By Michael Darch
The Consider Canada City Alliance (CCCA) ended its six days in China with a series of one-on-one meetings with Beijing investors. Again, all members had a full slate of meetings and the discussions were intense. A highlight was the signing of an agreement between CleverU and China Mining Investment Group.
As had occurred throughout this mission, our members continued to learn. Two further points became evident. First, Chinese investment abroad is as much about the Chinese market as the global market. Second, there is a limit to the growth of the Chinese internal economy and high growth Chinese companies are going to have to develop global brands.
On the mission, it became evident that Chinese companies were first looking to their competitiveness at home. The continuing high internal growth creates two positive conditions. As the economy expands and creates more wealth, there are more consumers and those consumers have more disposable income. Also, demand rises for more and higher quality goods. The net result is more demand for goods in general and for more value added goods.
An earlier blog post discusses our concept of coupling Canadian innovation and entrepreneurship with the growing Chinese market and investment capital. Our focus was the value in the North American market. This mission demonstrated that investment in Canadian high growth companies can provide that competitive edge in the domestic market to maintain and grow market share.
The second lesson learned was that Chinese high growth companies were realizing that dependence on sustained large increases in the domestic economy was a risky assumption. Foreign investment is a necessary corporate strategy for long term sustainability and to ensure competitiveness in global markets.
A component of the value proposition that we developed for investing in Canada is access to the North American market through the North American Free Trade Agreement (NAFTA). With Canada and the United States having the largest bilateral trading relationship in the world, Chinese companies can establish their North American presence through entry to a smaller and more business friendly environment.
It was a hectic six days. Jet lag and an intense schedule definitely began to have an effect on the team. The weekend was welcome. Many returned home. Several rested to begin private programs for the next week. All celebrated a successful week. New leads were created, new relationships established, and we all understood far more about how to leverage success with China.
It is often said that if the US economy gets a cold, Canada catches pneumonia. Statistics Canada reports bear out this historic dependence. Our members have to diversify their FDI efforts. As Nathan Rudyk from market2world communications Inc. noted in a recent blog post, China is part of the CCCA strategy.
(Michael Darch is the founding President of Consider Canada City Alliance Inc.)