In the UK’s 2015 budget report, something caught our eye – this year, exporters are getting a hand from the government.
George Osborne stated that coming in 2015, the UK would be doubling its allocation of funds to UK Trade and Investment activities in China from £7.5 million to £15 million.
This sudden increase in international activity should come as no surprise – for some time, the UK has been trying to break out of the Eurozone bubble and diversify internationally. The exact goal was £1bn in exports by the year 2020.
The £7.5 million increase is just one of many programs that aims to try and help reach this overall goal.
It’s ambitious – that much is for sure. In fact, some are criticising it for one simple reason…
Although panned as a way to increase international trade, the allocation of funds is restricted to exports in China only. Some aren’t too happy with this – many reputable UK business leaders have spoken out against it.
Phil Orford in particular (chief executive of the Forum of Private Business) has spoken out against the laser-vision focus on China, and China only. He believes that a wider spectrum of international trade is necessary to encourage businesses and firms of all shapes and sizes to go international – as it is, China is a substantial limiting factor in who can diversify.
The government does have reason to restrict the trade to China only, though. Here’s the justification.
The money is directed at what the UK does well
The observed goal of this move is to increase the UK’s foothold in China for its most important industries.
Five of the categories that funds are going to:
- financial services
- advanced manufacturing
- energy and infrastructure
- creative industries and education
- healthcare and life sciences
If you’re based around any of these industries, you may have some help heading your way. Even if you’re not, you may still have some help coming your way…
Phil Orford also said that in addition to his criticism, more stimulus would be needed in order to hit the goal of £1bn by 2020. He joins hundreds of other business owners and authoritative sources on their viewpoints that more is needed… not a small boost to certain industries in China only.
Specifically, Carl Hasty (international director of payments at SmartCurrencyBusiness.com) is worried about China’s somewhat-unstable currency – he believes that investing so heavily in one country and one currency could potentially lead to unfavourable exchange rates, and as a result, revenue losses for businesses all over the UK.
How effective will this plan be? Only time will tell. Many believe that it’s an important step forward. But only one thing is absolutely certain…
Our take on it: expect more international funds
Considering the exclusivity of this current fund increase, the UK will have to do something for all industries over all countries if we hope to hit the £1bn goal. We at Bubbles Translation Services see this as a stepping stone – nothing too influential, but definitely indicative of an overall goal.
In today’s economy, the government isn’t sending out funds left and right – any cash flow increase is significant of a certain goal or mission.
The mission for the UK’s 2015 increase in export funds is to increase national trade. We’ll say it before, and we’ll say it again: international trade is going to become more and more important throughout 2015 and beyond. This is especially the case for markets that are a little further afield geographically as we experience slow growth domestically and a stagnating Eurozone.
Check out our Infographic on key market growth for a bit more insight.
Get on board to ride the wave… or get left behind in the wake of your competitors.
Get in touch with Bubbles today for all of your translation needs, and be on the lookout for any additional spending increases to international trade from the UK government – we’d bet that they’re coming.