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The Building Blocks of Trade

The Building Blocks of Trade
 
     
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By the end of 2013, northwest England should have a new international trade centre full of Chinese goods ready for sale into the European market, all thanks to the initiative of CBBC member The Peel Group.
Lindsey Ashworth had this particular flash of inspiration returning from one of his many China visits, this time to the Yiwu trade centre which hosts 60,000 businesses holding year-round product displays to attract both domestic and international buyers. Intrigued, Ashworth decided to create a European centre, closer to one of China’s largest export markets.

Ashworth had also become increasingly impressed with the growing quality of Chinese-made goods. A trade centre in Europe would help to promote the right reputation of Chinese manufacturers globally. He draws comparison with another one-time cheap manufacturer. “For years, Japan’s products were known for their poor quality before they decided to go upmarket,” he notes. “It took Japan decades to come to this realisation. China has an opportunity to accelerate that process.”

By the time Ashworth had disembarked in Manchester, the idea had evolved into a clear business prospect. By the end of 2013 this centre should be open for business.

Peel’s Ambition

A leading UK infrastructure, transport and real estate company with a special northwest focus, the Peel Group owns – among other things – Liverpool’s John Lennon Airport, Manchester’s? Trafford Centre, Salford’s MediaCityUK and the Manchester Ship Canal. The Peel Group has already acquired planning permission to build an international trade centre on17 million square feet of Wirral’s derelict docklands, the other side of the Mersey from Liverpool.
This international trade centre will enable companies from around the world to exhibit, sell, assemble and distribute their products into the UK and Europe.  The £200 million project will be divided into four phases, with its initial phase focusing on Chinese business.

The project has also found favour with the UK government, since it supports exports as well as help contribute towards local regeneration. Mersey Waters, which includes the Wirral site, has been designated one of the four “Enterprise Zones” in the UK.

Securing a Chinese Partner

However, while Peel had the capacity and the financial resources to build the project on its own, securing cooperation of a Chinese partner would mean not only investment but also access to and vetting of Chinese businesses keen to take in the centre.
Another draw to any Chinese partner, besides the links between twin cities Liverpool and Shanghai, is the region’s historical reputation as an industrial and trading hub since the 19th century. The area is also home to two of the world’s biggest football clubs, Manchester United and Liverpool, both of which arguably have more supporters in China than in the UK.

Peel’s partner is the Zhangyin-based Sam Wa Minerals, who, although their primary business is mining, was keen to participate in the trade centre. The company has offered half the total investment and is currently lining up and/or screening potential tenants. “We are looking for a good mix of tenants, those that are likely to pay, likely to stay and likely to have products that appeal to the European market,” explains Lindsey Ashworth. Peel is also sounding out Chinese banks about lending towards the project.

Welcoming Tenants

The next steps will involve securing commitment from prospective tenants. Peel Group has developed a sophisticated e-book and website that serve as a targeted marketing campaign containing information about business in the UK, visas, immigration, taxes and establishing companies, as well as Britain’s living and working conditions.
Peel hopes that the international trading hub will generate Chinese interest in their other area projects. Their extraordinarily ambitious scheme of development is worth around £50 billion over the next half-century and stretches over 50 miles to help create what the company calls the “Atlantic Gateway.”
“The trade centre is a test case.  The banks are interested because they are looking at our future projects. We believe we are an ideal partner; the Chinese appreciate that we are privately owned and can take decisions quickly. We also own the land and have the vision for massive development,” says Ashworth. “The potential is enormous.”

Take Note

As a unique project, the International Trade Centre involves specific considerations. Nevertheless, some axioms apply across the board for any UK company keen on doing business with China. Lindsey Ashworth offers three immediate lessons:
“Don’t go with preconceived ideas. When I went first, people told me that the Chinese had no sense of humour and did not drink; I found exactly the opposite!
“Make sure you are able to visit regularly and show your face. Just using emails doesn’t work.
“Build up trust. Don’t expect things to happen overnight. In my case, I have been holding regular meetings with Stella Shiu, my opposite number in Sam Wa, for close to two years.  Each meeting advances that feeling of understanding and trust.”

A side view of the International Trade Centre in Wirral

 

 

 

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