International network: monitoring and evaluation report 2022-2023

China

Context for 2022/2023

The Scotland in China Network is a partnership between the Scottish Government and Scottish Development International with the purpose of strengthening our political, economic, culture, education, and social relationships with China in keeping with our values. The network includes 4 full time members of staff (one diplomat and three country-based staff) working for the Scottish Government Office (SG) in Beijing, and 13 full time members of staff (all country-based staff) working for Scottish Development International (SDI) in Beijing (4), Shanghai (6), Guangzhou (2) and Hong Kong (1). All offices sit on the FCDO platform providing both security, office space/facilities, along with the opportunity to collaborate closely with the wider UK Network in China on issues that matter to and benefit Scotland. In order to ensure that our economic, diplomatic and cultural activity is focused on the Scottish Government’s priorities of tackling the dual climate and biodiversity emergencies, supporting economic recovery, ending child poverty and reducing inequalities, we arrange our work across three pillars: climate and environment; people-to-people links (education, culture, tourism, social responsibility policy); and trade and investment.

Reflections

For the majority of the period, until December 2022, China’s Zero Dynamic Covid policy impacted on our ability to travel, hold in-person events, and meet people face-to-face. We managed this through virtual events and activity, increasing our reach on social media channels, and where possible facilitating engagements at international multilateral events. Examples included hosting a Biodiversity Roundtable virtually to pave the way for meetings between Scottish and Chinese delegations at COP15; starting a new social media series of ‘Great Scots in China’ to illustrate some of the roots of our enduring people-to-people links; and paving the way for some Scottish brands to sell on Chinese e-commerce platforms for the first time. From January onwards, we focused on re-invigorating our relationship including through visits to Shanghai, Guangzhou and Shenzhen; and hosting and supporting a series of events to promote Scottish culture, produce, priorities and build links with our key stakeholders including alumni. This included three postponed St Andrew’s Balls in three locations over three consecutive weekends in March with a total of over 800 participants.

An ongoing challenge with a particular impact on trade and investment is navigating the geopolitical context given many projects extend over several years. In our company interactions we also note an increase in geopolitical concerns posing a barrier to companies and their senior management having confidence to trade with China or invest in the UK.

Reputation

We focused on raising Scotland’s profile on a wide range of issues including culture and festivals, climate change & biodiversity and social policies through visits, events and social media promotion. We continued to engage diaspora groups to celebrate Scottish traditions in China and showcase the best of Scotland by promoting key themes across a series of events. Some examples include promoting:

• tourism as part of our sponsorship of the Beijing Scottish Society’s St. Andrew’s Day celebration in step with Visit Scotland, and to encourage tourists to start travelling to Scotland again post-Covid.
• sustainability and protecting the environment at an event for alumni in Beijing including sustainable whisky brand.
• culture, food and drink at our official Burns’ Night in Beijing including brands breaking into the Chinese market.
• higher education opportunities in partnership with Scottish higher education institutions at the Highland Games event we sponsored in Beijing; and fostering alumni links through dedicated events hosted by us and sponsoring and supporting Alumni Society hosted events in Beijing, Shanghai and Guangzhou.
• 15 million impressions
• Ministerial engagement tweets generated 2.47 million impressions, up 48%
• Burns Night vlog gained 5.18 million impressions & 583 new followers
• 63 posts on climate and biodiversity generated 1.45 million impressions
• China’s top print media coverage on Fife’s green hydrogen project
• 200 mentions in Chinese media articles

192,800 followers on Weibo & WeChat, up 13%

Case study: Engagement with Local Government

As we reinvigorated our links post-Covid, we focused on engagement with Provincial Governments and major cities outside Beijing, including visits to Zhejiang Province, Shanghai, Guangzhou and Shenzhen. Each visit served a multiple purpose. In Zhejiang, SG and SDI partnered to showcase a portfolio of whisky and premium lifestyle products targeting the luxury market; and to promote people-to-people links and cultural heritage. In Shanghai, we focused on re-engaging alumni, the Shanghai branch of the Friendship Association to discuss cultural links and future opportunities to showcase Scotland, met Scottish businesses along with SDI and supported Shanghai British Chamber’s Burns night. In Shenzhen and Guangzhou, China’s third and fourth largest cities by GDP respectively, we met local government officials to discuss Shenzhen-Edinburgh twinning relationship and upcoming opportunities, visited the Shenzhen side of the Edinburgh-Shenzhen Creative Exchange (joint incubator for creative and tech sectors), and engaged with alumni.

