Referendum offers chance for China-Scottish ties

Referendum offers chance for China-Scottish ties

Roddy Gow Afghan Jacket 200X200ASI Chairman Roddy GowScotland is changed utterly – that much is clear.

Last week’s historic referendum was an extraordinary exercise in democracy. Turnout was massive and the idea of immediate independence was rejected. More powers have been promised to the Scottish Parliament in the closing stages of the campaigning and First Minister Alex Salmond described Scotland as now the most politically engaged country in the western world. 

The question of how all this will affect Scotland’s relations with China, however, is perhaps less dramatic and clear-cut. Those who voted Yes will insist that an opportunity has been wasted, that independence would have been a boon for Scots doing business overseas, whether in Asia or elsewhere. On the other hand the No camp may claim that we now have the best of both worlds – a distinctive Scottish brand to present to the world while at the same time retaining the option to draw on the UK’s international standing and its well-established trade and investment networks. 

So will the independence referendum result help or hinder the prospects for Scottish business with China? It would be nice to think that the answer to that question is as black and white as Tian Tian and Yang Guang, the giant pandas currently holding court at Edinburgh Zoo. But of course that is not the case. The Union brings benefits, certainly. Whether the loss of those would have been offset by gains from independence will never be known. 

Moving forward together

What we can say for sure is this: the referendum result has given us clarity. We now know where we are. The issue of independence has probably been settled for a generation. Now that the vote is over Scotland will embrace the arrangement we have and turn to addressing aspects of the Scottish economy – and its ties to China – that needed to be tackled, regardless of the result.

Another important thing: Scotland’s global standing, always high, can only have risen as a result of the referendum. It is almost unheard of for a debate about potential secession to be conducted peacefully and without threats. Scotland has shown the world that we have a well-established democratic process and that we are a society that abides by that process. We have a result which both sides have accepted without serious dispute. We move forward together. 

So what can Scotland in 2014 offer China? And how can we further improve our mutually beneficial ties?

The Scottish Government’s five-year China strategy is a good starting point. This sets out Holyrood’s ambitions in developing Scotland’s relationship with China. It recognises that, despite the obvious differences in population, geography and wealth, Scotland has much to offer China. And it sets out specific areas to focus on – from expanding Scotland’s education and research links to China to promoting an innovative and creative Scotland through cultural and sporting events like this month’s Ryder Cup at Gleneagles. 

Because of Scotland’s small domestic market, connecting with overseas markets such as China is vital to our success. Yet studies suggest as many as half of all Scottish entrepreneurs setting up businesses don’t expect to have any foreign customers – something we know has to change. By contrast Scotland’s record in attracting overseas investment is excellent. So as well as boosting direct exports to China, the Scottish Government’s strategy has a specific aim to double the number of major Chinese investors with a presence in Scotland by 2017. 

But it is important that Scots don’t rely solely on the Scottish or UK government as we seek to engage more fully with the wider world, especially China and the rest of Asia. Government and its agencies have critical roles to play. But we cannot look to the public sector to provide solutions to every challenge. And it is important too that we think beyond the traditional ideas of what Scotland can offer the world. Yes, we are proud of our oil and gas and whisky industries. But what about our expertise in financial services, life sciences, energy and creative industries?

Clear competitive advantages

“Scotland has an internationally competitive economy. It is amongst the best in the world,” says Julian Taylor, Scottish Development International’s Executive Director for Asia Pacific region based in Shanghai. “This is because of our history and culture of innovation. It is because our people and institutions, such as our universities, engage with international partners. Very importantly, it is because Scottish companies have a truly global outlook and see great opportunity in building relationships in markets such as China. 

“In response to this, Scotland’s ability to attract, retain and grow foreign direct investment puts us at the top of many league tables. This is based on clear competitive advantages and investment propositions in industries such as energy, life sciences and financial services.”

“China remains a priority market for Scotland,” Julian adds. “Looking ahead, Chinese people will be interested in more and more of Scotland’s great companies and products, not only whisky and golf, but technology, tourism and new consumer products from digital games to textiles. Scotland will also be the home to more and more growing Chinese companies, building on the success of the many who have already found a new home there, as we sustain our position as one of Europe’s best inward investment locations.”

Diane Duncan, Head of Low Carbon with Highlands and Islands Enterprise, has been focusing her efforts on growing the value of Scotland’s water sector, and in particular boosting SME capability and exports. “We have a number of companies already working in China in the environmental sector, and indeed China is looking for technologies to address growing and very real water quality and pollution problems,” she says. “Scotland has an excellent reputation for water excellence and this is no accident. The governance and regulation of Scotland’s utility are unique, and our agencies recognise that our environment really is our economy.”  

“The referendum has put a spotlight on Scotland,” Diane adds, “and now we need to build on the positive perceptions of a progressive country to help us deliver economic growth.”

Much to offer China 

At the Asia Scotland Institute we are also doing our bit. The Institute’s goal is to equip Scotland’s leaders with the knowledge and skills needed to engage more effectively with China and the rest of Asia. We achieve this by offering a series of innovative programmes and events, including talks by business leaders such as Dominic Barton, Global Head of McKinsey & Company. Next spring we will be hosting a two-day “Building Bridges” conference in Edinburgh which aims to help develop business and economic links across the globe through commerce, tourism, culture and higher education. 

We are not alone. Scotland’s higher education institutions have come together with eight different partners, including British Council Scotland, to form Connected Scotland – an initiative that seeks to promote the distinctive qualities of Scottish universities to countries throughout the world. Scotland’s university sector is acknowledged as an industry sector in its own right. Its annual exports totalled £1.3 billion in 2011/12. Connected Scotland aims to increase that to £2 billion by 2017. 

Meanwhile, Scotland is proud to host five Confucius Institutes on its shores – the highest concentration worldwide in terms of population. Sir Timothy O’Shea, Principal of the University of Edinburgh, is a member of the Confucius Institute’s governing council. 

China is vitally important to Scotland. We know that. And we know too that we have so much to offer China’s business community in return. Our independence referendum may have been a momentous moment in history. But when it comes to Sino-Scottish relations our watchword is business as usual. We’ve made great strides already. We must simply keep calm and carry on.

This article first appeared in China Daily on 26 September, 2014

  

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