THE first minister has called on Scots companies to work harder at developing links with China to exploit the potential of the world's biggest market.

As he prepares to launch China Now In Scotland (CNIS) - an Edinburgh-based festival promoting cultural and economic links - later this month, Alex Salmond said increased trade links with Beijing could be crucial to Scotland's future.

"The Scottish government's overarching priority is to increase sustainable economic growth. Building trade links internationally is critical to our future economic success and China is clearly a key market for Scotland," said Salmond.

"Scotland and China already have strong links across the business, tourism and cultural sectors. Around 50 Scottish companies have established a presence in mainland China and many more have successful partnerships with Chinese businesses. In 2006, Scotch whisky exports to China alone were worth £58 million," he said, adding that China Now In Scotland would build on the business and cultural links between the two countries.

The economy of the People's Republic is growing at an unprecedented rate, with huge untapped potential for Scots, particularly in areas like education and financial services. In 30 years its share of the world's total GDP has grown from 0.5% to 5.5%.

CNIS is a joint initiative with Edinburgh University's Confucius Institute, which was initially conceived by Scotland's business community and has top-level support both here and in China, where premier Wen Jiabao has given his support. It also follows the start of the Chinese new year, heralding the Year of the Rat, which began last Thursday.

The Scottish government's strategy is focused on establishing political relationships at the highest levels, sharing experience and know-how and developing joint opportunities in areas such as education, commerce, science and culture.

Sir Robert Smith, chairman of Glasgow engineering group Weir, is patron of CNIS, having developed extensive experience and contacts in the People's Republic through Weir, which was among the first Scottish companies to realise the market's potential.

He echoed the first minister's comments and said that while many major international companies have already begun to build on links with China, the key for Scotland could be for small to medium-sized enterprises (SMEs) and educational institutions to get involved.

He said: "Throughout this year we will be running workshops about how to enter and operate in the Chinese market. Organisations like Royal Bank of Scotland and Standard Life don't need help, but SMEs do, and that is part of what all this will be about."

Smith, who was last week appointed chair of the 2014 Commonwealth Games committee, pointed out that while some companies already use China's manufacturing capability, they have not yet realised the export potential.

"Areas such as education and financial services are very important," he said. "As chancellor of the University of Paisley now the University of the West of Scotland, we have between 300 and 400 Chinese students every year taking courses in science and engineering.

"The biggest number of them are then taking their qualifications home because of the huge demand coming from the construction that is going on."

The China Now In Scotland festival will be officially launched by the first minister on February 21 and will include more than 100 events across Scotland during 2008