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Renewables and textiles, the opportunities for Spain in China in the 'postCovid' era

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The coronavirus crisis will mark an economic before and after. But there will be a constant: trade relations with China will continue to be a priority. This year, The Asian giant is going to accuse the pandemic and reduce its growth to 1.2%, to soar to 9.2% in 2021. And, there Spain has to play its tricks if it does not want to be left behind, according to a report by HSBC which looks at opportunities for companies in China and the Asia-Pacific region.

The report prepared by the financial institution highlights that China will continue to deepen its transformation, in which private consumption and service activities have become increasingly important economic engines. And there, Spain has competitive advantages in sectors such as textiles, renewables or urban services. "In this context of change in the second largest economy in the world and the leading commercial and consumer power, an important window of opportunity opens for the increase in economic-business relations with Spain," says the financial entity.

POPULATION OVER 65 YEARS OLD

There is room for improvement because there is an obvious margin for increasing the presence of Spanish consumer goods in China, for example, in textiles, footwear, household items and for children, since consumers are looking for products with greater security and quality. Also in the ‘third age’, because in 2050, one in four Chinese will be over 65.

"E-commerce platforms can open significant market opportunities in 2020 with lower setup costs," says HSBC. "The Asian country continues to need to increase the capacities of its industry, where there are also opportunities for Spanish companies, in sectors such as automotive components, capital equipment or sanitary equipment"

Investing in China is not a road of roses. HSBC assumes that "the maintenance of investment restrictions supposes a greater arrival of companies”But, still, there are“ opportunities in sectors such as renewable energy or water treatment ”. "There are opportunities here for Spanish companies in the management of urban services, especially in the management of water and waste, or smart cities, where Spanish companies have evident strengths."

At the moment, the presence "Spanish business in China is modest and is largely to build," says HSBC. "The Asian giant accounts for only 0.66% of Spanish investments abroad and the Spanish investment only represents 0.1% of that received by China ”. At the moment, that market remains in position 22 as the largest Spanish investment destination and there are 600 established companies. Much room for improvement remains.

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