BRITAIN is well behind its competitors in taking advantage of China’s impressive growth over the last decade, a top economist said yesterday, and it “will not be easy” for UK firms and the government to rectify that as China’s import growth begins to slow.
China’s growth has been largely investment led in the past decade, benefiting exporters of raw materials and capital goods such as Australia and South Korea and leaving the UK behind, according to analysis from Legal & General Asset Management’s Brian Coulton.
However, the share of GDP made up of consumption is starting to rise – a sector which uses fewer imports, meaning there are fewer opportunities for western nations to boost GDP by exporting to China.
Furthermore, it also means politicians like George Osborne who have publicly called for increased exports to the country must rapidly adapt their ideas of what China will need from abroad.
“The shift to more consumer-oriented growth will make it harder for foreign companies to penetrate the Chinese market and will raise the premium on having a presence on the ground,” he said.