New report shows Manchester - Beijing service is a major catalyst for the Northern Economy
The North of England is reaping the rewards of its ever-stronger ties with China, according to research released today.
Driven by two years of direct flights between Manchester Airport and Beijing, levels of growth in trade, tourism and knowledge exchange between the North and the Far East are outstripping national averages.
Chinese companies are increasing their investments in the North of England, furthering a trend sparked by President Xi Jinping’s historic visit to Manchester nearly three years ago.
This “golden era” of relations between the North and China was revealed in an independent study launched at the British Embassy in Beijing this morning by Greater Manchester Mayor Andy Burnham.
“The China Dividend: Two Years In” has tracked the economic, social and cultural benefits that have been felt across the North in the two years since direct flights began.
The findings of the study by independent consultants Steer Davis Gleave include:
- A 38% increase in the number of Chinese visitors to the North since 2016 – a growth rate higher than both London and the UK average. The UK average is 30%
- The average spend per visit in the North West increased by 94% to £2,167 and is now 5% higher than the national average
- The number of Chinese students in Greater Manchester has grown 9% in two years vs national growth of 4%
- A 114% increase in Northern students gaining Chinese internships, with more than 70% from low income backgrounds
- The Manchester-Beijing route has grown faster than any other UK-China route that has been in operation for more than 12 months
- Export values from Manchester Airport to China grew 41% to £1.29bn in the two years after route launch, while national values fell 30%.
Mr Burnham launched the report ahead of participating in the World Economic Forum, in Tianjin, where he was due to meet with global leaders and speak on a range of subjects, including smart cities, healthcare and green manufacturing.
He said: “Greater Manchester has an ambition to sit at the heart of a productive, culturally rich and internationally competitive Northern economy.
“To do that, it is vital the North has strong connections with high-growth markets like China, which we have been working hard to develop over the past five years.
“Central to our ambition are direct air links, and the China Dividend study demonstrates that good connectivity is not just about getting people and products from A to B, but the wider impacts that they have on so many aspects of peoples’ lives at both ends of the route.
“All parts of the North are benefitting from the economic, social and cultural connections that have forged as a result of the region’s first ever direct service to mainland China launching two years ago.
“We’ve really seen the success of the first route to China from Manchester Airport, so we hope to see more being added in the future.”
The report was launched at an event hosted by Her Majesty’s Trade Commissioner for China, Richard Burn, who said:
“UK-China bilateral trade links have never been stronger: in 2017 UK-China bilateral trade expanded by 15.1% to reach a record £67.5bn, whilst UK exports of goods and services to China grew by 28.5%. This report demonstrates the clear benefits of direct UK-China linkages for facilitating flows of trade, investment and people between our two countries. I’m delighted to see Manchester and the surrounding region benefit so much from this flight connection to Beijing.”
President Xi announced the Manchester-Beijing route, with Hainan Airlines, during his state visit to the UK in October 2015, with the service starting in June 2016.
The China Dividend report has shown that, in the second full year of its operation, the positive impacts associated with the route have become more pronounced and more widespread – benefitting more people and businesses and spreading to new parts of the North.
For example, enquiries received from Chinese businesses interested in setting up UK bases in the first year have now been converted in year two, creating hundreds of jobs in key sectors like life sciences, energy and infrastructure.
There has been a major increase in the number of students from low income backgrounds who have been given the opportunities to complete internships in China, while there has been a surge in the number of world-leading academics attracted to carry out research at Northern universities over the past year.
Meanwhile, Chinese investors have committed hundreds of millions of pounds into big infrastructure schemes across the North over the past 12 months, including projects in Greater Manchester, Sheffield, Liverpool and Lancashire.
Manchester Airport CEO Andrew Cowan said: “This is important research because it demonstrates the power of direct connectivity to fast-growing economies like China.
“While people could always travel to China by transferring at other airports, we were clear in our minds that securing a non-stop service would unlock a wide range of benefits for our city and the wider North.
“SDG’s study shows that this has proven to be the case, with the route serving as a catalyst for significant increases in trade and investment, tourism and academic collaboration.
“We are committed to driving growth across the North by connecting it to the world’s most important markets and, we are confident of securing links to other high value economies in the months and years ahead.”
The China Dividend report predicts rapid growth in demand for travel to the UK, as the Chinese economy continues to expand.
It suggests Manchester – and the wider North – is well placed to capitalise on this, with a wealth of natural, cultural, sporting and economic assets that appeal to the Chinese traveller.
But it underlines the importance of the UK being seen to be “open for business,” in terms of encouraging the stimulation of further air links, maintaining an welcoming visa process and investing in technology that improves the visitor experience.
The study points to the importance of large-scale investment in Northern transport infrastructure, to ensure all parts of the North benefit fully from the existence of direct routes, while stimulating fresh air connectivity by increasing the catchment area of Manchester Airport.
The study compiles findings from both British and Chinese economic consultancies and was commissioned by the Manchester-China Forum, set up in 2013 to forge closer links between the two locations.
David Percival, managing director of Deloitte’s China International Business Development Group and chair of the Forum, said: “The findings of this report make clear the tremendous progress made in advancing Manchester and the wider North’s relations with China.
