Companies

Canada eyes China as new growth engine

By Ding Qingfen and Lan Lan (China Daily)
Updated: 2010-10-28 13:59

Currently, the majority of Canadian companies doing business in China are big companies, mainly in the insurance, natural resources, transportation and high-tech sectors, but "more small and medium-sized enterprises (will) come to China in the coming years, as Canada's strength and volatility lies in its SMEs", Cheng said.

"They will be more in tune with China's rapid rhythm," he added.

Canada Forestry Innovation Investment (FII), Canada's official forestry bureau representing the nation's forestry companies, including many SMEs, set up its first office in Shanghai in 2005 to promote wood exports, FII's first of its kind overseas.

During the past four years, the number of FII staff in China has rapidly grown to 50, and so have the exports.

"From 2005 to 2009, Canada's wood exports have doubled every year," said Mike Hogan, general manager of FII China.

That export growth has seen Canada become the largest exporter of wood to China with 1.1 billion board feet last year.

During the past few months, China's investment environment has been criticized by foreign businesses as turning worse. Premier Wen Jiabao has repeatedly stated the complaints are not universal and the argument is not true, and Minister of Commerce Chen Deming also said in the (London) Financial Times that China is, and will be, more open to the world, which will benefit foreign enterprises.

Cheng from CCBC did not agree with the argument, either. "China's overall investment environment continues to improve in most areas, thanks to the government's consistent efforts to reform and open up the Chinese market," he said.

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Yu from BMO also pointed out that there are regulatory restrictions in all nations and trading blocks, no matter whether it is the US, European Union or Latin America, and said this is understandable. "So far we have seen great achievements and tremendous support from government," he said.

The help is reasonable and the experience, favorable."

But improvements in few specific areas are also suggested. "Our concern is in the mining sector, where there are still restrictions," McMullen said.

China "owns a lot of resources and the problem is the nation lacks the technologies to tap it. Canadian companies are good at developing natural resources, but the challenge is they are not allowed to enter China", McMullen said.

Yu from BMO said Canadian companies operating in China, no matter what areas they are involved in, share one thing in common. "We are keen on long-term development" and do not deny "cooperation", he said.

Cheng agreed. "A lot of Canadian companies share the same philosophy that they don't go for quick money , but instead tend to look for long-term projects that are fundamentally important."

But "China is a quick-changing market, and Canadian companies need to participate in the growth more actively".

BMO has been developing business through cooperation with local partners, which has progressed well.

Yu said BMO China will not dump such a model in the short term as both are highly complementary to each other. "Local players have good access to distribution and customers, and we have strong management expertise. We will conduct business step by step."