As 2024 comes to an end how did China-UK trade fare? The year started off well with shipping rates rising sharply before the tinsel was even put away. A trend driven by a the virtual closure of the Red Sea route to Europe. After a short respite in the spring the container rates continued their upward trend until late July. This was driven by a combination of ongoing closure of Red Sea routes plus a rush to deliver EV’s by Chinese car manufacturers to various countries in the Americas and Europe in a bit to beat new punitive tariffs which were threatened against the import of Chinese electric vehicles which resulted in very heavy extra demand on shipping resources. The shipping lines also cut availability to further add fuel to the fire pushing prices up further. This had a very noticeable effect on orders and sales in certain categories of goods, especially low value items and large and bulky items such as furniture and building materials where orders were delayed or even cancelled. Rates have fallen back over the past 4 months and are now closer to historical long term rates although still a little higher than at the end of 2023. As a result we have seen an upturn in enquiries and customers re visiting their options and placing orders.
Closer to home major UK ports remain congested with delays in vessel arrivals. The road infrastructure from the UK’s largest port Felixstowe remains remarkably poor with frequent delays and road blockages on a small 2 lane highway leading to an unreliable service to customers. This has reached a peak with a recent announcement by one of the Major shipping lines Maersk that they are relocating many of their larger vessels to London Gateway.
Exchange rates for the GBP against both the dollar and Rmb have been positive for importers but not such good news for those looking to export to China. The GBP/Rmb rate remained fairly level for the first six months of the year around the 9.0 level with a sharp rise in June to a peak of around 9.4 before falling back to 9.1-9.2 GBP/Rmb by the end of the year. The dollar – Stirling exchange rate was more volatile after remaining fairly stable for the first 6 months it rose to a peak of 1.34 USD to GBP before falling back again at the end of the year to around 1.25 – 1.26. Stability in currency exchange rates is important to international trade as it allows both suppliers and buyers to plan and budget more accurately.
Politically it has been an interesting year with both a change in administration in the UK and the election of a new president in the USA. In the UK the new government offers a promise of stability which will be welcome after the turmoil of the past couple of years. Whether this is delivered remains to be seen. The government does seem to have a less hostile approach to relations with China which is most welcome. The new president elect in the USA offers the spectacle of trade restrictions and a more challenging relationship between them and China. Whether this plays out in practice remains to be seen and the reality may be much more pragmatic and harmonious. There has however been suggestions that China may devalue its currency to boost exports in response to any trade restrictions which of course would benefit buyers.
The range of enquiries we see from companies looking to purchase from China remains astonishingly wide from electronic goods, through bespoke clothing, moulded products, printing materials, building materials, toys, sports equipment, vehicles, vehicle parts and home furnishings. Our product development and production service helping clients bring new products and new designs to market remains very busy with an increase in the number of enquiries over the past year.
Our logistics department has seen increasing levels of movements both by sea and by air and our warehousing and LCL loads service remains very popular.
On the export side we have also seen a very busy year and have been able to help a wide range of companies establish or expand their exports to China and set up operations there. The demand for high quality top end Western goods remains high in China, despite the relative slowing in China’s economy. Negotiating China’s legislative requirements remains challenging but handled correctly can lead to rewarding results and China is certainly ‘open for business’.