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<\/a><\/p>\nOver the past year, we have seen a gradual rapprochement of Western relations with China, including the UK, after a few years of tense relations and largely constructive introspection. This was particularly the case over the last four months with James Cleverly\u2019s visit to Beijing<\/a> and the Biden-Xi meeting in San Francisco. And March\u2019s Integrated Review refresh<\/a> helped to provide some much-needed structure to the UK government\u2019s approach to relations with China.<\/p>\n The volume and seniority of inward visits coming to China has been high and sustained throughout the year, with global executives, state leaders and the trade delegations making their way here. The last quarter of 2023 felt much like 2019 in terms of business programming and traffic flow in China.<\/p>\n Meanwhile, the landscape remains mixed for British businesses operating in China, with three distinct investor profiles emerging:<\/p>\n 1. Confident and investing:<\/strong> This group consists primarily of the largest UK investors in China as well as those with significant market share or revenue exposure. In most cases, this group operates local business units that have grown over multiple decades. A sizable number of SMEs with strong market fit also fall into this category. Larger investments by this group that CBBC has supported in 2023 range from $100 million (\u00a378.4 million) to upwards of $1 billion (\u00a3784 million) and more announcements are anticipated for 2024.<\/p>\n 2. Hesitant but growing:<\/strong> The largest of the three groups and consisting of a wide body of sectors and company sizes. The hesitancy tends to be concentrated at the HQ level rather than local and is due to a combination of geopolitics, sluggish domestic and international economic outlook, or commercial considerations (competition, pressure on margins, regulation, etc.). Add also the fact that British companies tend to lean more conservative than our comparators, such as those from the US.<\/p>\n 3. Recovering revenue or struggling for growth:<\/strong> Companies in this group are often facing strong headwinds from competition and regulatory barriers, economic challenges such as the real estate crisis<\/a> and\/or weak demand, or are still working to recover revenues from the impact of Covid restrictions<\/a>. This group is generally not considering leaving China and is instead reorienting its strategic approach to return to a growth trajectory. In a very small number of cases, companies have decided to exit \u2013 although this is not uncommon in any given year due to mostly commercial failure. However, in one case, a company (Graphcore) did opt to exit China this year due to US semiconductor controls in a rare case of a UK company getting caught directly in the crossfire of geopolitics.<\/p>\n