2.

2 Trend Analysis and Discussion of Industry and Firm-level

2.2.1 Exports of UK to Its Main Host Economy at the Industry and Firm-level
The United Kingdom of “Great Britain and Northern Ireland”, usually known as the United
Kingdom, in 2020, delivered US$ 401.9 billion in products worldwide. The dollar indicates a
decline of -2.3% since 2016 and a decline of -14.2% from the previous year. The UK Pound
declined by 5.3% from the US Dollar in 2016 based on the average exchange rate for 2020 and
climbed by 0.4% from 2019 to 2020. British exports in somewhat lower US dollars are
substantially cheaper to overseas purchasers because of its stronger local currency in 2020.

UK's largest export value items were vehicles, gold, turbocharges, dosage drug mixtures, and
raw oil by 2020. In all, 25.5% of the total sales from the United Kingdom exports account for
those main exports. These items provide a wide variety of things that are exported. The UK is
one of the world's leading countries in exporting parts of aircraft, platinum, and gold. The latest
country-specific data indicate that imports from the UK have bought 68.4% of products: "the
United States (14.8% of the global total), Germany (10.5%), Ireland (7.1%), Netherlands (6.4%),
France (6.1%), Switzerland (5%), China (4.8%), Belgium (3.5%), Spain (2.8%), Italy (2.8%),
Hong Kong (2.7%) and Canada (1.9%)".

Table 5: UK exports by region (2010-2020)

Country Percentage
EU 54.80%
US 14.80%
Germany 10.50%
Italy 2.8%
France 6.10%
China 4.80%
Spain 2.80%
Japan 3.20%
Hong Kong 2.80%
Canada 1.90%
 Percentage
60.00%

50.00%

40.00%

30.00%
Percentage
20.00%

10.00%

0.00%
EU US an
y ly ce a ain pan on
g da
m Ita r an Chin Sp Ja K ana
r F ng C
Ge
Ho

Fig.5 UK exports by region (2010-2020)

The graph shows the data of UK exports by region from last ten years. From a continental point
of view, 54.1% of UK-based exports were sent to other European nations in comparison with
46.1% to EU members. Furthermore, the Asian importers sold 21.2 percent. The UK transported
an additional 16.5% of items to the United States. Africa accounted for less (2.1%); Australia,
New Zealand, Oceania (1.5%). Latin America excluding Mexico and includes Caribbean Latin
America (1.3percent). Given the population of 67.3 million in the United Kingdom, its total
exported products worth $ 401.9 billion in 2020 amount to almost $6 000 per citizen of Western
Europe.

Table 6: Overall exports of UK (2010-2020)

Exports Value US$ change

Aircraft parts $11,143,633,000 -30.30%
Alcohol (including spirits, $6,264,768,000 -20.50%
liqueurs)
Blood fractions (including $5,065,623,000 -31.60%
antisera)
Cars $26,753,900,000 -30.70%
Crude oil $16,118,334,000 -31.90%
Gold (unwrought) $21,047,736,000 -9.80%
Medication mixes in dosage $18,325,549,000 1.60%
Platinum (unwrought) $11,640,510,000 69.80%
 Processed petroleum oils $7,390,870,000 -37.60%
Turbo-jets $20,269,801,000 -23.20%

$30,000,000,000
$25,000,000,000
$20,000,000,000
$15,000,000,000
$10,000,000,000
$5,000,000,000
$0
change
rs t) ts ge oil t) ts ils s) a)
Ca ugh o-je osa de ugh par m o eur ser Value US$ (2020)
o b d u o ft u u ti
n wr Tur s in Cr nwr cra ole s, liq g an
(u ixe (u Air petr irit din
old m um d sp clu
G on tin sse ing (in
ti a e s
ica Pl r oc clud on
ed P n ti
M (i ac
h ol d fr
co o
Al Blo

Fig.6 Overall exports of UK (2010-2020)

The above graph shows the overall exports of UK from last ten years. In 2019, the UK exported
a total of 446 billion dollars, making it the world's top 10 exporters. Exports from the United
Kingdom in the previous five years have shifted from 491 billion dollars in 2014 to 446 million
dollars in 2019 by 444,8 billion dollars. The most recent exportations include Cars ($39.4B),
Packaged Medicines ($19B) and Gas Turbines ($25.6B), Gold ($24B), Crude Petroleum
($22.6B). The United Kingdom exports mainly include the USA ($64.7B), Germany ($44.3B),
China ($29.8B), the Netherlands ($29.4B).

