Brexit, Britain, and Beijing

　　International business is never an easy place to predict change, and with Brexit looming, uncertainty is running high. One question is what Britain’s withdrawal from the European Union will mean for U.K.-China trade. To get a better handle on this important trade relationship, both as it stands now and how it may evolve, EE Times met with Syrus Lohrasb, CEO of the China-Britain Business Fusion Group. The consultancy assists both U.K.- and Chinese-based companies with their respective market-entry plans, helping build relationships with decision makers within the respective target countries. The company provides assistance with everything from real estate to equity investment and even the educational needs of employees’ children. It is thus well positioned to provide a comprehensive perspective on Brexit’s implications.

　　The Chinese government regards developing market sectors more favorably than legacy technologies and businesses. Areas of focus include artificial intelligence, robotics, alternative energy, and electric vehicles. For example, Lohrasb said, Beijing’s approval of a plan to make China the global leader in AI by 2030 has created additional opportunities in that sector.

　　EE Times: One issue in China is uneven development. Money is being applied in irregular places, so you’ve got infrastructure in some places that is very advanced, while in nearby places the infrastructure is a legacy from the ‘60s. How does that affect doing business with China?

　　Syrus Lohrasb: I think that when you do business with China, you need to travel extensively throughout the country and find out what that beautiful country is all about. You will come across a very ancient culture, and you’ll understand that this culture is deep-rooted. You will begin to understand that some of that culture needs to be preserved. It may be outdated ... but there is a reason behind it. There is balance.

　　When the Chinese government talks about a harmonious society, they truly mean it. You cannot have [just] an advanced society in terms of electronics and machinery and the future when you’ve still got a very strong past. You need to create a balance between the two within the society.

　　EET: In light of that, do you see Brexit through the eyes of the Chinese as a risk or an opportunity?

　　Lohrasb: It’s a great opportunity for the Chinese, and we can see that already in a number of sectors. It’s no longer about buying football clubs; it’s more about innovation, it’s more about technology. It’s more about things like the purchase of U.K. chip designer Imagination [in September] for ?550 million [$726 million] by a Chinese private-equity firm. [Imagination was valued at] ?600 million back on June 23 of last year. So, you can see where Brexit has had an impact with respect to M&A deals. A cool savings of ?50 million is big attraction for the Chinese.

　　On challenges

　　EET: Having said that, what are some of the challenges you see?

　　Lohrasb: I think there are concerns that the U.K. is losing some of its prime assets, not just to the Chinese but also to other countries. The challenge is to make sure that although there is what is perceived to be a loss of assets, a company’s operation continues to create jobs and prosperity for United Kingdom.

　　This is a challenge, if you’re not looking at a company that comes in, strips assets, and takes them back to their home country. Development of operations in the U.K. is a challenge. Obviously, Brexit has caused a lot of uncertainty, especially in the financial services [sector], which is the jewel in the crown, so to speak, in the U.K. And financial services have a tech dimension.

　　It’s important to preserve these prime assets — or the Square Mile, as they say, in the City — and make sure that they’re not impacted very badly. … I think the challenge is how to do that, and I think there are solutions that Prime Minister [Theresa May] is looking at in terms of passporting, in terms of staying in single markets, in terms of meeting a transitional period where Britain will have a respite in organizing itself.

　　It’s a question of money. It’s coming down to money now, and how much the U.K. has to pay to get out of the European Union. But I always say the United Kingdom needs to be part of a continent. We are not part of Africa; we’re not part of Asia; we’re not part of America. We have to be part of Europe. And we continue to do this [despite Brexit]. We continue to build friendship with the Europeans.

　　On money and markets

　　EET: What is your organization doing, or what are your plans to help other companies and help these partnerships either become stronger or create new ones after Brexit, in the wake of whatever the transition is? What are some of the things that you’re going to do to improve the business environment?

　　Lohrasb: I think the strategy is twofold. One concerns the fact that China introduced a measure to slow down the outflow of capital last November As I said earlier, what’s good for China is what they’re looking for, and that’s what we have looked at — pursuing markets or industry sectors that China is looking for. We identified artificial intelligence as a market that they’re looking at in terms of advancement in the technology space, [and] we set up for the very first time, never done before in United Kingdom, what we called the China-Britain Artificial Intelligence Summit. The purpose of the summit was to create momentum within the two markets. We brought highly distinguished speakers from both countries to speak on the subject of investment opportunities and on the subject of ethics, which concerns a lot of people in terms of the impact on job opportunities. We brought robotic companies from China to display their robots on the stage at the Institution of Engineering and Technology [in London] in September.

　　I said [the strategy] is twofold; the other side is obviously Brexit. We want to make sure that the United Kingdom is still known as a very vibrant target for companies to come here, settle down, and create momentum for an onward journey to Europe as well as the United States. We want to continue recognizing the United Kingdom as a gateway to world markets.

　　That’s what we want to do. Progressively we are pursuing the artificial-intelligence market for both countries [China and the U.K.]. Going forward, we are talking to a lot of people to create a roadshow in China, taking British companies as well as European friends to Shenzhen, Shanghai, Beijing, to take the China-Britain AI summit to those cities.

　　EET: AI is a key enabling technology for automation, because robotics technology driven with artificial intelligence can solve things from vehicle congestion issues all the way up to autonomous military systems.

　　Lohrasb: Absolutely. When you look at the two markets, China is very much industrial-forward-driven now. They are very much into robotics, especially in heavy industries — in automotive, for example. Of course there are other sectors [that pose opportunities], but we have to identify which of one country’s markets can complement the other’s markets, rather than push our own similar capabilities on each other. I think this is what we want to do, the integration of hardware and software, and I think when it comes to electronics this becomes much more evident.

　　This is how we have to go forward — looking at the TV, for example, when you’ll turn it on by voice or facial recognition so it goes straight to your favorite channel, and then it will ask you if you want to switch to another. I think there’s a lot we can do in terms of integrating AI with electronic devices. A robotic company called Zige Education Robotics came to the U.K. and  presented on our stage; they are in education. The aging population in China needs to be addressed, and robotics care in medtech is going to play a huge part in that.

　　These are the sectors that we’re looking at now. The tree is really ripe for the picking, and that’s what we want to do, not only for the sake of the financial gains but also to help the two nations.  We have to get the best out of the new age of electronics. If you look at more energy-saving devices as we integrate hardware with software to move cost centers to lower-cost regions, we can do that.

　　We [in the U.K.] are not anti-European; we are very much European, and the U.K., especially London, will continue to be resilient. I think my last word is, don’t believe everything you read.