We speak to a UK aerospace company that is capitalising on local talent in Chengdu, China, and a Chinese media company’s culture shock on breaking into the UK market
Sigma moved into China in 2006 to increase its cost-effectiveness and to be closer to the Asian markets
Mark Johnson (pictured) is the founder of Sigma Precision Components, a Hinckley-based aerospace engineering firm with 150 employees in Chengdu, China, and a major contract to supply engine parts to Rolls-Royce. He explains why he brought his company to China in 2006.
“Sigma was set up to take advantage of the changes that were taking place in the aerospace industry. Initially, we set up our facility in China to manufacture simple parts, build them into other products in the UK and sell them on to our end customer. It gave us a significant competitive advantage and growth.
“While people initially feared we’d lose jobs in Europe while transferring them to Asia, the opposite was the case. More recently, the industry has become more regional and it’s become important to access the growing markets – particularly those in Asia.
“We came to Chengdu because there’s an established aerospace industry of about 50,000 people with a well-developed skill set. There is strong government support for what we’re doing and the city is developing very quickly. The infrastructure is excellent – the investment China is putting in far exceeds anything we saw in other emerging markets, such as Brazil and India.”
You can hear more from Mark about expanding into China in What are the business opportunities in China? and Five things to consider before expanding your business in China.
China Daily newspaper was founded in Beijing in 1981 to cater for international visitors. Now the UK version provides a perspective on China for Europeans
Songxin Xie (pictured) was Chairman of the Board when the China Daily European Weekly launched in 2010 in London, creating 32 new UK jobs. Now working with China Daily in Africa, here he explains the newspaper’s strategy for the European market, some of the differences between British and Chinese business culture, and why China offers a growing opportunity for trade with the West.
“The growth of our circulation to 120,000 has been faster than we expected. Our approach is to take a local perspective on business stories, with an explanation of the consequences, so there are seven versions printed around Europe.
“Doing business here is so different from the way it is done in China. Everything is so slow here; it took a while to get used to the UK’s lack of efficiency. If you applied to get your broadband installed in China, it would take two days, whereas here it might take a month.
“But it’s been a learning curve for us and we have reduced the culture shock by minimising the number of people sent over from China and recruiting as many local people as possible. We have also adopted the local trade practices, such as registering with the Audit Bureau of Circulations.
“Many of the UK companies that I’ve spoken to are keen to enter the Chinese market, as it is growing very fast. The quality of life of the Chinese people has improved considerably in the past few years and has spurred demand for imports. At the same time, the government is encouraging consumption to offset the fall in exports, and the result is a huge opportunity for international companies of all sizes.
“The infrastructure in the central and western areas of China is good, and there are discussions about the ‘Euro-Asian land bridge’ – a rail link from Chengdu, through Russia, to Europe. It is, if you like, the new Silk Road.”
Images: Rama Knight