China Plan Inquiry
Item 4 is evidence for our China plan inquiry. We are pleased to welcome representatives from organisations that recently visited China on a mission that the Scottish Council for Development and Industry organised. I welcome Andrew Hogan, Julia Weedon, Jane Gotts, John Melvin, Stuart French and Laurie Clark and thank you all for coming. I understand that Jane Gotts will make a short opening statement on behalf of all the witnesses.
Jane Gotts (Scottish Council for Development and Industry):
Good morning, everyone. A few months ago, when the SCDI gave evidence to the committee on the revised China plan and on refreshing the programme, we mentioned that we were to take a trade delegation out to China. That was one of the largest delegations that we have organised. One of my key messages to the committee when I previously gave evidence was that it is important to help small and medium-sized enterprises to engage in the Chinese market.
We took 23 SMEs out to China from a range of sectors in Scotland's economy, including the energy, financial services, life sciences, biotech, education, tourism and food and drink sectors. A range of businesses from those sectors is represented today. Andrew Hogan represents the whisky sector; Julia Weedon is from the college sector; John Melvin is from the tourism sector; Stuart French is from the tourism and event management sectors; and Laurie Clark is from the construction sector.
I thought that good value would be obtained from those businesses feeding back into the China plan and talking about the challenges and opportunities in doing business in the Chinese market. The feedback from our visit already shows the prospect of more than £1.5 million of orders in the next 12 months, which is a fantastic result from a week's trip out to market.
I do not know how you want to approach the session, convener—perhaps you will want to bring in some of the other witnesses.
I thank all the witnesses for their written evidence, which we appreciate as background information. It might help to open with general questions. In your written evidence, most of you mention the value of the China plan. How will it assist your organisations in doing business in China? Do you want to change anything in the plan? What would assist you further?
Andrew Hogan (Bruichladdich Distillery Company Ltd):
I enjoyed going out to China with the SCDI. However, as ever with China, it is about the long term and the guanxi relationship. I am in the fortunate position of going back tomorrow to follow up on meetings. I appreciate that not everyone is in the same boat. People cannot usually just go back to China at the drop of a hat.
I would like a means of establishing guanxi when we are not in China. A head of steam is built up when we are there and we make many fantastic contacts. We have discussed this morning how positive we all felt when we came home and had businesses and interests to drive. However, the difficulty is that that does not happen when we are not in China. If we do not go back straight away, the initiative can be lost. The core of my suggestion is therefore to find whether there is a way of using Government organisations, particularly the SCDI, to manage the process and keep relationships going until we can go back out again.
Julia Weedon (Edinburgh’s Telford College):
I outlined in my written evidence a number of ways to help in education, particularly with the college sector. We have been going out to China for a number of years. Some opportunities require a long lead-in, while others happen quickly; it is sometimes difficult to know which will happen quickly and which are long-term prospects.
Cross-sectoral trade missions of the kind that we went on recently are important. They raise the profile of Scotland generally, which is always good. We are from a relatively small country and are visiting a very large country with many provinces, so it is important for us to raise our profile together. It is also important to have synergy not only between the Scottish companies and the Chinese companies when we visit them, but among the Scottish companies. On the missions this year and last, we made contacts in the companies with which we travelled that let us work together on business opportunities to get into the Chinese market. That is always a wonderful add-on.
As part of the follow-up from the mission that we have just been on, one of our partners visited us yesterday. Unfortunately, the climate was not particularly conducive to their visit to Scotland and Edinburgh. However, they had a wonderful time. Obviously, there will be a lot of follow-up from the trade mission and from our other engagements with China. A number of methods can be used through the China plan for the college sector in particular to support our business in China and the Scottish economy.
Business is still growing for us in China. It used to be our largest market for student recruitment and partnerships, but it has dropped into second place. India is now first for our college, as it is for a number of educational institutions. However, our ambitions are to make China our number 1 again. I know that that is what our Chinese partners want. I regard the trade missions as a great opportunity for growing business with China.
