During the pandemic sales to China give UK companies the advantage of being able to benefit from a more profitable type of business, allowing them to invest more in the wellbeing of their employees, according to Carolina Boarini and Matteo R. Milanesi
Within the context of the economic crisis caused by Covid-19, news reports outlined that US President Donald Trump has implied that China has been the cause of the virus.
If this were true, Beijing would have eliminated 91% of UK exports to China over the past 10 years in one fell swoop.
On the other hand, there is a direct correlation between the export rate of companies in the UK towards China and their willingness to invest in the wellbeing and improved working conditions of their employees.
According to data provided by Statista.com, it is estimated that the UK GDP for the second quarter of 2020 will fall by 35% compared to the first quarter of 2020, with losses equal to 179 billion pounds.
Unemployment, which was 3.9% in February and March, is estimated to rise to 10% in the second quarter of 2020 (Statista.com).
By contrast, Beijing is the UK’s third largest trading partner and has been crucial to the development of British companies over the last ten years. Against an estimated loss of 179.6 billion pounds due to Covid-19 (ONS.gov.uk and Statista.com), exports to China between 2008 and 2018 generated a total of $197.4bn USD in turnover for UK companies (according to Wits).
China’s influence is also indirectly reflected in the wellbeing and quality of working life of British employees, thanks to the higher profits and liquidity available to companies with a significant export share and thanks to the purchasing choices of Chinese customers, often oriented towards high-end products.
The two companies of our group, Boarini Milanesi and Proleven, are quite different: the first is a luxury handbags brand, while the second offers consulting and training services for human resources in the field of team development and employee wellbeing. However, we have noticed positive effects from trading with China in both companies.
With
regards to Boarini Milanesi handbags, 30% of the sales made by the Client
Relations Managers at our UK branch are to clients from China or of Chinese
origin living in the UK, with an average purchase value of around £16,000 GBP compared
to an average of £5,200 GBP for consumers in the UK.
This gives us the huge advantage of being able to spend more time with each client, allowing our UK sales staff to benefit from a higher quality of working life and lower stress levels.
China’s importance has also emerged in internal statistics, compiled by
Proleven’s employee welfare division, directly correlating the impact of exports
to China on the turnover of UK companies and their spending to improving the health
and wellbeing of their employees.
The top 10 UK companies that spent the most on Proleven’s workplace wellbeing programmes in 2019 (averaging at £180 GBP per employee per year), have a share in exports to the Chinese market of about 7.5% of their turnover, compared to a national average of 6.9%. If we then look at the second 10 classified, this figure drops to 6.1% and even further to 5.3% for the third 10.
We can thus say that sales to China give UK companies the advantage of being able to benefit from a more profitable type of business, allowing them to invest more in the wellbeing of their employees. This triggers a virtuous circle of higher productivity and better quality of work, all of which benefits the UK.
Carolina Boarini is Co-Founder and Co-CEO at Boarini Milanesi and Proleven
Matteo R. Milanesi is Co-Founder and Co-CEO at Boarini Milanesi and Proleven
