APPENDIX 6
Memorandum submitted by Processing and
Packaging Machinery Association (PPMA)
The PPMA has only dealt with FCO "on the
ground", as it were, in Hong Kong and China. Our main contacts
have been with DTI (now British Trade International) and CBBC.
We opened our own office in Shanghai during 1999 with the aid
of DTI Sector Challenge funding.
During our various visits to establish the liaison
office in Shanghai, we called upon the support of the Consulates
in Hong Kong, Beijing and Shanghai. Our main contacts were with
the Commercial Officers at these posts. The Consul General in
Shanghai also attended the official opening ceremony for our office
last July and participated in the talks with local governmental
chiefs. He was most helpful and supportive.
It is clear that there is a limit to the assistance
posts can offer to SMEs, due to the size of the market, its complexity
and the rather "juicer" prizes on offer for larger companies
in the fields of aerospace, telecommunications, water and civil
engineering.
We have found that our local contacts have been
more productive in helping us to become more visible. But we readily
acknowledge, with gratitude, the funding which has made the development
of these contacts possible.
It is always difficult for Posts to provide
in-depth knowledge and I believe their role as a facilitator is
much more important to SME sectors.
On the general political level, the FCO and
others are very useful in advising on protocol and local business
practices.
I must tell you that I come from the Patten
school rather than the Sir Percy Craddock school when it comes
to dealing with the Chinese.
Every respect must be shown to the status of
the Chinese contact, and their customs and practices in social
and business dealings. In particular, the issue of "loss
of face" should not be underestimated.
However, the Chinese are very adept at hiding
behind this "bamboo curtain" when it suits them and
sometimes a direct and stubborn approach can reap rewards (staying
polite at all times!).
At the end of the day China is desperate to
update its technology and needs the West to achieve this aim.
So we should not undersell our value to them. However, we also
have to appreciate our Taiwanese, Japanese, American and European
competitors are very aggressive in the market.
Many questions are asked about our view of Chinese
human rights, and as I employ a Chinese national it is interesting
to learn their perspective on these issues.
Generally, I believe they understand the massacre
in Tianamen Square in 1989 was a big mistake. However, there is
a general acceptance that a big country with a huge population
needs strict controls, and they are willing to accept some harsh
rules and regulations in return for the stability and certainty
which the Government regime has brought. One only has to look
at the Manchu regime it replaced to understand their perspective.
I believe the best way to bring "democracy"
to the Chinese is through the continuous contacts and development
of business relations which are now happening. In 1980 there were
only 400 foreign nationals in Shanghai. I think the current count
is about 40,000.
It is clear that the Chinese Government will
pressurise the West to grant as many concessions as it can, the
carrot being access to their markets.
China is very much a Who You Know society, and
I believe the major role of FCO is to ensure we do know the right
people and the structures of industry sectors and their decision
making processes. Quicker market intelligence is also vital and
an area where we are notably slower than our competitors.
With the Hong Kong issue receding, I believe
those UK companies and sectors who treat China seriously could
find many opportunities. If, as has been reported recently, the
current regime makes way for a new Order in 2002 the process of
liberalisation and market access will gather pace. The FCO should
be ensuring that as many businesses as possible are in position
to take advantage of this when it happens.
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