China

Capital: Beijing

Largest city: Shanghai

Administrative divisions: 34 divisions

Currency: Renminbi (yuan) (¥) (CNY)

Area: 8,514,877 km2

Population: (2012) 1,353,821,000

Calling code: +86

Mandarin, Chinese

The UK is one of Europe’s largest investors in China, and among the largest destinations in Europe for

China’s outward investment. With a population of 1.3 billion, China is the second largest economy and

is increasingly playing an important and influential role in the global economy. China’s success has

been primarily due to manufacturing as a low-cost producer. This is attributed to a combination of

historically cheap labour, good infrastructure, relatively high productivity and favourable Government

policy.

*Actual average rate

Source: Oxford Economics

Economic snapshot (% annual growth rate)

Economic outlook

China’s economy expanded at an annualised rate of 7.4% in

the first quarter of 2014. The process of rebalancing China’s

more challenging. Consumer spending should outpace

investment over the next five years as the Government seeks

to rebalance the economy. But consumption will also be

to 6.8% in 2015.

Trade outlook

Growth in Chinese exports is expected to be faster than other

economies in Asia over the medium term. Chinese exporters

will begin to target new markets for their products in other

emerging economies. Export prospects amongst the

developed economies appear far more restrained, with the

share of exports to Europe expected to decline. The US

economy continues to represent the most important market

for Chinese exporters in terms of its absolute size. In terms of

imports, the rest of Asia remains the largest with a quarter of

total Chinese imports.

Ease of trading across borders

Importing a standard container of goods into China requires

Source: The World Bank, Trading Across Borders: Doing Business 2013

5DOCUMENTS

£383DAYS

24

Strengths

World’s second largest economy.

High population.

World’s second-largest trading power.

Weaknesses

Corruption.

Opportunities

Consumption boom.

Middle class population growth.

Threats

High inflation.

Financial reforms.

SWOT analysis

2012 2013 2014-17

GDP 7.7 7.7 7.0

Export of goods and services 3.2 6.5 7.4

Import of goods and services 4.2 8.8 8.8

Inflation 2.6 2.6 2.7

Short-Term interest rates* 4.6 5.0 5.3

Exchange Rate (Per £) 9.96 9.21 8.76

Population 0.6 0.6 0.6

Unit labour cost 8.6 9.8 6.0

MARKET GUIDE

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

UK Rest of Asia North America Rest of Europe

0

5

10

15

20

25

30

35

40

% o

f to

tal im

po

rts

of

Ch

ina

Food, beverages & tobacco

Crude materials & fuel

Chemicals and related products

Manufactured goods

Machinery and transport equipment

Commodities

(Total value £10.75bn)

2%

13%

1%

11%

12%

61%

37%

5%

10%

2%

27%

4%

5%10%

Opportunities for UK businesses

China will remain an important and viable market for a wide range of products and services. As a

drink, renewable energy and financial services. The opportunities are not just in the well-known

Chinese business centres of Beijing, Shanghai, Guangzhou and Shenzhen, but also in numerous

emerging regional centres such as Chengdu, Sichuan, Chongqing, Dalian, Liaoning and Hangzhou.

How China’s imports from the UK compare China’s trade with the UK

UK exports to China (2013) - by major product groups

Sectors to watch:

• Iron & steel • Utilities • Electronic components • Machinery

Sector segmentation growth

Forecast for China’s economic structure (2021) -

Output, value-added, real, % of GDP

Source: Oxford EconomicsSource: Eurostat

Source: Oxford Economics

Agriculture, forestry & fisheries

Construction

Financial & business services

Industrial production excl. construction

Information & communications

Manufacturing

Public services

Retail & wholesale distribution

Customs Top Tips:

China

De minimus value (duty free allowance) = CNY 50 - If calculated duty/tax is under 50 CNY then theshipment is classed as duty free.

China only allows commercial shipments to be sent to a business, and the receiver name, postcode andphone number must be provided. All shippers/receivers must be registered with Chinese Customs andare given a Customs Registration (CR) number. Ensure your customer’s CR number is stated on yourpro-forma/commercial invoice and on any applicable Customs declarations to avoid delays.

Shipments under 794 USD can clear as informal as long as the paperwork provides a detailed description.