John Melvin (Galink Ltd):
Good morning, everybody. Just to add to what Julia Weedon and Andrew Hogan said, the benefits from multisectoral trade missions of the kind that the SCDI organises and the fact that they are part of the China plan make them useful for small companies such as ours. We have been on the go only since November 2007, so it has been great to go out with the trade mission to markets for in-bound tourism, meet agencies and build up relationships. It has taken us 15 months to get to where we are and we hope now to welcome regular groups of Chinese visitors to Scotland and the UK. The trade mission provided a very useful platform for us to go out there. We met other Scottish companies on the trade mission that we would probably not have met otherwise, so it has been very useful for both internal and external contacts.
The China plan is most impressive as a general plan, but it would good for the tourism sector if more specific targets were set for organisations—for example, VisitScotland working through VisitBritain. One of the messages that we got out there came from being asked constantly, "Who are you?" It sounds strange to say that Scotland has low visibility but, although people have heard of things such as tartan, whisky and golf, they do not automatically associate them with Scotland. We have incredible sales tools, or business cards, as it were. However, countries such as Australia and America seem much more proactive than us and are committing more resources, even during the economic downturn. Another such country is Ireland, which has a focused team Ireland strategy. It would be good if more specific goals on tourism were set for VisitScotland.
Stuart French (Platinum Event Management Ltd):
Like John Melvin, I am involved in the golf tourism industry. In my role as golf consultant to Angus Council, I was fortunate enough to go to China a few times. Taking on board what I learned from those visits, I felt that it was time to break out on my own and see what I could achieve in the Chinese market. I was able to do that with the assistance of the SCDI's latest trade mission.
The opportunities in China for the golf tourism industry are endless. I have watched with interest how things have changed in the past four years. Recently, to celebrate tartan week, we had the tartan week international golf challenge. This year, I noticed a marked difference in the age range of Chinese people at the event compared with previous years. That reinforced the view that I have had for several years that, although golf has been very much a high-end sport in China, it is filtering down to the middle classes. At that event, there was a young element with a different mindset and attitude, which has reinforced my commitment to go ahead with what I am trying to achieve. I believe that the sport will filter through to an even greater extent and that we will get a lot more business.
As a result of my visit, and through personal contacts that I have made in the past three years—as Andy Hogan alluded to, with the Chinese, the approach is about relationships—I will be involved with three tours this year. I am not a tour operator like John Melvin; instead, I put together itineraries and event manage, organise and co-ordinate trips. We forecast an income of about £370,000 this year just from three trips that were set up through personal connections. However, I want to get into the non-personal connections. I want to get into the tour operator market in China, but that will take time. Everything takes time with the Chinese. Creating a business relationship in China takes three or four times longer than it does here.
I fully support the China plan, but I reinforce the point that assistance is needed for people such as John Melvin and me to secure business with the Chinese. That is particularly true for those who deal with Chinese tour operators, as that is the most difficult market to break into. However, once we break into it and get into the operators' mindset and into a relationship with them, they will be invaluable. I fully support the work that is being carried out, but further support is needed.
Laurie Clark (Ecoscreed Ltd):
I totally agree with everything that has been said. It is difficult doing business in China—it is a much more long-term process. We must remember that China is a long way away from Scotland and that it is very expensive to get there. However, it is worth making the effort. The China plan looks very good, but one comment that we all had when we discussed the issue earlier this morning—I raised the issue, but I think that everybody else was just frightened to do so—is that the plan is a wee bit like a business plan with no financial information at the end of it. I expected to see numbers and money and information on where some of the public money will be invested.
Support should be provided not only for business organisations, but for cultural trips. We need to get out there and, as has been said, create team Scotland. We see team America and team Ireland in China, but we do not see team Britain or team Scotland. We are keen to create that, but that needs a bit of money to be filtered through organisations such as SDI and the SCDI. The more Scottish people are there, the more benefit we will get. In the current climate of adversity, when the world is in a bit of turmoil, there might be an opportunity for us to gain ground that has perhaps been lost. Countries such as Ireland and America are certainly more advanced than we are when it comes to dealing with the Chinese.
