Almost exactly one year after launching our China Desk, our chairman Philip Rodney and I touched down in China earlier this year for ten days cram-packed with meetings with contacts and clients. It was an extremely fruitful trip, split as to half in Beijing and the other half in Shanghai, and it highlighted to us the incredible potential and tremendously exciting opportunities that exist in China in general, and for Chinese-Scottish business relations in particular.
It is over 11 years since I lived in China, and the scale of the changes since then are truly dizzying. It is all too common to think that modernisation means westernisation, but a short spell in Shanghai is all that is needed to realise that the two are not seamlessly connected. In some ways – from the big French brand names that line countless shiny malls, to the Starbucks that seem always to be conveniently located whenever you need a pit stop – Shanghai is certainly very much influenced by Europe and the US. But peer just a little below that surface, and you see that China is taking the bits it likes, and then very much doing things its own way.
The most striking example of this is WeChat. Often simply described as “the Chinese Whatsapp”, it is in fact so much more. Not only do the Chinese use this to catch up with friends, but special groups are created for every purpose conceivable. Every serious product brand has its own WeChat group, and no savvy Chinese consumer makes a big purchase without checking out this space first to get the lowdown before they part with their hard-earned cash – European firms unaware of the importance of WeChat to consumers and the role it needs to play in any marketing campaign have a hard time breaking into the market.
Not only this, but WeChat is used extensively in business, from the first meeting when new acquaintances whip out their mobiles to zap each others’ codes and connect, to instructing lawyers, creating project discussion spaces, and even debating and passing board resolutions. For some senior management, email is a thing of the past and is managed by their secretary along with their snail mail – to get to them direct, you need to be connected on WeChat.
WeChat is also used as a mainstream means of payment, and you would be much more likely to have your payment accepted in a restaurant or department store if you were to present a WeChat barcode on your phone, than I would be handing over my trusty Mastercard which is, in China, usually looked at with a smile, then a slight frown of confusion, and then a shake of the head.
China provokes some very dramatic headlines – most recently comes the news that investment into Europe dropped 87% in the first quarter of this year. It would be naïve to ignore the challenges that face anyone embarking on a China strategy. But it would also be remiss to discount the vast opportunities because there are hurdles to be cleared along the way. China still has over US$3tn in foreign currency reserves, and while current political and currency pressures are pushing in one direction, other official policies – “Belt and Road” and “Made in China 2025” to name just two – are pushing in the other, putting those reserves to constructive and positive use in a way that will occur at an ever increasing rate as those temporary pressures start to ease. Be prudent, yes. But don’t let that cloud the exciting potential – when you’re on the ground, the hunger for investment-ready propositions, the desire to find new and innovative ways to do business, the ability to find an exciting Chinese way to do things, and the positive and palpable energy, are hard to ignore.