In a special report released today, the voice of Canadian business is calling for stronger economic ties with China.
The Canadian Chamber of Commerce’s report, Canada-China: Building a strong economic partnership, asks whether we, in politics, business and society at large, have maximized the Canada-China economic partnership. China is due to become the world’s second largest economy this year, with markets representing 1.3 billion increasingly sophisticated consumers and deep pools of capital.
Our extensive research and discussions with our members and Canadian thought leaders convince us that now is the time for both governments and the business community to reinforce efforts to realize the economic potential of Canada-China ties.
Click here to download the report.
Global patterns of economic growth, consumption, trade and investment are changing. A shift in relative economic clout away from North America and Europe toward Asia, and from the developed to the developing world, is taking place. Large developing economies, with China in the lead, have become an increasingly powerful secondary engine of global economic growth.
For trade-dependent Canada, learning how to navigate shifting global currents to ensure its increasing prosperity calls for a focused policy re-think, one that looks well into the future. While developing stronger ties with the United States must remain the first pillar of Canada’s international trade and investment policy, Canada’s economic well-being will also need to rely on enhanced economic exchanges with other key markets such as China, India and the European Union.
China’s economy is expanding rapidly and is expected to become the world’s second-largest economy later this year. China today has an enormous population of increasingly wealthy and sophisticated consumers and is a key global exporter and importer of high-quality resources, manufactured goods and services. China is also an active overseas investor with vast pools of capital and a huge, diverse constellation of markets that Canada cannot afford to overlook.
Canada must broaden and deepen its economic ties with China over the coming years. Achieving this will require that the federal government, together with the provinces and territories, provide an overall strategic direction to move Canada’s economic ties with China forward. Work must be done by both countries to remove the obstacles that stand in the way of enhanced, mutually beneficial two-way trade and investment. Yet, it is ultimately businesses that do business. More than ever, it is essential that Canadian companies of all sizes and across all sectors grow to become globally competitive players in China.
• A Canada–China economic partnership must begin with a solid political relationship at every level. Ongoing, two-way exchanges between Canadian political leaders and their Chinese counterparts are key to forming that relationship. The federal government must form a Canada–China Strategic Dialogue.
• The federal government must establish an overarching, visible Canadian brand under which all sectors of the economy can consistently market themselves to China.
• The federal government must assist Canadian businesses in breaking into the Chinese market by providing them with introductions to officials in Chinese provinces and cities where business links can be built. In China, introductions by government leaders pave the way to business ties.
• So that Canada can become China’s gateway to North America, Canada’s infrastructure, including seaports, railways, roadways, customs facilities and airports, and the operation of that infrastructure, must act as facilitators and catalysts of growth, both in trade and in the number of jobs associated with trade.
• Canada must improve its record of skills and innovation. Canada’s education system must equip students with world-class communications, mathematics and science skills so that its workforce is able to work in a global business environment and can continue to create the sophisticated products China and other large markets demand.
• Canada needs to focus on its strengths in its mining and energy sectors, its agricultural sector, its high-value-added manufacturing and technological industries and its commercial services areas. Canada must deepen and broaden its goods-and-services trade with China. Not only must Canada increase the volumes of exchange, but it must also broaden it across all sectors to include more high-value-added products and processes. Canada must do this not only in sectors where it currently has niches of expertise, but also in budding sectors such as green technology. There is room to build strong partnerships with China in many of these areas.
• Canada must ensure that it continues to welcome foreign direct investment, including from China. Canada and China must conclude the Foreign Investment Protection Agreement (FIPA), under negotiation since 2004, to provide a solid long-term framework for two-way investment, with comprehensive, high standards of protection for investors and recipients in both countries.
• As trade-dependent countries, both Canada and China must collaborate through international institutions and fora and work with other international partners to stop protectionism and promote rules-based trade liberalization. Canada should also take the first step in exploring the viability of a comprehensive free-trade agreement with China.
• With China’s granting of Approved Destination Status (ADS) to Canada in December 2009, the federal government must move to market Canada as a travel destination to China’s growing population of overseas tourists.
What this means for Canadian business
For a country such as Canada, whose prosperity is closely tied to global trade, gaining access to new markets for its goods and services and to new sources of capital is not an option, it is a necessity. As China is the world’s fastest-growing and soon-to-be second-largest economy, pursuing the new opportunities tied to a rising China is in the best interest of, not only Canadian businesses but, all Canadians.