Will you say a little more about the barriers that you face, so that we can consider how we could assist. Is China's size a barrier? Should we concentrate our efforts in one area, or should we just go where the business is for each of you? John Melvin mentioned VisitScotland. Do you receive assistance directly from the Government or from VisitScotland or VisitBritain? Do they contact you? Would any kind of rapport or networking assist you in your work?
It is important to mention that we were in Hong Kong as well as Shanghai. Hong Kong is an excellent market for smaller businesses that are looking to get into mainland China. Hong Kong is a safe place to do business, the legal aspects are similar to those in the UK, and English is the language of business. In our efforts to remove risks, we are conscious that Hong Kong should remain a key part of the China plan. It offers access to southern China and the Pearl River delta area, where there are many major opportunities.
Part of our role in the SCDI is to link in with the public sector agencies that offer support. We certainly try to do that by working with Scottish Development International, and with the China-Britain Business Council, which has offices throughout China. It is our role to facilitate those networks and contacts.
I mention Shanghai and Hong Kong, but I know that Julia Weedon went to other cities in China during her trip.
We used the mission as a starting point for our visit to China. As we said in our written evidence, engagement at ministry-to-ministry and Government-to-Government level is crucial for the Scottish colleges sector, especially in China. On the website of the Chinese Ministry of Education, there is really no mention of Scottish colleges, because they are not award-giving institutions, relying on validation from the Scottish Qualifications Authority. Mention on the website is very important, so that when we talk to potential partners in China—universities and colleges—they know that we are on the website and are recognised, bona fide, Government-funded organisations. We have to make a hit at that level.
The Chinese have quite a hierarchical structure in their businesses, so it is important to tick all the boxes so that local arrangements for partnerships are endorsed by the relevant ministry. That could be the Ministry of Education or the Ministry of Labor and Social Security, for vocational qualifications. It is very good that the SQA is delivering higher national diplomas in China, because it raises the brand. However, there could be opportunities to expand that work and to support the Scottish colleges, perhaps by part of the qualification being done in the other country and part of it being done in Scotland. Transnational education is definitely the way forward for Scottish institutions, whether colleges or universities.
Although we are recruiting students directly, we are also looking for partnerships. Telford College's network of global partnerships is very important to us. We want to raise the profile of our institution as well as that of all Scotland's colleges. Links with prestigious universities and colleges are important, and we were able to form such links on our trip to China as we travelled out of the main cities and into the metro cities and the second and third-tier cities.
Obviously, the travel and the cost are challenging, so any support that can be given is helpful. With missions such as the Scottish Colleges International, SDI and SCDI missions, it is important that there is funding to support the small marketing budget that the college has. Such tangible, practical things—along with supporting smaller companies, where possible, with the buying power of Scotland—would make it easier to do business by making the trips more cost effective and would help a great deal, ensuring a good return on the spend.
I mention in my written report that better advantage could be taken of the existing sister-city relationships that Edinburgh, Glasgow and Perth have. There are also links up in Angus. Rather than just look at the map and stick a finger on it, we could exploit those existing relationships.
In-bound tourism is the main focus of our activity, but we are also keen to improve cultural and educational links between China and Scotland and between Japan and Scotland. We see education as an important area. Agencies such as the British Council, for example, could be encouraged to develop more school links. I mention in my written report how awareness of Scotland can grow through education. People have heard of the Loch Ness monster, but that is the only thing that they associate with Scotland. School links can be established using the current technology, which makes it easy to put schools in contact with each other. When I was at school, we had to write to our pen pals in France, but children can now rattle off e-mails that get there in the blink of an eye. The technology is certainly there.
If students' awareness of Scotland is improved through school links, that will rub off on their families—their parents and uncles—and, when they grow up, they will perhaps be more likely to come here to study or to travel. We should encourage organisations such as the British Council, which has existing links with China and Japan, to exploit those links further.