• 4 provinces/ cities visited after 3 years of isolation during Covid
• Through Zhejiang Province visit:
  • Showcased portfolio of 9 whisky and premium products, leveraging opportunity for listing in small chain of luxury resorts in China targeted at high-net individuals.
  • Launched ‘Great Scots in China’ series on social media to promote people-to-people links, starting with Scottish doctor who established medical facilities in Zhejiang in early 20^th century and built a castle in the ‘Chinese highlands’ in Moganshan to illustrate how Scottish people linked with Chinese communities and how the links have endured.
  • Created links with local government and businesses that we can build on in future.
  • Enhanced coverage through SG and SDI social media channels, gaining nearly 32,000 impressions.

International Trade

We continued to support and enable Scottish companies to trade with and compete in China by facilitating secure and profitable routes to market, while continuing to expand our proprietary network of buyers and partners to offer more market entry options to Scottish exporters. The impact of Covid on 2022 meant almost no international travel, however, whisky and salmon exports continued to rise with China becoming 5^th and 3^rd largest markets respectively. We also saw new brands sell on Chinese e-commerce platforms for the first time. We continued to develop Scotland’s reputation in offshore wind and hydrogen with one Scottish company posting record revenue. We continued to build a pipeline in Fintech and Medtech. China continues to be a challenging market given Chinese Government emphasis on domestic industry and reducing reliance on foreign technology. However, where Scotland has a clear advantage, such as in decarbonisation technology and other innovation, we continued to see doors open to us.

SDI Social Media:

• 43 WeChat posts (Facebook equivalent): 10,487 Total page views.
• 32 Weibo posts (Twitter equivalent): 246,816 Total page views.
• 103 companies supported
• 105 international trade opportunities identified
• £37,500,000 forecast international sales as a result of SDI support

(Figures include Hong Kong)

Case study: Fintech

Due to Covid, 2022 was a very challenging year as China was not a top priority for Scottish Fintechs given travel restrictions. This led the team to trial a new approach. With support for the S&T Asia and the Sector Team in Scotland, China Fintech team launched a series of initiatives for scoping opportunities in China with an aim to attract more attention and interest from Scottish Fintechs. We started with a focused market research on Fintech Opportunities in China and the Greater Bay Area (the Peral River Delta area consisting of Hong Kong, Guangzhou, Shenzhen, etc.), shared the research report with the Scottish Fintech community during the Scotland Fintech Festival and promoted the opportunities through various channels such as social media, events and activities organized by SDI and partners. We also attended the Fintech Exhibition at the 16^th Shenzhen International Financial Expo to showcase Scottish Fintech capabilities, which drew great attention from the local media and industry and thus raised awareness of Scotland as leading Fintech cluster in Europe.

Outputs and outcomes:

• a focused market research project conducted with various opportunities identified in payment and transfer, wealth management, open banking and Regtech etc.
• Over 20 1-2-1 follow-up sessions on specific opportunities from Chinese companies which resulted in 5 successful business matchings for Scottish companies such as FNZ, BR_DGE etc.
• Scottish Fintech Exhibition at trade show to showcase Scottish Fintech capabilities and raise awareness of Scotland which attracted 5 local media and 1,000 visitors
• a focused China briefing session and a further 5 postings on social media to promote opportunities in China and Fintech ecosystem in Scotland.

Research and Innovation

When the tight Covid restriction measures continued in China during the first 9 months of the financial year of 2022-23, it was difficult for any organisation to deliver in-person events including Scottish universities. The SGO Beijing fostered cooperation with existing partners to incorporate the higher education theme in events and social media posts whenever possible to increase the visibility of Scottish universities. One of our most successful vlogs of the year was our interview with Scottish alumni, filmed alongside an alumni event we jointly hosted with the Embassy’s Chevening Team. We interviewed ten graduates from 8 Scottish universities who shared experience of living and studying in Scotland. The remarks highlighted the warm welcome they felt in Scotland to the high quality of teaching. The vlog gained 1.4 million impressions on Weibo.

• In-person and virtual engagement with 12 Scottish universities
• 4 in-person alumni events in Beijing, Shanghai and Guangzhou
• 19 posts on Higher Education throughout the year on social media, generating 1.71 million impressions
• 10 posts on Research & Innovation, with 93,000 impressions

Case study: Promoting Higher Education Links

In Scotland, 25% of international students in higher education are from China. Throughout Covid, the numbers remained steady. Many students return to China to work and want to stay in touch with Scotland and Scottish culture. They become de facto ambassadors and help us to maintain Scotland-China links. The SG Office supported universities to reach out to potential new students and continued to foster our links with alumni through:

1. SGO and SDI China jointly sponsoring the Highland Games in August in Beijing. The event was Scotland’s biggest public in-person engagement of the year, attracting 1,000 participants.

