Manchester turns to the east for sustained economic growth

The city of Manchester is geared up to accelerate trade and investment relationships with China, with the launch of its regional working group Manchester-China Forum later this month.

Different from Britain's public sector trade and investment groups at both national and local levels, this forum is primarily private-sector funded, with a goal to provide services sharply catered toward the needs of local businesses.

"The forum is very business focused, and targets just the Manchester region. Therefore we are not guided by the strategies or messages that the UK nationwide needs to have (when dealing with international businesses)," says Charlie Cornish, chief executive of Manchester Airports Group, who also chairs the forum.

Cornish says that one reason for setting up the forum is because the Manchester local government's inward investment agency MIDAS cannot devote many resources to helping local businesses trade with and invest in China, as they are used to help local businesses in all international markets.

He says while the central government agency UK Trade and Investment has more resources to the Chinese market, it is also focused on the UK as a whole. But Cornish and other like-minded Manchester business leaders felt the need for local businesses to receive more focused help.

"The Manchester-China Forum will specifically identify Chinese sectors and regions with characteristics complementary to Manchester, and will devote resources to build networks with these Chinese sectors and regions," Cornish says.

The Manchester-China Forum reflects a growing trend of regional business communities and governments in Europe increasingly keen to strengthen relationships with China, as they realize that central government efforts often benefit capital cities disproportionately.

Many local governments are establishing China engagement strategies with the help of local businesses and academic institutions that have extensive experience in China. One example is the collaboration between the University of Nottingham's Asia Business Center and Nottingham City Council.

Another common trend is the twinning of European and Chinese cities and provinces with complementary characteristics, to benefit both local governments and businesses. Examples are Sunderland with Harbin, Sheffield with Chengdu, and Essex with Jiangsu.

To fight for its share of the China growth, Manchester local government commissioned Lord Nat Wei, a member of the House of Lords, to write a report on how Manchester can best engage with China.

The Wei Report, published last year, suggested some approaches including the establishment of a Manchester-China Forum. The local government considered it a good idea, and subsequently appointed Cornish to be its chair.

According to Cornish, the forum is currently recruiting a full time manager and two full time assistants, to work in Manchester. It will also appoint several envoys in China, who could be employees already in the China offices of Manchester businesses and have some time to spare for the forum.

The Chinese envoys are expected to help Manchester businesses set up offices in China, trade with Chinese businesses and attract Chinese investment, Cornish says.

The forum will host regular activities to help member businesses share information and knowledge, including seminars, meet-the-buyer events, and other networking opportunities.

Meanwhile, Wei will continue to work as the non-executive director of the forum. He is currently in China, speaking to a number of Chinese local governments with the hope that they could help to link up the forum with businesses in their cities, Cornish says.

Wei's current work in China is focused on the Pearl River and the Yangtze River Delta regions, because extensive research by the Wei Report found that entrepreneurs in these regions have a relatively high recognition of Manchester. In addition, these regions have great growth potential in themselves, the report says.

Cornish says that over time he envisages the forum including hundreds of member companies in Manchester, as statistics from MIDAS show between 1,500 and 2,000 Manchester companies already trading with China.

He adds that the forum's founding members, including MAG, Deloitte, Holroyd Precision, Bruntwood and British Telecom, will provide the majority of funding for the forum. Additional funds will come from public sector bodies including MIDAS and the Greater Manchester Local Enterprise Partnership, a voluntary partnership between local government and businesses.

This means other businesses that join the forum will not need to pay a membership fee, Cornish says, adding that MIDAS and the Greater Manchester LEP will work closely with the forum.

To understand the impact such a forum could have on individual Manchester businesses, MAG's own story can be analyzed as a good case study.

Although the airport has the capacity for long haul flights, attracting a Chinese airline to establish a direct flight to Manchester has been a challenge because Chinese investment in the UK is concentrated in London.

"We believe there is enough density from the Manchester region to some cities in China, and we are sharing this information with Hainan Airlines and Air China, hoping they can establish direct flights from Hainan or Beijing to Manchester," Cornish says.

"If the forum is successful in facilitating more Chinese businesses to establish in Manchester and more Manchester businesses to establish in China, then there would be an increase in demand for direct flights. So it's all interlined," Cornish says.

Cathy Pacific operates direct freight flights between Manchester and Hong Kong, transporting exports between the two cities. But no direct passenger flights between Manchester and China exist.

Another ambition of MAG is to attract Chinese businesses to settle in its Airport City, a 659 million pound ($1 billion, 776 million euros) business park.

Built on land surrounding Manchester Airport, the park is designed to host multinationals that want to improve efficiency by cutting down travel time.

As Manchester Airport already has direct flights to many cities in Europe, Asia and the Middle East, companies whose employees regularly travel to these regions will benefit from locating inside the business park.

"We see great opportunities for Chinese companies wanting a presence in Europe to put their headquarters in Manchester," Cornish says.

Last July, Cornish's team unveiled the Airport City's plans to Chinese businesses and investors at Shanghai's Airport Construction Summit.

Cornish says that Manchester Airport City would be suitable for Chinese companies that want to establish sales and marketing offices, call centers, or logistic centers in Europe.

Its on-site manufacturing facility could also be attractive for Chinese companies wanting to engage in high-tech manufacturing in Europe, he adds.

He says his team is working on attracting Chinese businesses to settle in Airport City, an endeavor which could be made easier when the forum promotes Manchester to Chinese entrepreneurs.

"This high-powered forum is a strong vehicle to help us connect with the massive economic growth China continues to generate, gaining the benefits our economy desperately needs. This is an ambitious step," Cornish says.

Contact the writers at cecily.liu@chinadaily.com.cn and zhangchunyan@chinadaily.com.cn

(China Daily 04/19/2013 page15)