UK Car exports: The average UK automotive exports amounted to 65908.67 units between
1977 and 2021, hitting a constant high of 136305 units in November 2017 and a record low in
April 2020 of 152 units. This page contains the real numbers, historical figures, forecast, chart,
statistics, economic calendar, and news for United Kingdom Car Exports.

The EU is the largest export destination for United Kingdom passenger vehicles. Every second
automobile exported to the foreign EU Member States by UK manufacturers was sold in 2019.
Total UK exports to the EU amounted to over 170,5 billion British pounds in this same year,
making the EU its main trade partner, accounting for 45.8 percent of all UK exports. Due to the
differences between exports and imports, the United Kingdom's negative trade deficit with the
EU has increased in recent years. This was mainly because of a decrease in exports from 2011 to
2015[ CITATION Iqb18 \l 1033 ].

Fig.7 “Distribution of cars exported from the United Kingdom (UK) in 2019, by main export
destinations”.

In 2018, 18.6 billion UK pounds were donated to the UK engine industry. It was the second
consecutive year that industry revenues dropped, with a record year of 22 billion British pounds
in 2016. The fall in the economic contribution is a direct consequence of a reduction in
producing production output. Around 1.52 million passenger vehicles were produced in 2018.
This was 9% less than the prior year's amount and at par with the 2013 data.

Table 7: UK car exports from 2010-2020

Year Exports
2020 750000
2019 1100000
2018 1240000
2017 1290000
2016 1350000
2015 1740000
2014 1750000
2013 1760000
2012 1130000
2011 1125000
2010 998000