2. Hosting and sponsoring 4 alumni events in Beijing, Shanghai and Guangzhou including a Scottish Connections: Alumni Event in February.

Highland Games in Beijing

• Coordinated Scottish higher education showcase, attended by seven Scottish universities and institutions.
• Promoted Scottish food and drink suppliers in China including whisky.
• Show cased traditional sports and ceilidh dancing, attracting a bigger audience through social media
• In 2023, acting on positive feedback we will continue to promote branding, raise profile of Scottish companies, higher education and to connect with alumni.

Scottish Connections: Alumni Event in Beijing

• Engaged with over 70 graduates from 12 universities, including those who travelled from Shanghai and Shenzhen specially to join the event.
• Showcased climate change theme, including key speech from alumnus of Dundee University now working for a key energy company in China.
• Promoted sustainable whisky brand, linking with SDI, along with whisky tasting and talk on how Scottish distilleries have adopted sustainable approach and production.
• Created linked-vlog illustrating alumni experiences of living and studying in Scotland, generating over 1.4m impressions.

Investment

Across the Asia Pacific the Inward Investment Strategy is focused on Net Zero and targets offshore wind, hydrogen and low carbon heating. China is a key target country within this focused programme of work and has relevant major companies in each of these areas. The Asia Pacific Inward Investment team works across the Asia Pacific region to share learnings gained as we target similar companies to continually improve our Consultative Sales approach. A good example of the effectiveness of this approach has been seen in the way we target companies that can invest in the development of the capability to design, build and operate facilities to manufacture and assemble floating offshore sub-structures.

The consultative sales approach allows us to co-develop opportunities and then effectively progress them through the sales stages of the project irrespective of the sector in which they fall. A good example is the successful landing of the life science company Accubio’s investment in Alva with 125 jobs.

• 3 inward investment projects landed as a result of SDI support
• 530 planned total jobs
• 530 jobs created/safeguarded paying RLW
• £2,100,000 planned capital investment

Case study: Offshore wind and hydrogen supply chain, Foreign Direct Investment (FDI) approach in China

In FY2022/23 we continued to focus our FDI approach on Chinese offshore wind and hydrogen supply chain companies. Targeting key supply chain gaps which could be appropriately addressed through FDI including the manufacture and or assembly of turbines blades floating substructures sub-sea cables and electrolysers.

Some outputs and outcomes of the year include:

• We presented Scotland’s OSW market opportunities at the top offshore wind conference in China with 600+ audience. Top Chinese companies are now well aware of strength and the supply chain opportunities in Scotland, which helped built up the investment pipeline.
• Through awareness raising activities including organising a hydrogen HPO webinar with DBT and promoting hydrogen investment opportunities through our social media channels. 10 potential investors, in particular Chinese electrolyser manufacturers, are now well informed and engaging in discussions.
• The success of this awareness raising, and targeted client outreach is evidenced by the very strong inward investment pipeline that has been built-up and deep engagement with key potential Chinese companies particularly on turbine and blade, floating substructure, and subsea cable manufacturing. The projects have delivery timelines spanning 1-3 years with each potentially creating several hundred jobs in Scotland.

Scotland’s Interests

Through a range of engagements and events, we promoted Scotland’s goal for a just transition to net zero and ‘whole of government’ approach to tackling the dual climate-biodiversity crisis. We also promoted Scotland’s values and the importance of social inclusion through development of social enterprises. This included, but was not limited to:

Edinburgh Declaration: through targeted discussions, and in partnership with ICLEI, Kunming signed the Edinburgh Declaration. This was a key milestone in our advocacy of the Edinburgh Declaration, and paved the way for future discussion and collaboration with China on protecting biodiversity including at COP15.

Webinars (a way to connect when in-person events were not possible):

• through co-hosting with the China Youth Climate Action Network (CYCAN), we show cased Scotland’s approach to a just transition and importance of local communities and youth taking environmental protection action. Two distilleries supporting sustainable production presented their approach to local industrial transformation to over 100 participants. The Weibo live stream attracted over 7,000 views and generated 90 comments.
• through a partnership with the Social Enterprise Academy China, we introduced Scotland’s approach to supporting the development of social enterprises inside and outside Scotland to over 80 NGO participants from across China. Participants were keen to learn about Scotland’s world leading social enterprise support ecosystem.