You mentioned barriers. I will not go into the intricacies of getting visas. There is quite a complex process, just now, to enable Chinese people to come to the UK for general sightseeing. It is a lot more straightforward for them to come on general business. If they want to come for sightseeing, they must go through an agency in China that is registered with the British embassy, and they must be sponsored or invited by an agency in Britain that is registered with the China National Tourism Administration through VisitBritain. It is quite a lengthy process.
We are targeting the north-east of China. The UK Trade and Investment report of 2007 focused on regional cities in the north-east of China, away from Beijing, Shanghai and Hong Kong. Through a lengthy process of begging, pleading, threatening and calling in a lot of favours, we eventually got an agency in the north-east of China registered with the British embassy and it has gone through a training process. I hope to welcome the first groups through that agency at the end of next month—or, if not then, in June or July.
We hope that it might be possible to make it slightly easier for agencies to be registered with the British embassy. The location that we are targeting is called Shenyang. A few years ago, there was an American visit there, which was led by a senator. Trade missions involving high-profile politicians are very useful. America has spent a lot of time and effort on developing such relationships, and it is now easy for agencies in China to register with the American embassy for the issuing of visas. There are obviously worries about Chinese visitors coming over here and not going back—that is partly what the British embassy is worried about. However, a lot of our competitors have found ways to accommodate such worries better than we are doing just now.
Does anyone else want to comment on barriers and networking?
We talk about the vastness of the geography of China. The scatter-gun approach does not really work there. We pick an area. At the moment, I am concentrating on Shanghai because I have got to know its geography and people there. I am going down a new route. As I say in my written evidence, business will not be secured by one trade mission or one meeting; rather, two, three or four meetings secure relationships. Therefore, people must first of all concentrate on one area before they beat off into other cities. That is one problem. Visas are also a problem, as John Melvin said. I highlighted that in my written evidence. Those are among the aspects that I have to consider.
In his written evidence, Andrew Hogan says that he likes the idea of an industry sector set-up that could network and advise people. Would that assist you, Andrew? Do you work across China or mainly in Hong Kong?
We have been established in Hong Kong for many years; we have nothing in China at the moment. For many distilleries, getting into China is a massive aspiration. People in every market in the world will say that their market is special and different, but that remark probably applies more to China than to any other market.
The unique issue in China is that there is no shortage of importers. I have spent many hours trying to source importers for Korea and other south-east Asian countries; doing so is quite difficult. In China, one is approached daily by dozens of importers. Importers in China will take concrete, steel, plastic, whisky or whatever. The difficulty for me lies in thinning people out and finding out who is relevant, who is specialist enough to deal with my product, and who has the connections and the distribution capacity to take it forward.
There were many Chinese businesses at the official reception that I was at for the SCDI mission in China in March, but a networking strategy proved to be quite difficult. I have a mountain of business cards from lovely people who have no interest at all in my business; equally, I have no real interest in their business. I tried to nudge people gently out of the way because the guy to whom I wanted to talk was glaring at me 10m away. The problem is trying to thin people out and cut people out, and perhaps streamline things a little bit. There are pitfalls in streamlining too much, but it would be nice if industries were broken down by sector so that we could get hold of specialists and the niche market operators for whom I am looking much more quickly.
Laurie Clark is in construction. Is that market quite difficult for you? What barriers do you face?
I am involved in two distinct aspects of construction at the moment. I am involved in the production of concrete, and my company also imports construction equipment from China, which started very well in 2007 to 2008, but was brought to an abrupt halt. Basically, I copied an idea that I picked up from the Irish. We brought in diggers or loading shovels in kit form, assembled them in Scotland and then rented them out throughout the United Kingdom. Obviously, things were all very well until November or December last year, but work came to an abrupt halt then.
