OPPORTUNITY is there to be grasped by Scots businesses, says Mark Harvey
There is an old Chinese saying: opportunities can be found within a crisis. This phrase references how “crisis” is written in Chinese – the word is composed of two characters, one represents danger and the other represents opportunity.
Fluctuations and unpredictable activity in the Chinese economy have raised concerns across global markets, hitting businesses and world trade.
Although the efforts of the Chinese authorities to rebalance the economy from an investment and export-led model to a consumption-driven one may have been viewed negatively by investors, household spending and consumer-led service industries have shown resilience – and offer excellent growth opportunities for UK firms.
Last month £30 billion of deals and investment to the UK were announced, including a £2bn deal between Falkirk-based Alexander Dennis Limited and China’s BYD for the manufacture of electric buses. But there is scope for more business between China and Scotland.
EY’s latest Scotland Attractiveness Survey highlighted a continuing need to build relationships with growth territories like Asia to secure a bigger share of their foreign direct investment (FDI) projects. China is the fifth-biggest source of projects for the UK as a whole in 2014, but does not even rank in the top ten origins for FDI into Scotland.
Scotland is an attractive market for China and with the Chinese government boosting outbound investment, Scottish businesses should consider developing relationships with strategic buyers/investors from China. Sectors that could be of interest for Chinese investment include infrastructure, North Sea oil and gas and technology.
The current situation in China presents both risk and opportunity. Scottish businesses and the wider economy could benefit from navigating the current uncertainty and converting that into opportunity.
• Mark Harvey is an EY partner and market leader for Scotland