• 18 GlobalScots in total
• 1 new GlobalScot recruit in 2022/23

Case study: Biodiversity

China’s Presidency of COP15 was a good opportunity for SGO to engage on biodiversity protection and ensure local government had a voice. We:

• worked with ICLEI (Local Governments for Sustainability) to help build links with local government, focusing on Kunming, and paving the way for greater advocacy through Edinburgh Declaration.
• co-hosted the Scotland-China Roundtable on Biodiversity virtually with ICLEI and Kunming local government in November before COP15.
• engaged NatureScot, Royal Botanic Garden Edinburgh, Kunming Institute of Botany (KIB), Chinese Academy of Sciences experts.
• coordinated bilateral meetings between Scotland and Kunming at COP15.
• facilitated Ministerial-level participation at each other’s side events at COP15 (Edinburgh Declaration, China Day).
• used social media channels during COP15 to promote SG’s position on biodiversity and the ministerial engagements.

Outputs and outcomes achieved included:

• Continued engagement on biodiversity despite Covid restrictions at a crucial time ahead of and during COP15.
• Lessons, practical steps and key messages and goals experts hoped would be covered at the conference shared with Minister in advance and paving way for further constructive discussion at COP15.
• Building links and relationships for future including between Ms Slater and Mayor of Kunming.
• Strong networking developed at COP15 with participation on panel discussion at the Edinburgh Process side event hosted by SG; and SG participation in China Day.
• Wider impact on social media achieved with 442,000 impressions.
• Key links with local government the SG Office can build on in future on biodiversity and wider issues.

Medium to long-term impact

There are six twinning agreements between Scottish and Chinese regions, cities and towns. These tend to be between local authorities, and perform an important function to help maintain and build people-to-people links, cultural and sporting exchanges, and opportunities for businesses. An example is the twinning relationship between Shenzhen and Edinburgh. Shenzhen has a population of about 20 million. In 2022, its GDP was 3.24 trillion RMB (about £380 billion), ranking 10th in the world and 5th in Asia. It hosts more than 100,000 foreign enterprises. It was one of the first cities in China to embrace a low-carbon approach and set up a Carbon Exchange. 2023 marks the 10-year anniversary of the first MoU signed between Edinburgh and Shenzhen (Guangdong Province).

2013 – Lord Provost of the City of Edinburgh Council and Deputy Director General of Shenzhen Municipal Bureau of Culture, Sports and Tourism signed MoU on Establishment of Edinburgh-Shenzhen International Creative Industry Incubation Centre. This was witnessed by the then Scottish Minister for External Affairs and International Development, Humza Yousaf.

2015 - Edinburgh-Shenzhen Creative Exchange (ESCE) established to provide incubator and soft landing space for the creative and tech sectors from each city.

2017 – the then Party Secretary of Guangdong Province, Hu Chunhua, visited Edinburgh on a visit to the UK, accompanied by a business delegation and political leaders from Guangdong. The visit included a visit to Edinburgh University’s Centre of Robotics. When the then First Minister, Nicola Sturgeon, visited China in 2018 she met Hu Chunhua who was at that point China’s Vice Premier.

2018 - Merchiston Castle School opened its first overseas campus in Shenzhen.

2019 – the then Lord Provost of the City of Edinburgh and Mayor of Shenzhen signed a twin-city agreement.

2023 – SG Office visits Shenzhen, and along with SDI met local government officials to discuss upcoming opportunities to build on the relationship and in particular links with Edinburgh. We visited the Shenzhen side of the Edinburgh-Shenzhen Creative Exchange run by the Doctorate Association including a tour of one of the companies that has benefited and sits on the platform, Moying Technology (a robotic spin-out from the University of Edinburgh’s Centre for Robotics).

Relationships and connections are built up over several years, between people-to-people, businesses, local government and Ministers. There is lots of scope to continue to build the links between Edinburgh and Shenzhen, Scotland and China. In 2023, we expect in-person visits between the two cities to resume. The links bring benefits to Scotland, whether it is supporting SMEs and tech companies to get a foot on the ladder (like Moying Technology) or providing Scottish businesses to find a base in China (like Merchiston Castle School) or agreements to facilitate research exchanges (like the agreement between Edinburgh University and Shenzhen Peoples’ Hospital on diabetes) or to explore potential investment opportunities (like SDI’s scoping visit to Shenzhen in February on hydrogen).

Lessons learned for FY2022/23

Against the backdrop of Covid restrictions and pandemic, we learned how to adapt as a network in order to continue to operate and deliver our objectives. Our top priority was protecting staff welfare, and providing support for one another through our network. We all learned how to change plans often at short notice and be ready to respond to situations that could change quickly, including coordinating and collaborating with the overarching China Network and when in crisis mode. We sometimes having to postpone, cancel or change events at short notice. We became more adept at running hybrid and virtual events, and using our social media channels to maintain and build our people-to-people links and utilise more fully across such a vast geography. It was a difficult period, but these are all lessons and skills that we will retain and help us as we seek to reinvigorate our links and increase engagement in the year ahead.