Partnership for prosperity

Offshore Renewable Energy Catapult in Blyth, Northumberland, one of the cluster of seven UK government-owned technology innovation centers, hopes to work as a partner with Chinese companies on offshore energy supply chain development.

"The development of a robust international supply chain is important, and our organization is a potential gateway for Chinese companies, particularly those who are technology-focused," says John Watson, business development manager of ORE Catapult.

At ORE Catapult, companies can make use of the center's world-class research, development, demonstration and testing facilities, with the goal of lowering the cost of renewable energy.

China's energy sector's vast potential in hydraulic fracturing, or fracking, has given Rotary Power of Newcastle upon Tyne great business opportunities, as the engineering company has already given its hydraulic motors to several Chinese companies to test in their fracking systems.

The company, founded in 1976, has a factory of 15,000 square meters in South Tyneside, and makes 7,000 motors a year.

Normally fracking systems take about three years to develop, so by allowing Chinese energy companies to try its equipment early, its motors may be able to enter the market, says Philip Bartin, commercial engineer at Rotary Power.

"The drive for shale gas extraction in China is moving at a very quick pace, and I'm working to position Rotary Power at the forefront of this industry."

The vibrant links established between northeast England and China are facilitated by informed advisers, including the China-Britain Business Council and UK Trade and Investment. In May, UK Trade and Investment led a business delegation to Shanghai and next month it will organize another one to Shanghai and Chengdu.

UKTI also organizes meetings for companies to talk about their experience and discuss a topic. Topics touched on this year include "Growth prospects in the regions of China" and "Agents and distributors".

Zhou Xiaoming, minister counselor with the economic and commercial office at the Chinese embassy in London, has expressed willingness to help businesses in northeast England expand in China.

In August he led a delegation to visit Newcastle, Sunderland and Durham to learn more about the achievements of local businesses in China and the challenges they still face.

As well as visiting the manufacturing facilities of several local companies, Zhou's delegation also attended a roundtable discussion with about 20 companies in the region, and answered their questions about doing business in China.

Zhou said he is impressed with the achievements of the local businesses in China and will help to connect them with Chinese companies in the same industry so that potential partnerships can be established.

He also suggested the model of mergers and acquisitions as a way of expanding in China, because a big wave of Chinese companies is now expanding into the UK by becoming majority shareholders of local companies, and helping them expand in China, too.

"Chinese companies are different from private equity funds when doing M&A because they focus on the long term and they really appreciate the technology capability of the companies they acquire, and want to preserve this," Zhou said.

"They often invest capital in the companies they acquire, allow them to grow and help them to tackle the Chinese market, so it is really a winwin partnership."

After speaking with representatives from several universities, and visiting some of the universities' research faculties, Zhou said he is impressed with the research capabilities he has seen.

"At the moment some universities, including Nottingham and Imperial, have already partnered with Chinese companies to carry out research," Zhou said.

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