The other sector that I am involved in is the specialised green concrete products sector. We are at an early stage with that work. We have a substantial sum of money involved in intellectual property, and we have now achieved a Chinese patent and copyright on our brand, which should be of interest to the Chinese. Indeed, it is proving to be of interest to them, but getting to the right people is difficult. Plenty of people will put up their hand and say, "We'll help you. We're interested in doing that," but whether we should deal with those people is yet to be proven.
The other panel members are interested in taking people to China. They are more interested in going out there, engaging with people and trying to help other businesses, although perhaps they should not do so in my sector, thank you very much. I am quite happy to try to help people in other areas and to use the little bit of experience that I have picked up from people in other sectors.
Every businessperson in Scotland could certainly learn from a trip to China and from how the Chinese approach business. I reiterate that the more people from Scotland we get to go to China and engage in the provinces, the better the feedback we will get, the more money will come back into Scotland, the more jobs we might create and the more inward investment we are likely to get. It is a numbers game, and we have been a wee bit slow to get out there.
My first visit to China, which I made on my own, was a bit of a leap in the dark. When I got to the airport, I did not realise that no one spoke English, so getting from the airport to my hotel was quite a challenge.
The first challenge.
Yes. I was disappointed when I went to a trade convention, because large numbers of people from Ireland, Australia and the USA were there, but no other British companies were represented, with the exception of JCB—although no one from JCB UK was present to promote the company's product. The UK and Scotland seem to have got lost. However, with the flux in the world market, we now have the opportunity to get back in there and make progress.
A key theme in the written evidence and in what has been said this morning is people's concern about our visibility in China, which Laurie Clark has again just touched on. I would be interested to hear what practical measures the panel believes could be taken to address the low level of understanding of the Scottish market. I confess that I was quite surprised when John Melvin said that some of our most iconic figures, or business cards, are not directly associated with Scotland by the Chinese. I can remember speaking to someone at the Irish tourism authority who said that if they had some of the iconic symbols that our country has, they would do even more than they are doing. That is quite concerning. It would be interesting to hear what practical measures can be taken to address Scotland's low level of visibility in the Chinese market.
I will kick off. The key is that we all need to work in partnership. SCDI's relationship with SDI has improved significantly over the past few years. SCDI has made trade visits for a long time, but recently there has been a sea change in how we have approached those visits. We work much more closely with SDI, especially its in-market teams. SDI has good coverage in Asia. We visit the markets where it has a presence.
Partnership working is the key. As well as working with SDI, we need to let VisitScotland know when we are going away. We can do simple things, such as use a VisitScotland video on Scotland as an icebreaker at meetings. Company representatives can raise awareness by showing images of Scotland. If you mention golf or whisky to a Chinese businessman, their eyes light up; it is an icebreaker. That is Scotland's unique selling point—it is what opens doors and allows us to get down to the nitty-gritty of doing business. The key is working more closely with VisitScotland, SDI and organisations that already have a presence in China. It is about having a team Scotland approach, because we have only 5 million people and we are competing against a country with a population of 1.2 billion. That challenge cannot be underestimated, but we can draw strength from one another, and we as an organisation are keen to take that approach.
It is much easier for my company to create an identity, because as soon as you mention whisky, everyone associates it with Scotland; golf is pretty much on a par with that. Things are not quite as straightforward when it comes to construction, but we could say, "Hang on—Hong Kong was built by Scots." I do not think that we make enough of that. An icebreaker video should allude to traditional symbols of Scotland, such as the Loch Ness monster, whisky and golf, but it could also point out that Hong Kong, which is on China's doorstep, was put together by Scots 150 to 200 years ago. That would create a direct association with different aspects of industry. It would big us up quite a bit to say, "We did that and now we are coming to you to do a bit more."
From the perspective of golf tourism, we—I refer to my role as Carnoustie country golf consultant—had a presence through our agent in China at the recent Beijing golf show and the China open golf championship, which was held in Beijing. In my view, those are the type of shows at which Scotland should have a larger presence, as that is one of the ways in which we can get the message over about what golf and golf tourism in Scotland are all about.