“As the benefits highlighted in this study reveal, there is significant potential for Manchester and the North to play a leading role in progressing the next phase of bilateral ties between our nations.
“Nonetheless, in order to ensure the benefits of this golden era of relations are felt throughout the UK, it is critically important that national strategy reflects the vital role regional economies and assets like Manchester Airport play in bringing our people, businesses and institutions closer together.”
Zheng Xiyuan, Consul General, People’s Republic of China in Manchester, said:
“It is an exciting time of opportunity in the golden era of China-UK relations. I am delighted to have recently taken up the post of the Consul General for the People’s Republic of China in Manchester.
“Over the past two years since the establishment of the direct flight to Beijing, the North of England has continued to experience rapid growth in trade and communication with China.
“Each year there are more students, tourists, and businesses coming to Manchester to experience the unique charm, culture and opportunity that the North of England has to offer.
“With our ever-closer social, economic, and cultural links, the North of England is well placed to collaborate with China on major strategic opportunities spearheaded by the Belt and Road Initiative. I look forward to seeing a closer China-UK relationship bringing prosperity to the people of both nations.”
To download a copy of the report: https://we.tl/t-GCo8YbBnv3
Comments by area:
Rhys Whalley, Executive Director of the Manchester China Forum
“This week puts Manchester firmly in the hearts and minds of Chinese businesses. This direct air route via Hainan Airlines is a key enabler for business cooperation and we’ve seen significant economic impact in the last two years since it launched. Equally importantly, the fact that Andy Burnham has been invited to speak at the World Economic Forum shows how Manchester’s global reputation is growing, which will be further reinforced by a program of strategic political engagement in Beijing, Tianjin and Shenzhen. This visit provides an excellent opportunity to showcase the best of Greater Manchester as well as to land strategic partnership and investment opportunities with leading industry players in areas that are core to the city’s future ambitions”
Prof. Dame Nancy Rothwell, Vice-Chancellor, University of Manchester
“China is a major market for us with nearly 5,000 Chinese students studying at the University of Manchester, overseas centres in Shanghai and Hong Kong, and partnerships with many of China’s leading academic institutions. The direct flight is important for both promoting Manchester and for our broader student experience, enabling us to attract top talent to our international research and development programmes.”
Iain Mackenzie, Store Director - Harvey Nichols Manchester
“Harvey Nichols Manchester continues to welcome visitors from all over the world, with a growing number of tourists and students from China and Hong Kong.
“The ever-increasing connectivity of routes into Manchester Airport continues to position Manchester as a truly international destination, bringing benefits to businesses across Greater Manchester and beyond.
“Harvey Nichols is dedicated to offering international shoppers a tailored welcome with multi-lingual Personal Shoppers and specialist instore services such as Global Blue Tax Free shopping, international payment services from WeChat Pay, AliPay and China Union Pay, plus complimentary gift-wrapping and hotel delivery.”
Yu Dongwen, Lead Director, BCEGI UK
“At BCEGI we have developed a strong relationship with Manchester. Since the announcement of Manchester–Beijing direct flights, BCEGi has been involved with £2.6 bn of projects in the region including Airport City Manchester and the Middlewood Locks development in Salford. We are delighted to help maintain close ties with Greater Manchester and the wider region as it looks to develop and realise the Northern Powerhouse vision.”
Jamie Bettles, Managing Director, InternChina
“I am delighted that the direct air route has contributed to our recent success and we have seen 114% year-on-year growth in students from the North of England taking internships in China since 2016. This year our student numbers from the North West and Yorkshire regions have increased at more than three-times the rate of that in London and our growth is expected to continue during 2019. The direct route makes return flights to our destinations in China far more convenient, and we hope that additional routes will continue to connect young people from the North West with China”.
Mick Bonney Director of Sales and Business Development, EDM
“China remains our number one priority with potential future business over the next 2-3 years of between £10m-£15m."
Manchester-based flight simulation experts EDM are one of the region’s export success stories. In the first half of 2018, it has delivered an A330 cabin evacuation trainer to China Southern Airlines and is working on a similar system for the A380 aircraft. It has also secured two orders with China Eastern Airlines.
Tom Russell, Managing Partner, Alliance Investments
"As we work with hundreds of clients in China, additional connectivity with major Chinese cities would be hugely important for us. Manchester is becoming the best place to invest in property and we have seen a notable increase in interest from China since the Beijing route launch. These routes further the brand recognition and practicality of the North of England, bringing great benefits for many industries across the region.”
John Tasker, International Partnerships Manager, East Asia, University of Liverpool
“The University of Liverpool’s main Chinese partnership is with the Xi’an Jiaotong Liverpool University (XJTLU) joint school in Suzhou.
“XJTLU is an independent university established via a joint venture between the University of Liverpool and Xi’an Jiaotong University (one of China’s top universities). Students at XJTLU are awarded dual degrees from both the University of Liverpool and XJTLU and have the option to complete all 4 years in China or articulate to Liverpool for their final 2 years.
