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CBBC emphasises opportunities for Scottish firms in China

THE body which helps UK firms build business in China has emphasised the scale of the opportunity for Scottish companies in the world's second largest economy, while highlighting the growth of investment coming in the other direction.

The China-Britain Business Council (CBBC) insists demand for high-quality Scottish goods and services is rising in China as the economy matures and as its consumers become increasingly sophisticated and well-travelled.

Scottish food and drink producers and those offering services in architecture, energy efficiency and the creative industries are among those which can thrive in a market home to 20% of the world's population, CBBC said.

Noting there are 30-plus provinces in China, each the size of Europe, chief executive Stephen Phillips said: "It almost goes to say that the opportunities are in every sector of the economy. But the opportunities are only for companies with a good quality product and service. If you are at the low-end, then competing in the China space is very difficult."

Mr Phillips played down the economic slowdown in China, noting that the annual growth rate of 7.5% targeted by its government is still "incredible".

He contends that conditions are more favourable to the strengths of Scottish industry now than 10 years ago, when the manufacturing and building-led growth and demand for machine tools were more attuned to economies such as Germany and Italy.

Mr Phillips said: "You have a more sophisticated economy where people are looking more for some of the soft skills. It's about design, industrial design, branding, soft skills like marketing and PR which plays much more to the creative strengths the UK has."

CBBC highlighted the case for Scottish food and drink producers in China as consumers travel more and enjoy foreign products.

Scottish seafood was cited as a particular success story, with exports of farmed Scottish salmon now worth £30 million a year.

The prospects for Scotch whisky continue to look in China, in spite of being affected by the clampdown on luxury gift giving by the Chinese Government.

Mr Phillips said: "I think if you look at demand from the normal consumer, as opposed to the public sector, that is still growing very rapidly, but the gift-giving culture was a major driver of luxury goods, no doubt about it."

Beyond consumer goods, Mr Phillips said Scottish businesses are well placed to address issues which have arisen in China as the population becomes increasingly urbanised. These include technology specialists which can help cut pollution or save energy, or design new buildings in a "green and intelligent way".

He added: "Allied to that you have got an ageing population which increasingly needs elderly care. We've done a very big piece of research [looking at] growing opportunities in the elderly care space. [There is] great expertise here that can be transferred from here to China."

Meanwhile, CBBC noted there has been a surge in investment into Scotland from China over the past 18 months. Mr Phillips said Chinese investors, encouraged by the government and by a desire to develop more balanced portfolios following the financial crash, are targeting the Scottish oil and gas and renewable sectors.

Mr Phillips said: "If all your eggs are just in one economic basket, as a growing conglomerate you have more risk than if you diversify your portfolio with exposure to a number of economies."

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