Special Feature
Investing in the UK
Investing in the UK <br/>投資英國

Investing in the UK <br/>投資英國

Chris Woodward (left), Director General, TID for Business & Trade, and Jonathan Marshall (right), Consul, Head of Economic Section, at the British Consulate General Hong Kong, provided an interesting update on the business environment in the United Kingdom.

Members got an interesting update on the business environment in the United Kingdom at a talk on 3 May, led by Chris Woodward, Director General, TID for Business & Trade, and Jonathan Marshall, Consul, Head of Economic Section, at the British Consulate General Hong Kong. The session, which explained the realities of trade with the UK post-Brexit, was hosted by the Europe Committee Chairman Davide de Rosa. 

Despite the economic challenges around the world, FDI into the UK grew in 2022, while its global exports jumped 24%, to 837 billion pounds in the 12 months to February 2023. Hong Kong was the UK’s 14th largest trading partner in the four quarters to the end of Q4 2022, accounting for 1.7% of total UK trade.

Amid geopolitical tensions and a poor global economic outlook, Woodward shared the five key objectives of the UK government’s business and trade department: removing barriers to trade – helping more UK companies sell to more countries; growing UK exports every year, selling over a trillion pounds worth of goods and services to the world per year by 2030; making the UK the top investment destination in Europe; sealing high-quality trade deals, including with India, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP); and defending free trade and standing up to protectionism.

Woodward said that within a year of leaving the EU in 2020, the UK signed a EU-UK TCA, and as well as trade agreements with all of the trade partners, while new FTAs were inked with top partners such as Australia and New Zealand.

By end 2021, the UK’s inward FDI stock levels reached 2 trillion pounds, up 83 billion pounds compared to the previous year, while outward FDI stock reached 1.8 trillion pounds. Data shows that the UK has the highest FDI stock in Europe and the second-highest in the world after the United States.

Woodward said top reasons to invest in the UK include access to finance, with established financial systems offering grants, incentives and loans. The UK also offers a range of investment schemes designed to provide companies with access to equity finance by encouraging investment in SMEs. The tax environment is also conducive to business, with a tax rate of 25% that is the lowest in the G7. As for innovation and research, as set out in the 2023 Spring Budget, the UK Government is supporting growth in sectors of the future, pursuing its aim of capturing a share of growing global markets in sectors like green industries, digital technologies, life sciences, creative industries, and advanced manufacturing.

The country’s export strategy "Made in the UK, Sold to the World,” launched in 2021, has served to expand its export support service, which has launched among other things a pilot trade show programme to help SMEs exhibit in international trade shows. UK export finance products have also seen an expansion, making it easier to secure business from overseas buyers. Four new trade investment teams have been established in Scotland, Wales, Northern Ireland and the Northeast of England to extend opportunities for international trade around the country.

An Office for Investment – a joint Department for Business and Trade and Number 10 Policy Unit – has been set up to land top-tier investment across the country. The UK hosted the Global Investment Summit in October 2021, showcasing the country as a leading destination for high-profile investors, with more events planned in the future. An investment atlas has also been launched to help potential investors to navigate the UK’s investment environment. 

The UK and Hong Kong already have a strong link in financial and banking services, said Woodward. The UK is the fourth-largest investor into Hong Kong, with plenty of room to expand particularly in sectors like energy, transport, health, education, retail and infrastructure. Since January 2023, a growing number of business delegations from the UK have visited Hong Kong after the limited travel opportunities of the last three years due to the pandemic. As the challenge remains around perceptions of Hong Kong as an attractive destination for investment, it is important to work closely with the business community to promote the city as a key place to continue to do business, he explained.

Marshall reiterated the importance of engaging in-person after the restrictions of the pandemic: connecting with businesses is critical to understand local sentiment and key policy developments, especially now as it is business as usual. As Hong Kong and the Mainland have opened up, senior delegations have been visiting on both sides, including HKSAR Secretary for Financial Services and the Treasury Christopher Hui. Hui was in the UK in April, where he shared the opportunities in terms of financial services brought by Hong Kong to the UK, and also met with senior officials of the country.

On UK’s China policy, Marshall said that in 2021 the UK government set out a review of its foreign policy in defence and security arrangements, recognizing shifts in the geopolitical landscape and articulating a new position post-Brexit. In particular, there is a tilt towards the Indo-Pacific, in recognition of the economic centre of gravity shifting to the region. Despite differences in certain policy areas, the UK underlines the importance of engagement and better cooperation with China, which is the world’s second-largest economy and is a member of the UN Security Council. Marshall explained that the three-pronged strategy – Protect, Align, Engage – covers the security of supply chains and financial structure; recognizes the need to work closely with partners; and prioritizes engaging with China. 

The UK regards its relationship with Hong Kong as broad and deep, based on pragmatic cooperation, said Marshall, adding that feedback is crucial, with more dialogue needed with the Hong Kong business community to strengthen historic ties and promote opportunities. Going forward, as two international financial centres, both destinations can share expertise especially on sectors like green finance, fintech and opportunities in the GBA, he added.

Top

Over the years, we have helped businesses overcome adversity and thrive locally, in Mainland China and internationally.

If you want to take advantage of our network,insights and services, contact us today.

VIEW MORE