UK fact-finding mission to China

UK fact-finding mission to China

China’s manufacturing industry is in the throes of an ’industrial revolution’ that the UK chemical industry must keep abreast of to take full advantage of what China has to offer, says Judith Hackitt, director general of the UK Chemical Industries Association (CIA).

Hackitt was recently in Shanghai at a meeting organised by the city’s Labour Ministry hosted by the UK’s secretary of state for trade and industry, Patricia Hewitt, along with union and industry leaders.

’For me the key thing was to understand how rapidly industry is expanding in China and to understand the competitive threats to the UK chemical manufacturing industry and market opportunities for the chemical industry,’ Hackitt told Chemistry World.

’To be invited on this trip is a huge coup for the chemical industry. The visit underlines the real importance which the government attaches to the future of the UK’s chemical sector,’ Hackitt said. ’The visit also provides a very welcome opportunity to engage face-to-face with a number of our major stakeholders at the same time.’

The visit is timely; the UK chemical industry’s investment in China is over $15bn (?8.06bn), according to British government statistics. Petrochemical majors such as Shell and BP are nearing completion on joint venture projects in Guandong and Shanghai, respectively, and other UK-based firms including BOC Edwards and ICI have partners in China. Meanwhile smaller UK manufacturers may already be feeling the squeeze on profits due to competitive imports from China.

Manufacturing facilities of UK-based companies were on show at ICI Swire Paints and the B&Q do-it-yourself chain. Delegates also visited Bao Steel, a local steel manufacturer with an integrated downstream chemicals business. Hackitt was impressed with the working practices on display, though she recognises Shanghai ’is at the front end of the development curve - standards might not be as high elsewhere.’ Work practices and environmental standards are one potential export area from West to East, she notes.

Opportunities for industry are huge with China’s rapid growth rate, says Hackitt. ’Spending power among the population is growing - this creates an opportunity for industry too because it is at the top of the supply chain. For [CIA] member companies, they need to consider what - for their business - is the best way to interact with the market.’

Another potential asset Hackitt sees is China’s workforce, with a growing number of graduates in science and technology. But while it might be relatively affordable, she warns, labour costs are increasing.

Last year, China contributed a third of all growth in the world economy. The UK is China’s largest European investor, and bilateral trade between the two is worth ?10.4bn, having grown by 24 per cent between January and July 2004, compared with the same period last year. China’s growing industrial presence commands serious attention.

Helen Carmichael