11
10
9
8
7
6 Exports
5 Year
4
3
2
1

0 500000 1000000 1500000 2000000

Fig.8 UK car exports from 2010-2020

This chart displays historical numbers for the last ten years in UK automobile exports to the EU.
This analysis is however focused on the data from 2010, i.e., the previous 10 years. The diagram
demonstrates that in the past decade, exports of the UK automobile sector declined. This
decrease was mostly due to a decrease in production. During the focal period, the condition
improved, i.e. since 2010. Over time, UK automobiles and other trading partners were enhanced
in manufacturing and exports into the European Union. The UK's vehicle exports peaked with
over 1.35 million automobiles in 2016. in 2016. In the next two years, however, the volumes of
exports fell marginally. The epidemic, Covid-19, came out and spread over the globe in 2020.
The situation was worse. As all economic operations were prohibited, the effects of the Covid-19
epidemic immobilized the economy and thus led to a significant reduction in car sector exports.
Britain is not just an exporter to the European Union of vehicles but also exports motors and
certain other equipment. UK car industry exports have fallen in the Covid 19 epidemic by 30
percent (Wang, 2019). This was mainly because local and foreign manufacture and sales of non-
essential products were stopped. Trade between nations has either fully stopped or fallen to low
levels as well. The demand for UK automobiles on the overseas market has declined
dramatically.
In the United Kingdom automobile sector, there were also several significant advancements. In
2013, Aston Martin and Daimler AG delivered the Mercedes-AMG engines with a 5% interest in
the Company. Mercedes-AMG is also provided with electric systems from Aston Martin. The
purpose was to help Aston Martin introduce innovative technology and motor car generation.
The first Mercedes-Benz technology DB11, debuted during the Geneva Car Show of 2016,
incorporates Mercedes-Benz Electronics, for entertainment, navigation, and other functions. In
2018, the 2018 V8 Vantage, which was released in late 2017, was utilized with twin turbo-
powered V8 engines and infotainment systems. Mercedes-Benz is progressively expanding its
holdings from 5% to 20%. In the year 2018, the firm also appeared on the Bourse of London.
The firm also reported some troubles in the following year in 2019. The recent political
upheavals in the UK in terms of leaving the EU (known as Brexit) have affected the UK's
automotive manufacturers substantially[ CITATION Bee18 \l 1033 ]. Following Brexit, the
automotive business Jaguar also has some issues. As the UK prepared for leaving the European
Union, the premium automobile maker said the changeover will have disruptive repercussions
for its business. The corporation established up an executive committee to keep track of
government decisions and developments in the negotiation process concerning a further 10% of
UK auto sales tariff to the EU.
The corporation also said that the additional customs duties would still comply and an
administrative question when the two companies reached a non-deal situation. As the firm also
faces issues in its supply chain, it is developing a strategy with its suppliers to guarantee that
extra costs, obstacles, and risks are handled before causing any significant damage. To assure its
continued competitiveness and keep its market share on the European market where it sells its
vehicles, the corporation was observed to adopt competitive tactics. To reduce the effect of
Brexit, Jaguar Land Rover is building robust and sustainable operating, administrative, financial,
and supply chain plans[ CITATION Gag211 \l 1033 ].
PEST analysis
The corporation had the right of being a member of the European Union and played an important
role in the import market in the EU, received from the UK. However, recent changes in the
political and economic dynamics are expected to generate export volume disturbances, but
within a short period. Various factors have molded and affected the patterns of UK exports to the
European Union in the worldwide economic environment.
Political Factor: The political and legal factors were the first among them. The above-listed
political reasons influenced the changes in the export scenario directly. It separated from the
European Union and brought about changes to the legislation were the political issues that
impact British exports to the EU. Brexit subjected the United Kingdom to new legal obstacles
and barriers in selling its goods to the other EU members. The United Kingdom will now have to
comply with the same legal compliance as those outside the European Union in the course of EU
trade. However, the governments of both institutions have negotiated numerous bilateral trade
conditions and agreements to decide the future of exports to Europe.
Economic Factor: In this connection, the economic aspects were also crucial. The economic
situation of both the UK and the EU is relatively steady and both of these organizations have had
a good economic connection with one another that is mutually advantageous. However, the
recent impact of Covid-19 has stopped the economy that has resulted in a decrease in UK exports
to the EU, particularly automobile exports.
Social Factor: The social facilities for UK exporters to the EU remain the favored luxury brand
for consumers, for example, Aston Martin and Jaguar Land Rover. This suggests that demand
was good and is projected to continue for the UK auto brands. In this respect, the technological
elements were equally crucial.
Technological Factor: Technological advances have enhanced the efficiency and effectiveness
of the UK automotive industry's manufacturing and operations. As a result, the export volume
has expanded to meet rising demand on the EU market for automobiles[ CITATION Ahm18 \l 1033 ].
2.2.2 Exports of China to Its Main Host Economy at the Firm and Industry-level
China was the world's second-largest GDP economy in 2019 (US$ current), the number 1 in total
exports, the 2 in total imports, the 71 per capita GDP economy (US$ present), and the 29 most
complicated economics under the economic complexity index. China has become the second-
largest economy in the world (ECI). China's major export markets are “broadcast equipment
($208B), computer equipment ($141B), integrated circuits ($108B), office machine parts
($82.7B), and phones ($54.8B), mostly exports to the United States ($429B) and Hong Kong
($268B)”[ CITATION Che19 \l 1033 ].

Table 8: Top Host economies of China export (2010-2020)

Country US ($B)
US 429
Hong kong 268
Japan 152
South Korea 108
China 96.9
Total 2.57T

US ($B)
500
450
400
350
300 US ($B)
250
200
150
100
50
0
US Hong kong Japan South korea China

Fig.9 Top Host economies of China export (2010-2020)

This demonstrates that China's largest export host economy is the United States. Most products
sold or exported by China to the United States are mobile telephones, mobile telephone
accessories, and other telephones. Chinese exports, particularly to the US, are often and
appropriately categorized as electronic items. Diverse patterns have been impacted by a wide
array of political, legal, social, environmental, and technical issues throughout the last ten years
of trade between the World's two strongest and largest economies.

