The UK’s economic future hinges on increasing our exports to huge markets in Asia, writes Siddharth Shankar, CEO of Tails Trading
As the likelihood that the UK will leave the EU without a deal increases, the economic outlook is looking ever more gloomy. A disorderly Brexit could spell havoc for British trade with the EU, which accounts for roughly half of our exports.
So, if the economy is weak and EU trade is about to get a whole lot trickier, what are businesses supposed to do to stimulate growth? It’s obvious, really: they need to look to growing new markets for British goods, the most promising of which could be in Asia.
The buying power of sterling has dipped, but this has made UK products and services more competitive than ever abroad. In the year to March 2018 our exports totalled £620.2 billion – a record high. Our exports to India and China grew by 31% and 15% respectively.
On the back of this, the government has set out a bold vision of making the UK a “21st-century exporting superpower”. To make this a reality, it has to seek new free-trade deals outside the single market. Where is there room to make such agreements on favourable terms? In Asia. There is huge demand for British goods in countries such as China, which will be willing to sit down and negotiate a deal.
Asia’s middle-class boom
Demand for British goods is increasing across Asia – consumption here is stronger than ever. With rising wages fuelling the fast growth in its middle class, the continent accounts for 60 per cent of the world’s buying power.
The UK has strong historical links with many Asian countries. This sense of heritage could be behind their consumers’ love for British goods. Research published by Barclays Corporate Banking in February 2018 revealed that 64 per cent of consumers in India, 57 per cent in China and 48 per cent in the UAE were prepared to pay more for the perceived higher quality of products made in the UK.
Asia is home to a consumer market of 4.5 billion people, compared with 500 million in the EU. With its potential to become the biggest destination for British exporters, it could hold the key to our economic growth after Brexit.
Tails Trading helps British SMEs to export products to Asia. Visit tailstrading.com for further information