HC 735 Rebalancing the Economy: Trade and Investment

Written evidence from UKTI following oral evidence session on 10 March 2011

Further written evidence from the Department for Business, Innovation and Skills

During the evidence session attended by Lord Green; Edward Davey; Susan Haird and Patrick Crawford on 10 March 2011 (to be published as HC 735-vii) a point about BT Group plc’s involvement in China was raised.

Q516 Simon Kirby: I understand that entirely. Some other countries, for instance Germany-perhaps you spoke about this on the telephone this morning-seem to have far more success than the UK in encouraging their large companies to piggyback small- and medium-sized businesses. If they open up in China , for instance, they take those businesses with them. I went to China last week. We heard from BT that that was not their intention at all and that they would involve themselves almost entirely with local businesses. Do you not think we could learn something from Germany ?

Lord Green: We can certainly learn something from that, because I think big companies have a responsibility to their supply chain. We can swap stories of course, but I think many of the companies I know take their responsibilities to their supply chain very seriously. There are opportunities to help SMEs that are part of the supply chain; indeed, I would have thought it would be in the interests of a big company to help the SMEs that are part of its supply chain. Some of that help can take the form of helping them to get into the foreign markets where they are investing or exporting. We need to ensure that we do as good a job of this as we possibly can.

Larry Stone, President: Group Public &Government Affairs, BT Group plc has written to Susan Haird about BTs marketing role in China and with the company’s agreement I am forwarding their letter to you for information. Your Committee Members might wish to see Mr Stone’s letter and the company are aware that the Committee might choose to publish their letter as part of the evidence base findings for your inquiry.

I am sending a copy of this letter to Qin Li at the British Embassy in Beijing and to Ian Lawrence at UKTI.

12 April 2011

ANNEX

Letter to Susan Haird, Chief Executive Officer, UK Trade & Investment, from Larry Stone, President Group Public & Government Affairs, BT Group plc

I wanted to write about a possible misunderstanding on one specific point which arose from the otherwise very helpful discussion when the BIS Select Committee visited BT in Beijing recently.

BT does focus on sales to multi-national companies and major national corporates outside the UK through our Global Services Division. We tend to contract outside of China for these clients for business and regulatory reasons. China does not have a fully liberalised communications market and we act largely via local partners for delivery of services to our MNC and corporate customers.

I understand that we were asked how and if, including via our Beijing customer technology

showcase, BT might help to support UK SMEs looking to operate in the Chinese market. We do not sell lCT services to SMEs in China, but Kevin Taylor (our President AsiaPac) and his team would be delighted to act as a sort of UK-to-China bridge in our sector. We might offer-along with other companies-some advice and guidance.

Please do let me know if this would be helpful. A copy of this letter goes to Qin li at the UK Embassy in Beijing.

I do hope to see you soon, and I know Kevin would also be pleased to meet you in London or in Hong Kong.

22 March 2011