Bank of Canada Governor Mark Carney says even a slowing China offers vast opportunities to Canadian companies.
China’s economy is expected to grow about 7.5 per cent this year, or half of what it was in 2007.
But even at that rate, the country is injecting $600-billion (U.S.) into the global economy – twice what the United States contributes and roughly the same as it did five years ago, Mr. Carney said Monday in Ottawa at a conference on Asia.
“There’s a huge amount of growth that’s going to come here on virtually any trajectory,” Mr. Carney said at a panel discussion at the conference, organized by the Canadian Council of Chief Executives. “There is sustained opportunity. These are relentless forces.”
Mr. Carney warned that Canadian multinationals are typically half as engaged in Asia as their counterparts in other Group of Seven countries. And he urged Canadian companies to “reorient” their activities toward China.
It’s not too late, Mr. Carney suggested. The enormous needs of China’s rapidly growing middle class, its appreciating currency and the country’s ongoing transition to a more market-based financial services sector presents enormous opportunities for Canadian companies, he said.
“Getting a large share, or more than our share, of these opportunities is readily achievable,” he pointed out.
Food presents a major opening for Canadian exporters, according to Mr. Carney. That’s because GDP per capita in China and other Asian countries is at an “inflection point” where protein consumption is now poised to grow rapidly, he said.
“This is exactly the time to come in, given where the mass of the population is starting to move,” Mr. Carney said.
Mr. Carney sidestepped commenting on the $15.1-billion takeover of energy company Nexen Inc. by China’s CNOOC Ltd.
But he said it is critical that Ottawa get its trade strategy right in China. “Clearly, executing on that will be critical to enlarging the opportunity set,” he told the conference.
While China may not be importing much capital now, it eventually will as it liberalizes its financial system, he said.
“They’ve moved a great way from were they started, but they’ve got a long way to go,” he said. “And gradually they are going to import capital down the road.”
That will open new opportunities for Canadian companies in areas such as pensions, insurance and allocating credit to companies – areas where Canada has expertise inside and outside government.