China UK Photo: VCG

UK businesses are stabilizing their investments in China despite challenges, with about 76 percent of UK companies maintaining or increasing their investment in the market and only 8 percent saying that they will reduce their scale, the lowest figure since 2021, a survey released by the British Chamber of Commerce in China showed on Tuesday.

This is the seventh time the chamber has published the annual sentiment survey, and over 300 UK businesses participated in it. 

The report also highlighted a number of opportunities in China's global connectivity and strategic sectors for UK businesses. For example, the survey showed that the China-proposed Belt and Road Initiative (BRI) and expanded freight links are opening new markets for British companies. Those firms are also using China as a regional base, while professional services firms are capitalizing on China's global ambitions by supporting its companies' international expansion. 

According to the survey, UK companies' business confidence has been further lifted by recent high-level meetings between Chinese and UK officials. It noted that optimism in bilateral relations rose following UK Foreign Secretary David Lammy's visit in October, with a record 35-percent of respondents expressing positivity about the relationship.

Julian Fisher, chair of the British Chamber of Commerce in China, told the Global Times on Tuesday those UK businesses that thrive in China now typically "benefit from strong demand for their specialized products and services, underpinned by competitive advantages such as world-leading intellectual property (IP), advanced technology, or their global reach."

Fisher noted that British businesses are being increasingly "pragmatic" in their approach - focusing on areas where they excel and moving away from speculative ventures. 

Chinese observers said that the report underscored a pragmatic and objective attitude among UK companies toward investing in the Chinese market, and also hoped that broader cooperation between China and the UK could lead to win-win results and serve as a cornerstone for stabilizing bilateral relations. 

Zhao Junjie, senior research fellow at the Institute of European Studies at the Chinese Academy of Social Sciences, told the Global Times on Tuesday that the report shows cooperation between China and the UK is "highly complementary and holds immense potential for development."

"While bilateral relations could face setbacks and uncertainties due to geopolitical factors, it is important to note that China-UK cooperation is still advancing and showing momentum of stabilized development," Zhao said. 

The report nevertheless noted that about 58 percent of the British businesses said that operating in China was more difficult this year than last year, and that the business environment has been getting tougher for five consecutive years. Other challenges it listed include "China's economic slowdown and regulatory hurdles." 

Analysts sought to allay certain concerns among UK businesses over China's economic prospects, pointing to the potential huge room for growth of the world's second-largest economy as a package of incremental policies take effect, as well as the country's ongoing opening-up efforts, which are set to offer greater development dividends with foreign firms that are committed to the Chinese market. 

"China and the UK have vast market opportunities for cooperation in the fields of high-tech and industrial innovation, for example in new-energy vehicles, electric vehicles and battery components. If the concerns of each side are properly addressed, it would further cement the cooperation trend and tap into more potential," Zhao said.

The chamber also suggested that UK businesses align with the growth strategies of both countries. According to the report, it called on UK companies to "identify shared priorities to foster collaboration in areas such as clean energy, standard setting and qualification recognition, whilst carefully managing associated risks."