Although the Canadian government plays a crucial role in making this happen, the onus is on business, educators and civil society to be more strategic and aggressive about making China a priority.
By Peter Harder |
What Canada needs to do to truly succeed in China
At first glance, Canada's economic relationship with China appears to be in good shape. At $73.2-billion, trade has grown by 4.5 per cent from the previous year, and inbound investment from China was $16.7-billion in 2013. However, to ensure Canada remains a prosperous country, we must drastically step up our economic engagement. Good growth is simply not good enough. We need to stop acting so Canadian and start being Canadian Plus.
And that means we must be more nimble, more committed and single-minded in our focus on building stronger and more beneficial economic relationships.
Australia and the U.S. aren't waiting for us. Neither is China.
Australia is a prime example. It has had a focused Asia strategy for a generation, creating continuity that transcends governments. Asian language education is in its school curriculum. That country's transparent FDI regime makes it the top destination for Chinese investment from 2005 to 2013 (Canada ranked third, behind the U.S.).
So is the United States. A member tells me how his U.S. clients treat China like an MBA case study – they gather the data, analyze it, make a decision and go. His Canadian clients sit on the results and wait. But China won't wait for us. It has aggressive goals in its Five-Year Plan, in areas that Canada has an advantage. Companies will succeed by helping China meet its goals. This can be done very profitably. More than 90 per cent of U.S. companies in China are making money. Chinese investments in the U.S. nearly doubled from 2012 to 2013, with private enterprise comprising more than 80 per cent of transactions and 70 per cent of value.
I would argue that we can be more Australian and American, while maintaining the unique business environment that makes Canada attractive to the Chinese. Chinese officials plead with us to do more. China has asked Canada to enter free trade talks following the Canada-China Economic Complementarities Study. China has ratified the Foreign Investment Protection and Promotion Agreement (FIPA) that Canada signed in 2012 and is still waiting for Canada to ratify it. In the meantime, Canadian companies and investments go unprotected. But the experience of early-moving Canadian companies, many of which are members of my Council, agrees with their foreign competitors. The opportunity is there, the profit is there, and by competing successfully in and with a market like China, our companies become more productive and competitive.
This is crucial if we are to stay a strong nation.
Although the Canadian government plays a crucial role in making this happen, the onus is on business, educators and civil society to be more strategic and aggressive about making China a priority. We need to celebrate Canadian successes in China, celebrate good corporate citizenship and create a more welcoming investment environment in both countries. We must accelerate high-level visits of government ministers and co-ordinate business delegations with these visits.
But most importantly, we have to make decisions and act. The rest of the world is acting. China won't wait for Canada.
Peter Harder is a senior policy advisor to Dentons Canada LLP. Peter possesses a wealth of expertise
in public policy as a result of over 30 years of decision-making at the centre of Canadian government.