With a second-quarter GDP of $1.33 trillion, China overtook Japan as the second-biggest
economy in the world in2010, a little more than Japan's $1.28 trillion. China was on schedule to
supplant the US as the world's largest economy by 2027, according to Goldenman Sachs'
economist Jim O'Neill. As demonstrated in 2010, by the country's economic development and
stability. For 2010 the entire GDP of China stood at 5.88 trillion dollars, compared to 5.47
trillion dollars of Japan in early 2011. This has also led to a considerable expansion in national
exports and the US, which has also boosted its mobile and associated accessories imports from
China together with other electronic products, as the largest economy in the world. The trade gap
between China and the US grew to $295.5 billion in 2011 from $273.1 billion in 2010 and
resulted in economic tensions between the two nations. It might be attributed to three-quarters of
the expansion of the US trade imbalance in 2011. In March, the USA, the European Union, and
Japan submitted to the World Trade Organisation, in which they cited the limitation of China's
exports of rare earth metals[ CITATION Nay181 \l 1033 ].

Table 9: China Exports of Computer and Valu (USD $ B)

Communication Technology 2010-2020XYear
2010 156
2011 176
2012 202
2013 199
2014 198
2015 172
2016 157
2017 205
2018 224
2019 208
 Valu (USD $ B)
250

200

150

100

50

0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Fig.10 China Exports of Computer and Communication Technology 2010-2020

China accounted for 28% of world exports of computers, electronics, and optical items in the
previous 10 years. This share has climbed by 13 percentage points since a decade ago, according
to McKinsey data analysis.

According to the United States and its allies, Chinese quotas breach international trade law by
pushing foreign firms which utilize metal to transfer to China. In trade fighting, China slammed
the move to safeguard its interests as "fast and reckless." These trade conflicts formed part of the
political and economic issues that drove China to stop shipments of commodities to the US. The
electronic machinery business, which was the largest exporter in the US, suffered like other
businesses and had to focus their goods elsewhere. In the next years, many delicate topics
affecting the two nations' ties have undergone severe political developments. However, after the
country's leadership changes, the situation has improved. For a while, the political tensions lasted
but later lessened. Once the political considerations were conducive to commerce, exports
resumed and trade improved at their regular level. This meant higher exports to the electronic
products industry and could continue trading with its largest importer, the US.

However, economic difficulties again came when Chinese exports were tariffed in 2018 by the
US Trump Administration. The US conflict in China then intensified in 2018 and continued to
rise as firms became engaged. In the course of this, China took active steps to decrease the usage
of Apple's iPhone and numerous Google services. It was prohibited for Huawei in different
American institutions. The people were also supporting this. Interestingly, the US has become
the largest imported electronic product in China, despite the current animosity between both
nations and the quest for economic dominance. The current situation has been difficult, but the
economic position shows they are a big part of the commerce with each other as long as the two
nations remain the world's top two economic powers.

In 2017, Dyson shifted to Singapore, changing its tax base from the UK to Singapore. The
decision is in line with the ambition of Sir James Dyson in developing new cybersecurity,
robotics engineering, and artificial intelligence chapter. More planned electric automobiles will
be built in the pipeline. An example of China's mobile investment in the US is the iPhone
assembly. Ultimately, in iPods, iPhones, and iPad, just two businesses combine components of
different firms globally. Foxconn and Pegatron, both located in Taiwan, are the corporations in
question. The present company is Hon Hai Precision Industry Co. Ltd., but, due to its trade
name, it is known as Foxconn. Foxconn is Apple's oldest device construction operational partner.
In nations across the world, including Thailand, Malaysia, the Czech Republic, South Korea,
Singapore, and the Philippines, Foxconn factory plants are situated. This is because only
Foxconn has expanded Apple's production to Foxconn and can match the company's high
expectations, i.e. Apple. Foxconn is, it may be argued, among the main investors in the US
electronic products market as its human capital and land are being invested in the fabrication of
US telephone systems[ CITATION Lia211 \l 1033 ].

PEST analysis
The trends between China and its major electronic products importer USA are affected by many
political, economic, social, and technical variables.

Political Factor: The political causes were connected to the tensions caused by the shared
problems between the two countries. Political tensions intensified and finally damaged
commerce between the two nations, which also resulted in declines in exports from China.