“XJTLU is also expanding to a new campus in Taicang, the Chinese area twinned with the Wirral. It is hoped that this may bring with it more interest from Chinese students in the wider region of Liverpool.
“Additionally, the University of Liverpool School of Medicine collaborates with one of the largest research hospitals in China, Sichuan University at West China Hospital. This arrangement works well for both partners by bringing together expertise from each and the vast Chinese database of information.
“There are also even commercial partnerships underway between China and the University of Liverpool. For example, the £2m Newton Fund project for hydrogen vehicle production in collaboration with Wuhan based company and Huazhong University of Science and Technology.”
Michelle Brown, Marketing Manager, Visit York
“The direct flight to and from Beijing marks a milestone for our relations with China. As a major international gateway into the North of England, the direct flight opens up a world of new opportunities for York, Yorkshire and the North of England, both for tourism and investment generally. China has moved rapidly from the 11th largest overseas tourism market for York to ranking 2nd place behind the US.”
Mark Lynam, Director for Programme Commissioning at Sheffield City Region
“A number of firms in the Sheffield City Region area have seen success in trading with China.
“These businesses make the most of the niche opportunities China’s maturing market is presenting, focusing on high end manufacturing and innovative technology.
“There tends to be particular success in the region by developing links with Chinese cities which are lesser known in the UK, where these opportunities are otherwise undiscovered.
“This direct flight from Manchester to China is therefore of great benefit to businesses not just on the west of the Pennines, but across the North.”
Kenny Murray, Centre Manager of Cheshire Oaks
“Chinese visitors are a significant market for Cheshire Oaks Designer Outlet, comprising over 50% of our tax-free sales. Since the launch of direct flights from Hong Kong and China, our tax free sale volumes from these markets have grown over 165%, supported by our in-market sales and marketing teams, and close cooperation with Marketing Cheshire and Marketing Manchester to leverage the increased flight capacity into the region.”
Carl Emery of Harris and Howard Tailors in Alderley Edge
“Probably the best example of how the route has benefited us is in terms of productivity. We had a problem with a supplier, with the distance between our headquarters and theirs exacerbating the situation. I made a decision to pay the firm a visit in person and, from leaving my desk in Alderley Edge at 9am on Monday, I was able to spend 18 hours on the ground resolving our issue, while also visiting several other suppliers, before being back in Cheshire before we opened on Wednesday morning.
“China is an amazing place and I feel its economy is bubbling, which has led me to conclude the tine is right to launch ourselves there. We will open our first store in Shenyang and will use the Manchester-Beijing route as the fastest and best value way of getting there. Hopefully, we will open a further branch in Beijing in 2019!”
Jennifer Cormack from The Lake District China Forum
"The Lake District has seen incredible growth in the number of tourists from China since 2016, creating jobs and bringing success to our local businesses. Having a direct flight from Beijing into Manchester has opened an entirely new itinerary for Chinese visitors, as we see more independent travellers, students and group tours wanting to experience The Lake District during their stay in the UK."
Joe Cobb of the Lake District Country Hotels and Chair of the Lake District Hoteliers forum
“There is clearly a positive Impact. Trying to quantify it could be tricky however as not all of our guests state their address and there alright shortfalls in our PMS (booking system). The information that is available to me however, suggests that room nights from year to year have almost doubled at one of our properties and the others have shown strong growth.
“In my opinion, the enhancement of the routes from China to Manchester, have a strong correlation to growth in average room rates within the Lake District. We know that the Chinese market are the highest spenders per capita and clearly have a strong affiliation with the UK and the Lake District in particular. Business is often London centric, so for Manchester Airport to be able to open doors, it is greatly appreciated and well received during this difficult period for hospitality businesses.”
Barry Leahey, Managing Director of Playdale Playgrounds in Ulverston, Cumbria
“Playdale now exports to 49 countries around the world. However, despite having no orders from China prior to the direct route launch, it is now a major market for us, with a tenth of all exports going to China. We have seen a 30% increase in exports to China this year and our work includes the Olympic Park Playground in Beijing which has been featured by CCTV and China Weekly.”
Deputy Vice-Chancellor Liz Bromley, University of Central Lancashire
“A key milestone the University of Central Lancashire’s relationship with China is the development of a research company in Shenzhen, UCLan Technology (Shenzhen) Limited. Originally focused on nanotechnologies relevant to medicine and engineering, the company has evolved with the support of the Shenzhen Municipal Government. The company works with both UK and Chinese start-up firms who are looking to establish a presence in China and the UK, providing support to secure funding, advice on intellectual property, and has proposed the provision of incubator facilities in both Shenzhen and the North West of England.”
David Thornley, Group Credit Controller, Fort Vale Engineering
“To accommodate the growth of our business in China, Fort Vale Engineering has been able to invest heavily in new facilities and equipment, creating over 50 jobs in Lancashire since 2016. The Chinese market now accounts for 75% of our total revenue, up from 60% in 2016. The strong regional links to China have benefitted our ability to trade with China and we hope for this to continue."
Fort Vale Engineering, in Burnley, Lancashire, has boosted trade and created jobs as a result of improved links with China. Its Chinese market has grown 4.8% in 2017, with a further 6.7% forecast this year.