2014-15 Canada-China Business Forum Magazine | Page 16
TRADE
China: A Land
of Opportunities
& Priority
Those of you familiar with Canada’s Global
Markets Action Plan (GMAP) know that its
purpose is to advance the interests of Canadian
businesses in a specific group of key foreign
markets. Number one on that list? China.
And for good reason. China has the best potential
for broad Canadian interests, especially in
areas where Canadian expertise has the most
potential for success. But not everyone is entirely
confident that China will continue the growth
we have come to expect. Those detractors
might cite the recent regional slowdown as a
fixture, a Chinese new normal, if you will.
Peter Hall disagrees. As chief economist
for EDC, Hall has taken a countervailing
view of growth prospects for China. While
some economists are predicting a decline in
growth next year, Hall expects to see China’s
economy grow by as much as 8 per cent.
“There are a lot of concerns out there right
now, but the country is clearly in the middle
of transition,” says Hall. “Certainly demand
has gone down, but this is temporary.”
“Gone are the
days before the
recession hit...”
- Peter Hall
by/par TERRI-SUE BUCHANAN
W
ith the Government of Canada’s Global
Markets Action Plan putting a renewed focus
on markets like China, Export Development Canada
(EDC) is bullish on the prospects, particularly for
smaller companies. Now is the time to act.
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“Gone are the days before the recession hit, when
anything less than 9 per cent real GDP growth
was a slow year,” he adds. “Post-crisis, 2010 was
the only double-digit year, and that was fed by an
extraordinary outpouring of global and China-sized
stimulus. Then there’s slower-than-expected growth
in the rest of the world. With this, most are settling
in to a new vision of China’s expected near and
long-term growth path.”
CANADA CHINA
FORUM
BUSINESS
2014-2015 ccbc.com
China might still be dependent on OECD
nations to lead the charge, but with global trade
ramping up right when China is dialing down its
public investment, that’s enough to create growth
next year, says Hall. “Make no mistake, when
trade comes back, so will China’s growth.”
GROWING MIDDLE CLASS SPELLS
POTENTIAL FOR CANADIAN BUSINESS
What kept China going for the past few years?
Spending, according to Hall. Driven by the country’s
growing middle class, China is adding about 40
million people – more than entire population
of Canada – to its middle class every year.
The growing middle class means changing consumer
markets. Consumers demand higher-quality goods
such as cars and food. This in turn is creating entirely
new consumer markets and global supply chains.
And while much of China is shifting production to goods
demanded by these regional consumers, currently, China
can’t satisfy its own demands. It is becoming a fastgrowing importer of these higher-quality goods, creating
many opportunities for Canadian businesses, says Hall.
Take meat products, for instance. With close to 1.4
billion people, China now consumes twice as much meat
as the U.S. More meat consumption means more grains
to feed livestock, which in turn means higher demand
for potash, phosphate and nitrogenous fertilizers, as well
as agricultural equipment. Healthcare, life sciences,
forestry products, financial services and other associated
industries are in demand by the growing middle class.
Not to mention the various infrastructure
needs and related clean technologies to sustain
China’s rapid urbanization. In fact, as GMAP
notes, China has a particularly keen interest
in clean technology, highlighting in its most
recent Five-Year Plan its role in addressing the
country’s growing environmental challenges.
“For many of these needs, Canada is on their radar,”
says Denis L’Heureux, EDC’s Regional Manager
for Asia, based in Shanghai. With offices in Beijing
and Shanghai, EDC places a big priority on growing
Canada’s footprint in China specifically, and in Asia.
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