Working with China: five-year engagement strategy

Priority Area 1

To increase trade opportunities for Scottish business in China and encourage more Chinese investment in Scottish industry and infrastructure.

TARGETS

• Target 1.1: Double the number of Scottish companies (based on 2010 levels) supported to access Chinese markets by 2017.
• Target 1.2: Increase direct exports to China above the Scottish Government's export target of 50% by 2017 and to exceed this for China based on 2010 export levels.
• Target 1.3: Double the number of major Chinese investors with a presence in Scotland by 2017 based on 2012 levels.

LEVERS

• Utilise Ministerial visits to China to include trade delegations and encourage high-level reciprocal visits to Scotland.
• Increase the visibility of Scotland as a brand associated with high quality, innovation, creativity and world leading capability across our key sectors.
• Increase Scottish Development International's ( SDI) trade support expertise, staff and geographic footprint in China.
• Support our enterprise bodies to promote the investment opportunities that are available in Scotland and China in the energy and low carbon sector.

CONTEXT

China is an increasingly important export market for Scotland and is the top country mentioned by Scottish businesses as a potential new future export market. ^[5]

There are already a considerable number of Scottish companies doing business in China with significant opportunities for more Scottish companies to grow their presence in a range of growth sectors where we have world class products and services and where there is known demand in China. Recent Scottish success stories in the export market include securing Geographical Indication of Origin status for Scotch whisky and an export health certificate allowing direct exports of Salmon to China, which has seen a significant rise in exports to China of both these quality Scottish products.

Scottish companies currently export to China through a variety of channels including the use of partners, agents and distributors and over 50 Scottish businesses currently have a physical presence in China in the form of representative offices, wholly owned subsidiaries or joint ventures. Through SDI international trade will, in particular, focus on the following sectors:

• Food & Drink
• Energy
• Financial Services
• Creative Industries
• Life Sciences

China's Foreign Direct Investment has increased dramatically in recent years and has mainly involved the acquisition of mineral resources and energy. Whilst this mergers and acquisitions trend will continue, we expect more Chinese companies to become Global companies either through acquisition or by themselves through natural expansion.

To facilitate inward investment from such companies, we will position Scotland as the ideal European base for Chinese companies with a focus on our pro-innovation business environment.

Scotland has, and will continue to have, a range of high quality investment opportunities suitable for funding from China. These vary from the low carbon sector to 5-star tourism destination developments. SDI will build relationships with Chinese investment companies and entrepreneurs, utilising cultural opportunities, to fully promote these and help create further investment opportunities in Scotland.