Economic Factor: The trade war between China and the US was supposedly a wave of political
tensions as regards the economic causes. Both nations try to exert their domination by employing
penalties and tariffs and so engage in economic strife. The fact that one country had in any way
infringed another's rights was recorded as this war. However, the backdrop might be inferred
from the battle since both countries wish to become the world economic leader.

Social Factor: This issue was also greatly influenced by sociological aspects. The masses
followed their country's narratives and were therefore supported in the trade war. But individuals
in China usually prefer to utilize their brands and products. The Americans are aware of the
Chinese technology and are willing to use items from reputed Chinese producers which sell high-
quality items to the U.S. Gadgets and other electronic items. In the Huawei/ iPhone conflict, the
social aspects played a major part as citizens from both nations stood behind their governments
and rejected their goods.

Technological factor: Finally, there were also crucial technological aspects. In both countries,
technical advancement is rather fast. It may be clearly said that on the technology front both
countries compete. The development of 5G technology is the main area of concern in this
respect. The Huawei versus iPhone and the China-U.S. trade war has been frequently reportedly
one of the key reasons for the 5 G. Both countries were the first to create and make revenues
from this technology[ CITATION Pet19 \l 1033 ].

2.4 Policy Recommendations

From the pervious section data, it can summarize that China's external direct foreign investment
expanded in recent years and, it appears, China was one of the world's major investors, indicating
its worldwide economic power. In 2000, the Chinese Government started a Global Goal program
aimed at transforming Chinese companies from outside China into competitive companies
worldwide. In line with this goal, China's OFDI grew steadily, particularly after 2008, when the
financial crisis boosted the number and the investment opportunities of China overseas[ CITATION
10B18 \l 1033 ]. A second important component in China's OFDI in the development of foreign
currency reserves. The Government is seeking to diversify its portfolio of investments and to
pursue profitability along with safe, low-yield assets. While China's OFDI is more resource-
based in emerging and developing markets, Chinese enterprises in developed countries tend to
focus more on global brands/distribution networks and learning about local technology and
managerial capabilities (so-called strategic asset-seekers)[ CITATION Che19 \l 1033 ].
In entry modes, investments have moved from investments in Greenfields to mergers and
acquisitions which currently amount to almost two-thirds of the value of all Chinese OFDIs. It
also seems that the FDI in China has a new tendency towards the developing world yet
investment in Greenfields remains important in the developed world. This change has been a
consequence of the financial crisis. Although the host nations prefer the second since this
provides jobs, it cannot deny the positive consequences of Chinese M&A either. Since several
merges and acquisitions were made to avert the bankruptcy of dysfunctional, unproductive
companies during or after the crisis, existing personnel were frequently rescued [ CITATION
Gag21 \l 1033 ].
Furthermore, appropriate and efficient UK government policies concerning OFDI can only be
developed based on reliable information on the nature and scope of and how the investment for
the design of OFDI policies fluctuates over time. However, the information the government
collects and publishes is quite restricted. Concerning investment screening, the government of
the United Kingdom should define how the balance between the promotion and facilitation of
inward investments on the one hand and protection of national security on the other should be
established. The UK Government's reply to the White Paper on National Security and Investment
should give this information[ CITATION Han191 \l 1033 ].

1. Conclusion

This extensive report studies OFDI or exports by China and the United Kingdom, two of the
most stable and powerful economies in the world. The major objective of the report is to
investigate the international business environment in the context of these two economies and the
economies hosting them, to which they are investing or exporting. The paper examines the
developments in both nations and analyses them for debate at the national level. This section
contains and analyses in full the essential OFDI statistics and exports to the host economies of
both nations. In the second portion, OFDI and the exports of the two nations in industry and
business Le have been addressed and studied. This section contains statistics from industry and
trends from exports to host economies from China and the United Kingdom. The section also
offers insights into the investments and operations in the host economies of individual
corporations from both nations. In these two sections, the patterns evaluated are based on data
from the last 10 years. The next portion of the study gives the government of both nations
suggestions. The suggestions concern policies to be adopted by nations to improve and control
their OFDIs or exports based on analyses in previous parts.