The Chinese golfer knows what golf is, but the Chinese have come in at a higher level, while we started at a lower level. They do not really know what has happened previously, but they want to learn. When they get to St Andrews, they do not even check into their hotel rooms before they are down on their knees on the 18th fairway on the Old course, saying, "Mecca". We have a responsibility to educate them more fully about what Scotland has to offer.
When we first went out to China on the SCDI trade mission last year and met professionals from the tourism industry, it was a huge surprise to us that they had heard of whisky and golf. They did not, however, automatically associate those things with Scotland, and they were delighted when we told them that all those things came from the same wee country, and that they could go there and experience it all. We have great selling tools at our disposal.
With regard to being able to get that across in a practical sense, VisitScotland might have to change its operating procedures. It is currently very hard to find VisitScotland—it has a presence in Beijing and Shanghai, and I presume that it is in Hong Kong as well, but it is tucked up in a wee office somewhere. It seems to be a very passive organisation that waits for people to contact it with information.
VisitScotland already has a lot of information that has been translated into Mandarin, but I hope that it will become more proactive in approaching agencies, particularly the nationwide agencies. It could circulate a video—the "Pride and Passion" DVD, for example—and the brochures that it already has, which are very visual methods.
A key method for getting into the Asian mindset is through television and advertising, and especially through celebrities. If celebrities pick up on something—particularly in Japan and China—such as drinking the new whisky or cognac, hordes of people will start chasing it up. It should be easy to organise a few Chinese celebrities to come over on a familiarisation trip to experience what we have in Scotland, and to get a film crew over so that the trip can be shown on Chinese TV.
I understand that Angus Council has already been involved with Chinese TV stations, but VisitScotland could co-ordinate that at a wider level.
There is, as John Melvin said, a challenge in relation to language. At Edinburgh's Telford College, we have taken on a fresh talent graduate to help with our communications with China. There are perhaps more opportunities through the British Council and its Scottish networks international. It is a great advantage for SMEs in particular to have that support, because there is a language barrier.
We are talking about practical solutions as well as barriers. Fresh talent—Scotland's post-study work scheme—is unique. We still have a competitive advantage in the UK, in that people on that scheme can work in Scotland for two years after gaining a higher national diploma. We use that as much as we can, but there is perhaps an opportunity to branch out and make ourselves more different by moving to a three-year post-study work visa. That would put us ahead of the rest of the UK, so it could be a practical solution.
Whenever we can, we use recognisable, high-profile Scots, from James McAvoy and Ewan McGregor to Sean Connery, depending on the audience that we are talking to. We usually hit on a smile from each generation, if you like, so we have used that to our advantage. As John Melvin said, using Scots who are known worldwide is important.
Scottish colleges can offer an alternative route to a degree. We do not regard our work as just being vocational; the rest of the UK still tends to talk about further education colleges, but in Scotland, we talk about colleges. Our products are vocational, but they are also an alternative route to a degree. Significant numbers of students are now coming through to universities through that route. Colleges can be of particular support to students in the context of changing learning cultures. In addition, education is now regarded as a major business because of the international money that it brings in, not only to individual institutions but to the country as a whole, from foreign students living, studying and working here.
Scholarships tend to be for the university sector—the introduction of the saltire scholarships was wonderful—and for the top end, at PhD level, which is important. However, every country that I travel to talks about the skills agenda, so if Scotland could be seen to support vocational and skills education and give skills scholarships, that could be used to raise the profile of our wonderful vocational education.
Gil Paterson has been waiting for a while to come in.
First, I must declare an interest, because I have been doing business in China for a considerable time.
What clearly comes across from the witnesses, although they articulate it differently, is frustration with the lack of money or resources to deploy in China. The China plan's resources are finite and small. Andrew Hogan's industry probably spends more in a day than the China plan will spend in its lifetime, which shows that only a small amount of money is available.
The witnesses' account of their experience in China answered one question for me: it seems that, because China is so big, people concentrate on a particular geographical area. Would the witnesses advise the Scottish Government to do that with its China plan? Another way to use the plan's limited resources would be to home in on individual sectors. Can the witnesses comment on that idea?
