Scotland can tap into strong China trade links to ride wave of its economic recovery

Scotland can tap into strong trading links with China in taking forward its recovery from the COVID-19 pandemic, says a British business association leader, as new data suggests that up to 10,000 jobs in the nation are supported by ties with the world's second-largest economy.

Matthew Rous is chief executive of the China-Britain Business Council, which is also known as the CBBC; a leading organization in the promotion of trade and investment between the two nations.

He said: "Nations across the world are grappling with the economic impact of COVID-19 and Scotland is in no way alone in having lost exports and jobs to this once-in-a-century catastrophe."

But, he added, with "the growing appeal of Scottish products and services" palpable right across China, "Scotland has the right mix to ride the China recovery wave".

A new report about UK jobs that are dependent on links with China that was commissioned by the CBBC from global consultancy Cambridge Econometrics demonstrates how that trade is impacting the lives and livelihoods of people in Scotland.

In all, Scotland's economic ties with China support up to 10,000 full-time equivalent jobs. The findings show the bulk of those jobs - some 5,000 to 7,000 - are tied to trade in goods.

"The oil industry is particularly important, thanks to the surge in exports of crude and related products from Scotland to China in recent years," Rous said. "But renewables too are a big part of the story. As China looks to diversify its energy sources, this will provide the underpinning for a growing number of jobs in Scotland."

And Scotland is due to host the UN Climate Change Conference COP26 in 2021.

With its recently announced new five-year plan, China is redoubling its efforts to make consumers the key engine of economic growth. Rous said what this means for Scotland is "an ever-growing market of wealthier, highly educated Chinese people keen to buy premium products like whisky and salmon".

As the world's largest spirits market, China has become an important emerging market for Scotch whisky. The value of direct exports of whisky has grown from less than 10 million pounds ($13.4 million) in the early 2000s to around 89 million pounds in 2019, with much more potential to grow, according to the Scotch Whisky Association.

China is also one of the world's top three markets for Scottish salmon.

The popularity of major Scottish exports in China is one reason why the nation has become such a popular destination for Chinese tourists. That, in turn, is feeding into jobs growth, with Scotland now home to nearly 10 percent of British employment linked to tourism from China. Edinburgh alone has an estimated 1,200 jobs supported by Chinese visitors' spending, Cambridge Econometrics estimates.

Scotland's success in attracting Chinese students has been another source of jobs growth, the report finds. During the last five years, Chinese student numbers at the University of Edinburgh and University of Glasgow alone have increased by a combined 3,250. Employment supported by their spending has risen by 55 percent to 1,700 during the period.

Given China's still-massive potential, Rous said maintaining and expanding Scotland's ties in trade, tourism and education has the potential to be a vital growth driver in the years to come.

China was the first nation to experience the novel coronavirus crisis and the first to recover. The country's retail sales, a key indicator of consumption, rose by 5 percent in November on a yearly basis, up from 4.3 percent in October, while industrial output increased by 7 percent year-on-year last month, according to the National Bureau of Statistics.

"Scotland has the right mix of industrial and soft power appeal to embrace this tide and to ride the China recovery wave," Rous said.

He said while the two sides may not necessarily agree on everything, Scotland must "nurture its relationship with China, pressing for improvements through dialogue, while continuing to engage in ways that not only help to make Scottish voices heard but also benefit Scottish workers".