"China is a long-term play for us," says Bob Cook, who heads up the Asian business of Manulife Financial, which has made tremendous inroads in China's insurance and wealth management industries. "The contribution to the bottom line is not going to be huge in the next few years, but I think our shareholders know that. I think they know that what we're trying to do here is lay a foundation."
Manulife broke into China in the mid-'90s, and worked to hard to promote the still-relatively-foreign concept of life insurance. Manulife-Sinochem Life Insurance Co. Ltd. is the first Chinese-foreign joint venture life insurance company established in China. Former Chinese premier Li Peng and former Canadian prime minister Jean Chrétien attended an opening ceremony for the company in 1996.
Manulife executives quickly learned that while labour might be abundant in China, professionals who could work in the life insurance business were not.
When Mr. Cook came to Asia, he says "I told my colleagues back in North America, 'You guys are engaged in a mild skirmish for talent, the real war is going on out here in Asia.'"
What Manulife realized it had in its back pocket were employees with a Chinese cultural background who happened to be living in eight different countries. It was also able to move some sales people from its operation in Taiwan to China, taking advantage of their language skills.
"Long term, in order to feed the ongoing growth of the business, you have to be able to develop local talent," Mr. Cook says. It's a sentiment shared by Bombardier, which invests a significant amount of money and resources into training Chinese staff.
Manulife-Sinochem is now in more than 40 cities, but it's been tough slogging. "In places like India or elsewhere in Asia, you can get a national licence and expand at the pace you want," Mr. Cook says. "One of the business challenges we've had in China is that you have to secure licences on a province-by-province and then city-by-city basis. That means you don't just establish and work with one regulator in Beijing, you're working with regulators throughout the entire country."
Canadian executives say that Ottawa's relationship with Beijing is crucial. "We love it when there's things like the Minister of Finance comes over to visit, because that often is just the last little push we need to get the approval in order to expand our business," Mr. Cook says.
In March of this year, Manulife bought a 49 per cent stake in what is now called Manulife TEDA Fund Management Co., an asset management firm. For Mr. Cook, that deal is the most exciting thing that Manulife has accomplished in China thus far.
"The reason we won is because of the investment we've been making over the last 15 years in partner-relations and in government-relations," he says. "We paid a full and fair price, but price alone was not why we won the deal. It was the investment we had made in relationships in China that we were able to leverage in order to get this deal."
Marc Sterling, who was hired by Manulife 17 years ago to get the company into China and who is now the chairman of Manulife-Sinochem Life Insurance Co., says the realization that Manulife had made it in China dawned on him about three years ago.
That's when Chinese officials allowed Mr. Sterling to take a four-hour drive with a police escort - and sirens wailing - to the Wolong Panda Reserve, where he and his family were allowed to play with six giant pandas.