In my experience of the system in China I found that, latterly, I got great advantage from political dialogue: a UK politician would open the door for me by interfacing with the political system in China. In my experience, it is therefore not businessmen but politicians who open the doors. Can the witnesses comment on that and on whether more resources should be put into the political way in? For example, someone from the Government could make quarterly visits to China—although that would take money—and introduce accompanying Scottish businesspeople, opening the door for them and short-circuiting the system. There are three questions there for the witnesses. I ask Laurie Clark to start.
I agree 100 per cent with what you have just said. Although top of the pops for the media at the minute is criticising all politicians for going on junkets, claiming expenses and so on, you guys—from all parties—must step up to the plate and be brave. You must get out to places such as China and help businesses by leading delegations of not only businesspeople but people from the cultural and arts sectors. You should be prepared to say that you are there because you are doing a job and that, although you are spending public money, it is money well spent.
I understand that the media would have a field day criticising politicians of all parties who made such trips, but I agree 100 per cent with you that there would be an advantage to the country and to businesses in missions or trips to trade shows. There would be a benefit in politicians talking to people in the relaxed environment of a hotel lobby or aeroplane, rather than in a formal environment. That would perhaps be a better way of getting the message across.
As I said earlier, at this point in the economic cycle, there is an opportunity for us to regain some of the ground that has been lost, to start spending money and to get out there to engage with China. That is far and away the biggest opportunity open to Scotland at the minute.
There is a great opportunity for us to revive some of the industries that we have lost. The idea that I have been trying to peddle is that we should be trying to revive our manufacturing industry not by digging the iron ore out of the ground and making the engines but by buying the components in China or elsewhere in Asia and trying to get manufacturing going again in this country. We have seen what has happened to our financial services industry. Tourism is probably bobbing along quite nicely at the minute, but it could do better.
I agree 100 per cent with your suggestion. I say to politicians of all parties that they should take the opportunity to go out to China and be prepared to defend their position if they get flak from the media about it.
During the recent mission from the Scottish Government, the minister went to a university in Beijing, and the first thing that I got through my mail was a photograph of the presentation there. It was important for people from our partner institution to show that somebody from the Scottish Government was there. They were proud that their university was selected for the visit. That visit has done a huge amount for our college and our partner and has strengthened the work that we do together. That is a practical example of the benefits that we are talking about. I agree with what Laurie Clark said about those benefits.
Gil Paterson's first question was about geographical areas. Although I agree with colleagues who have talked about working outside the main cities, we still have quite a lot of business in the main cities. We try to diversify into other regions, which we usually select through one of our partners in China—we use word of mouth, contacts and relationships. My recent trip took me everywhere from Inner Mongolia down to Nanchang and Wuhan—cities I had never been to—and was very useful. China is a very large country, with a big educational sector that is looking for opportunities.
On the second question, the China plan highlights support for certain sectors. However, our main areas of business are still English language, which is a major part of our work, dental technology and hospitality management, which are not highlighted in the China plan. There is commitment in the plan to certain sectors, but, outside those sectors, each company, business or educational institution has to focus on its specialties, uniqueness and the key areas on which it can link in with partners in China.
I agree whole-heartedly with what Gil Paterson said. Having experienced at first hand trade missions in which politicians were involved, I have no doubt that politicians help to open doors. You find yourself at meetings and banquets with politicians who have responsibility for different sectors. I have been on missions where I have met politicians who have an interest in tourism, and there is no doubt that they have helped to open doors. Given the strength and power that are to be gained by having politicians with you, such missions are without doubt the way to go.
For example, when we were in Beijing, one of the head politicians from Yantai, which is twinned with Angus, heard that we were in the city, and he took us to a banquet dinner at which heads of state were present.
It definitely helps to have politicians with you. That is one way in which the China plan could go forward.
