China

The Chinese economy has an annual Gross Domestic Product (GDP) growth rate in excess of 10% and import levels now in excess of the US, demonstrates that London's new trading and investment partners will increasingly be in emerging economies.

 Over the longer-term our primary audience must be this new affluent middle-class who have the disposable income to study, visit and invest.

Setting up offices in China and first of all in Beijing, is primarily as a platform to promote London into that growing secondary tier of consumers.

Why Beijing?

Beijing is China's political, cultural and international exchange centre. It is home to China's central bank (People's Bank of China) and the headquarters of big national financial and insurance institutions.

It is the focal point of many international flights to China. Data from the Civil Aviation Authority (CAA) shows that it received over 250,000 passengers from London airports in 2005, more than any other Chinese city.

It is a major transportation hub, with dozens of railways, roads and expressways. Beijing Subway has four lines with further development planned before the 2008 Summer Olympics.

These factors coupled with the enormous potential for sharing experiences and best practice between the two cities arising from the Olympic Games make Beijing the natural choice for the first London Development Agency (LDA) office to be located in the emerging markets.

Over the longer-term the international and Chinese promotion opportunity presented by the 2008 Beijing games, with its link to London 2012, form a fundamental pillar in our engagement with Beijing.

Beijing is the platform from which London will update its image into China's growing secondary markets such as Shenyang, Zhengzhou and Tianjin.

Why Shanghai?

Shanghai is the largest city of the People's Republic of China and also has the highest GDP per head. It has increased its role in finance, banking, and as a major destination for corporate headquarters.

In terms of transport infrastructure, it is one of the world's busiest ports and its metro has five lines with plans to grow significantly over the next five years.

Almost as many passengers, 230,000 in 2005, fly directly from London to Shanghai as do from London to Beijing.

Given the size and relative wealth of Shanghai we have a representative – although no physical office – based there.

Over the long term in Shanghai our aim is to maximise the promotional opportunity of Shanghai Expo 2010 - the world's largest trade and promotion fair. We are also focused on developing improved brand awareness of London in secondary cities of Xiamen, Shenzhen and Guangzhou.

Background on China

China is providing excellent opportunities for British business. China's accession to the World Trade Organisation in December 2001 has increased the opening of the Chinese economy and improved the competitiveness of its industry.

Market liberalisation has led to China becoming one of the world's most rapidly growing economies. Gross domestic product (GDP) grew by 9.9% in 2005 and by an estimated 8% in 2006.

In 2004, UK exports to China were worth £2.4billion - an increase of 23% over 2003, making China the UK's 15th largest export market. With over 4,500 British-invested projects as at June 2005, the UK is also one of the largest foreign investors in China.

The focus of the Emerging Markets Unit in co-ordination and implementation in China will be to exploit the investment opportunity resulting from the rise of the new Chinese consumer.

McKinsey estimate that there are now 250 million middle-class consumers now in what has been termed the secondary tier of Chinese cities.

Over the longer term our primary audience must be this new affluent middle-class who have the disposable income to study, visit and invest.

Setting up offices in China and first of all in Beijing, is primarily as a platform to promote London into that growing secondary tier of consumers.