Manufacturers from China’s traditional industrial heartland are targeting West Midlands businesses as they seek new technologies to improve efficiency and reduce their carbon footprint.
Business leaders and local government officials from Liaoning province visited Birmingham as part of a drive to learn from West Midlands manufacturers.
The delegation, made up largely of people involved in building materials manufacturing, was the first of its kind to the city but it is hoped it will be the first of many.
Delegates met with professional services firms in the city, including law firms Martineau and Squire Sanders, as well as accountants from KPMG.
It is hoped the meetings will form the launch pad to connect with Midland businesses as developing Chinese companies seek to form partnerships or even buy UK firms in their quest for greater efficiency.
Top of their agenda is a desire to gain access to technology that can make their manufacturing processes more efficient and more environmentally-friendly
Liaoning is one of China’s oldest industrial regions, with a strong emphasis on heavy industry.
In recent years it has been eclipsed by the pace of growth in Shanghai and Guangdong but both the national and provincial governments are keen for it to catch up. It is hoped that fruitful connections with UK businesses will help accelerate the pace of growth.
Haitao Fang, international investment promotion centre department director of the Liaoning Provincial Bureau of Foreign Trade and Economic Co-operation, who was leading the delegation to Birmingham, said a recent shift in local government policy in the region was encouraging businesses to “become stronger and stronger rather than bigger and bigger”.
“We are encouraging our local enterprises to go abroad to invest to try and get opportunities and exchange information, ideas and technology,” he said.
“We want to upgrade our industries locally. There is a reliance on very energy intensive old technology and some of the technologies in the West can help with energy consumption.”
To this end the region’s government has set up a dedicated fund to help businesses in the region travel abroad, with Birmingham a favoured destination.
International investment specialist Mike Loftus, who assisted in hosting the delegation, said: “Professional services firms and experts in Birmingham are as strong as anywhere.
“Chinese companies are comfortable with the advice and support they can get from lawyers and accountants as being among the best in Europe.”
Speaking about why Birmingham was chosen, Mr Fang acknowledged there was an existing network of contacts in the area and said the city was known for its professional services firms.
“Birmingham is a world-famous industrial centre and a good place to set up business,” he said. “It is full of universities, research institutions and high-tech manufacturing companies. That is something Chinese companies are looking for.
“The main reason for the visit is to start a process for Chinese companies in our region to upgrade their technology.”
The partnerships formed could also work both ways, with Liaoning increasingly being seen as an attractive place for foreign firms to do business. BMW has already chosen it to manufacture its 3 Series model in China.
“Chinese business people want to talk to UK business people about projects of mutual interest that can be mutually profitable,” added Mr Fang. “Land prices are much lower than Shanghai, the workforce is well trained and labour costs are much lower. Quite a lot of Chinese companies are investing in the province and some have moved from Shanghai.
“The last national strategy by central government was to regenerate the north eastern part of China and it is an area with great potential for growth.”
Mr Fang also revealed that environmental protection was increasingly becoming a priority for China.
‘‘The government is setting up more and more legal structures and making sure companies follow them. The policy is to push companies to go out to find more technologies in terms of energy savings and environmental protection.”
Mr Loftus added: “There is certainly something to be gained by UK businesses. Chinese companies are looking at the possibility of licence arrangements with British companies or acquiring businesses, so there is potential for an income stream into the UK.
‘‘The technology and skills needed in China are here – the challenge is making the right connections.”