John Baird Has It Right, China Is a Tremendous Opportunity

 By Michael Darch

In an editorial in the Ottawa Citizen, Canada’s Minister of Foreign Affairs John Baird outlined what the growth of China’s cities could mean for Canada. “China is witnessing the migration of hundreds of millions of its citizens from the countryside to rapidly rising cities. As its population becomes overwhelmingly urban-dwelling and middle-class, major new economic opportunities are being created.”

The 11 Economic Development Agencies that make up the Consider Canada City Alliance could not agree more. The facts laid out by Minister Baird speak for themselves.

Minister John Baird in China, October 2013

Minister John Baird in China, October 2013

“The Economist observes that the number of “megalopolises” of 10 million residents or more in China will grow from three in 2000 to 13 in 2020. The McKinsey Global Institute, meanwhile, predicts that Chinese cities of more than a million residents will increase from 160 to 221 within 12 years. By 2025, 70 per cent of China’s population, or some 900 million people, will live in cities. Only half that amount does so today.”

“China’s increasingly middle-class residents will deepen their desire, and ability, to own homes, diversify their diets, invest in financial services, pursue post-secondary education, travel abroad and connect to one another and the world. The proportion of Chinese households with a computer rose from six per cent in 1999 to 66 per cent in 2009. China already surpassed the United States as the largest Internet user in 2008. In 2012, fully 82 per cent of Chinese citizens had a cellphone."

“Last year, China became Canada’s second-largest export market after the U.S. More than 84,000 Chinese students are studying in Canada. The number of visitors from China grew 20 per cent in 2012 alone.”

Consider Canada understands the game changing implications of the growing importance of cities in the sustainability of national economies. The economic shift to cities is being seen in Canada. The member cities of Consider Canada represent approximately 54% of Canada’s population and 56% of its employment but between 2007 and 2012, they accounted for 72% of the GDP growth and 90% of the jobs growth in Canada.

Consider Canada also recognizes the importance of China to Canada. Bruce Graham, the Chair of Consider Canada, noted in an article in the Calgary Herald.  “The positive Chinese reaction to the Consider Canada City Alliance approach reflects the importance of focusing on city-to-city economic development. Just as Canadian companies strive to establish rubber-meets-the-road relationships in the world’s top trading cities, Chinese companies want to do business with city-based navigators."

Canada-China trade and investment benefits both countries. The growth of our SME sector is constantly hampered by the lack of capital and our small domestic mar ket. Yet, we are known for our innovation and entrepreneurism. As China moves increasingly towards a global market economy, our innovation, entrepreneurism and global outlook make us excellent partners. The investment capital that has been built in China and the growing market directly address the factors limiting our growth. A true win-win opportunity.

Minister Baird rightly observed the growing presence of his department in China. “To help Canadians capitalize on these opportunities and navigate China’s diversity, our government has expanded Canada’s network of China offices. Long established in Beijing, Shanghai, Guangzhou and Chongqing, our government opened trade offices in Chengdu, Shenzhen, Nanjing, Qingdao, Shenyang and Wuhan in 2009. These six megacities today  have a combined population of some 65 million, more than the entire population of either France or the United Kingdom.”

The members of Consider Canada have been moving to take advantage of this on the ground opportunity. In May of 2012 and April of 2013. Consider Canada worked with the Invest in Canada Program in the Department of Foreign Affairs and Trade to hold investment seminars in Beijing, Chongqing, Guangzhou, Hong Kong and Shenzhen. Between these two trips, 815 contacts were made with Chinese companies, 217 prospects identified and 208 leads qualified for follow up by our members.

CCPIT delegation in Calgary, July 2013

CCPIT delegation in Calgary, July 2013

The activity is leading to an increasing number of Chinese investors visiting Canada. In July, Consider Canada and Calgary Economic Development partnered with Invest in Canada, the China Council for the Promotion of international Trade (CCPIT) and the China Canada Chamber Of Commerce (CCCC) to host the Canada-China City Economic Cooperation Forum. Eighteen delegates from China, 48 delegates from Chinese companies and organizations with existing investment in Canada and 84 delegates from Canada gathered to explore future opportunities for investment here.

At the Forum Wang Lijun, President of the CCCC and CEO of the Bank of China (Canada) commented “China is becoming Canada’s most important source of foreign direct investment. As of the end of 2012, there are 183 Chinese companies that have invested in Canada a total amount of $43.8 billion US dollars, and these investments create thousands of job opportunities for Canadians."

Bruce Graham echoed this importance in his article in the Calgary Herald. Here in Calgary we well know the impact of FDI from the East. In the last three years alone, $31 billion of China investment and $53 billion of Asia Pacific investment flowed though Calgary investment banks and companies – a massive and welcome injection into the overall Canadian economy.”

Minister Baird observed, “This week there will be delegations in China from the economic development agencies for both Ottawa and Calgary. Such visits reflect the importance placed on trade, investment and people-to-people contact by many of our cities.”

The two visits that will coincide with the visit by Minister Baird are only a small part of the activity being fostered by the cooperation between Invest in Canada and Consider Canada. In September, delegations from our members in Vancouver, Edmonton and Calgary visited China, in October, in addition to the Ottawa and Calgary visits, Waterloo and Toronto will visit and in November, Vancouver will again visit.

 

And our government recognizes the importance. Governor General David Johnson and Ministers Ed Fast and Joe Oliver will also all visit China in October. 

The closing comment by John Baird was “What do China’s rising cities mean for Canada? A wealth of challenge and opportunity.”

At the Consider Canada City Alliance, we are committed to Maintain the Momentum and convert that opportunity to economic prosperity.

Michael Darch is the founding President of the Consider Canada City Alliance .