they have got what it takes to do well in what will soon be the world’s biggest consumer market.

“There are great leaders like Jaguar Land Rover, but the West Midlands’ success is about much more than that.”

Mr Byrne (Lab Hodge Hill) said he felt the city had woken up to the possibilities on offer in the Far East and was reaping the rewards.

“We have definitely got the message and we are gearing up like never before and that is why Chinese investors are beating a door to Birmingham,” he added.

Business will be given a helping hand to boost their overseas sales when UKTI hosts its Export Week from April 7 to 11.

A mix of seminars, masterclasses, one-to-one meetings, workshops and networking events will be put on to encourage firms to push foreign markets.

 

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