Ignoring China and India at our peril

LAST Wednesday I attended a fascinating talk at the Hilton Hotel in Cardiff, organised by the Royal Bank of Scotland, on the future of business in Wales. The speaker was Professor Richard Scase, and he gave an overview of the major global economic trends that would take place over the next 20 years and the impact of these upon the Welsh economy.

Like many in the audience, I was overawed by the facts about China and India, and their growth as economic superpowers over the next 10 years. For those of you who were not there, consider the following.

The increased wealth of China has meant that the rural poor has declined from 49m in 1997 to 28m in 2004, creating a more prosperous society that is demanding consumer goods and services. For example, the growth in retail sales in China is increasing at more than 10% every year, and there are now 650m phone-users and 100m internet-users across this vast country.
The sales of cars are already over 1.1m units per annum and there will be 1.1bn cars being driven in China alone by 2031 (as compared to a current world fleet of 800m cars). More importantly for Wales perhaps, there will be over 100m Chinese tourists around the world in 2015. Only a few years ago, travel was limited to the favoured few within the Chinese Communist Party.

Similarly, India is growing exponentially, and is set to overtake the UK in economic terms in 2022, and Japan 10 years later. It already has 70m people on the average UK wage, and this will increase to 120m by 2015. India already has more IT graduates - 60m - than the entire population of the UK, and is adding to this total at the rate of one million per year.

Currently, both these countries account for over 2.5bn of the population of the world and are already the place to do business.

Yet here in Wales, there is very little going on to make a significant difference to our trading relationships with these nations. At a time when Welsh companies should be flying over weekly to both India and China to create new links and establish new trading relationships, there seems to be very little going on.

Perhaps the most disturbing story about our relationship with business in these countries comes from an appearance by Sir Terry Matthews at the Cardiff Business Club. Wales's most successful entrepreneur asked the audience of leading businesspeople how many had recently visited China and India, and only a couple put their hands up. In contrast, most had visited the United States in the previous six months.

Certainly, if we look at what the Welsh Assembly Government is doing, we find that there is only one trade mission being organised by International Business Wales to each country between now and the end of the year. Remember, this is the same government that recently advertised for the job of International Business Wales vice-president for Australia and New Zealand. Their priorities are therefore to pay someone up to £50,000 per year to cover a population of 24m people whilst fast-growing provinces and regions in both China and India are largely ignored.

I have previously asked the Assembly Government to take our links with China and India far more seriously. Not surprisingly, this call continues to fall on deaf ears. So, can I again urge the Department of Enterprise, Innovation and Networks to invite the China-Britain Business Council to set up in Cardiff? It is a scandal that the primary organisation for promoting trade links between the UK and China has offices in London, Manchester, Cambridge, Leeds, the East of England, and in nine Chinese cities, but no presence in Wales.

Similarly, our politicians and ministers should be undertaking detailed discussions with the Indian High Commission to examine how Welsh businesses can work more closely with their Indian counterparts.

The economies of India and China should be ignored at our peril. If we as a nation are to build a more competitive "best in class" economy, then efforts must be focused on ensuring that Welsh businesses maximise their opportunities within both countries, otherwise as sure as the sun rises in the East, our competitors will.

Popular posts from this blog

THE IMPORTANCE OF FRANCHISING

THE IMPORTANT IMPACT OF STARTUPS ON THE WELSH ECONOMY

UNIVERSITIES NEED TO BE AT THE HEART OF THE ECONOMIC RENAISSANCE OF THE WELSH ECONOMY