I also agree whole-heartedly that the regular involvement of senior politicians in trade missions would short-circuit the process. However, I stress that contact with the Chinese Government is also important, so that its prominent politicians can ensure that their businesses and companies are focused and targeted in a useful way. That is where the true interface will occur. If that happened, I would not end up with that pile of business cards, trying to fight my way past people; instead, we could ensure that both sides of the table were engaged.
We are running a little bit short of time. Does Jane Gotts want to say something?
I think that my colleagues have answered the questions extremely well, and that a value cannot be placed on the credibility that is gained from having ministerial engagement with programmes.
SCDI is whole-heartedly committed to working with the Scottish Government and the Scottish Parliament to promote China to as many Scottish businesses as possible. We would be delighted to continue that conversation. Such engagement is particularly useful with regard to China, where a great deal of the process involves Government relations. I know that a key focus of the Scottish Parliament is the international picture, so I think that it would be positive if we could work together in that regard.
As was mentioned earlier, the political nature of China is still evident. The Government maintains either a majority stakeholding or a significant minority stakeholding in the vast majority of companies. That is another reason why making political or ministerial links will help to turn the wheels a bit further down the chain.
My question is for Stuart French. You mentioned the length of time that it takes to build up relationships—I assume that a lot of that involves the building up of trust. You also mentioned Sun Tzu's "The Art of War" in relation to the way in which people do business out there. We do not just have a language barrier; we also have a barrier in terms of our cultural differences.
You talked about the need for Scotland to be China-ready. I know that you are talking about tourism, which involves importing Chinese people, but other businesses are interested in exporting Scottish goods to China. Could you say a little more about what you mean when you say that Scotland should be China-ready? How can the action plan help Scotland to become China-ready? Do not think about resources, as there are probably fewer resources than you would like. Instead, tell us what you think should be done, if we could wave a magic wand.
When I talk about being China-ready, I am talking about people in Scotland being ready to accept the Chinese and look after them in the way in which they expect to be looked after, because there are differences between our ways of life.
We also have to be China-ready when we go to China. We have to understand what we will encounter, who we will deal with, how they like to be dealt with and so on. We should be aware that they apply the strategies in "The Art of War" to business. You have to engage in eye-to-eye contact with the Chinese. That is why I say that you cannot do everything in just one meeting or trade mission. They have to get to know you. They have to look you in the eye, and you have to look them in the eye and establish trust. About an hour into a meeting during our recent mission, the guy I was speaking to wanted me to go down to his office—he wanted me to see his office and he wanted to see that I could show interest in seeing his office.
When people come here from China, I make a point of visiting the hotels, bed and breakfasts and restaurants that we are using, to explain the dietary requirements of the Chinese, which are different—we can handle their diet more easily than they can handle ours. Such cultural differences mean that we must be China-ready, as I call it, to make the Chinese feel at home. I would like a toolkit for businesses in this country to be produced; that would also support businesses from here when they go to China.
I was fortunate in that I had been to China before I went as part of Jane Gotts's mission. I am learning as I go—we are always learning. For people who have not been to China before and have the potential to do business there, being China-ready works both ways.
Thanks. You have provided us with a useful toolkit.
We have run out of time. It has been an interesting session. Before we close, are there any final points that we have not covered and that the witnesses would like to bring to our attention for our report?
An interesting point arose this morning, when Andy Hogan and I were speaking before the meeting. Andy is in the whisky industry and I am in the golf industry, but there is business that the two industries can do with each other in the Chinese market. Trade missions have more than one use—they can bring together people who are based in Scotland and enable them to assist one another in doing business.
The China plan provides the framework; it is up to SCDI, as a business organisation, to work with the other key stakeholders to deliver on that. We are enthused about the opportunities that exist in China and think that Scotland can crack the Chinese market. We are keen for our exports to that market to grow and are committed to working with all public sector agencies to get more businesses out to that market and help them to meet their international objectives.
Thank you all for coming along this morning and for the written evidence that you have provided, which will assist us in our deliberations and in the formulation of our report.