Dairy companies have a key part to play in plugging a £1bn hole in the UK economy by ramping up exports to China, the government has said as it embarks on a major trade delegation to China today.

Environment secretary Owen Paterson is leading a group of 40 food businesses on a fact-finding mission to the country, which he hopes will help him identify what support the government needs to provide to make exporting to China easier for British companies.

He will be meeting with local companies, trade associations and industry experts in Shanghai this week, and will also be visiting Tesco and Marks & Spencer stores in the city.

Paterson said China offered particularly attractive opportunities for UK dairy companies, as demand for safe, high-quality, added-value dairy products in the country was soaring. “I remember a few years ago there was real antipathy to dairy products in China, but that has completely changed. There is rapidly increasing demand for high-quality, reliable dairy foods, so it’s a screaming good opportunity for us.”

At present, the UK imports £1.2bn more dairy products than it exports, according to Defra figures.

Selling dairy to China is often associated with exporting commodity products, but Paterson said he believed British companies should focus on exporting added-value products. “In my own patch in North Shropshire I have seen examples over the past 15 years of what dairy companies can achieve by adding value to their products,” he said. “Adding value is clearly the route for dairy to go.”

Paterson added he would present his findings from this week’s trip at a summit in the new year. He also said he was hoping to install a new officer at the British embassy in China to look specifically after agri-food exports.

Among the dairy industry representatives accompanying Paterson on his trip are Welsh company Trioni, cheese supplier Somerdale International and DairyCo.

Separately from his efforts to push British dairy exports in mainland China, Paterson is also leading a delegation from the beef industry to Hong Kong. A reception, hosted by English beef and lamb levy body Eblex, will be held at the Hong Kong Jockey Club on Friday (16 November) to celebrate an agreement made earlier this year allowing greater meat trade between the UK and Hong Kong.

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