Opportunities
Exposed: Canada and the new China
Remarks delivered by
The Hon.
David Kilgour, P.C., M.P.
Secretary
of State, Asia-Pacific, and Member of Parliament
for Edmonton-Southeast
Opening Gala,
Canada-China Business Expo
Toronto,
Ontario, April 17,
2002
*Check Against
Delivery
Ladies and
gentlemen,
On behalf
of Prime Minister Chretien, thank you Daisy
and Albert Wai and the Greater Toronto Business
Association very much for this event. My
colleague, Trade Minister Pierre Pettigrew,
would have liked to have been here, but
left to lead a trade mission earlier today.
He would like me to welcome everyone to
a very productive few days.
As early
as 1960, Canada made its first grain sale
to China, an act that helped end China’s
isolation. A decade later, we were one of
the first Western countries to establish
diplomatic relations.
The importance
of the relationship has been advanced by
a series of high level visits. Prime Minister
Chretien led the first Team Canada trade
mission to China in 1994. President Jiang
and Premier Zhu both visited Canada. Last
year’s Team Canada visit included more
than 600 Canadian company representatives
- by far the largest delegation ever assembled
for a Canadian trade mission. Over $5.7
billion in new business deals were signed.
Canadian
foreign policy is one of multiple linkages,
built on economic partnerships, peace and
security, sustainable development, human
rights, good governance, and the rule of
law.
China’s
accession to the WTO
Our business relationships are now changing.
As everyone here is aware, China is now
a member of the World Trade Organization (WTO). This move represents a major step
forward in China’s effort to further
integrate itself into the global community.
As the world's sixth-largest economy, and
with a market of over 1.3 billion people,
China’s addition to the rules-based
global marketplace will foster much progress
in economic development.
With one
of the world’s fastest growing economies,
poised to double in the next decade, China
has a huge appetite for foreign capital,
technology and know-how. Key to its program
of economic and industrial policy reform
has been the re-engineering of its traditional
state- owned enterprise system. Reforms
in foreign exchange controls, taxation,
foreign trade and state enterprise restructuring
must continue - and must be supported.
Difficulties
will accompany the opening of China’s
markets. As a WTO member, China must now
ensure that it lives up to its commitments
to liberalize its economic structure, to
better integrate itself into the world economy
and offer a more predictable environment
for trade and foreign investment. Without
a doubt, this creates significant new business
opportunities for Canadian exporters while
strengthening Canada’s substantial
investment interests.
Accession
to the WTO will push China to further participate
in the world economy - a move which will
lead to significant Chinese investment abroad
over the next decade. As official policy,
Chinese enterprises have been encouraged
to invest strategically in foreign markets
not only as a means of securing supplies
of raw materials but also to serve as a
conduit for technology acquisitions and
transfers.
Investment
and Trade
Investment and trade are two of the bulwarks
of Sino-Canadian relations. Last year, China
was Canada’s fourth largest trading
partner, third if one includes Hong Kong.
Total bilateral trade for 2001 was $17.0
billion, an increase of 13.3% over 2000.
Over the same period, our exports to China
increased by 14.6% and imports increased
12.7%. There are now evidently over 4,500
Canadian-invested projects in China. Drew
Fagan asserts in today’s Globe and
Mail that China today attracts about 3/4s
of all the direct foreign investment in
Asia – a record US$47 billion last
year. Over 400 Canadian companies have established
offices there!
Our Department
of Foreign Affairs and International Trade
has published “The China and Hong Kong
Trade Action Plan,” a detailed guide
to doing business in China, and available
on our government website. The Trade Action
Plan, like Canadian business practices,
is multifaceted. It focuses on sectors that
you, the Canadian business community, have
shown great strength in: agriculture, transportation,
telecommunications, financial services and
more.
The investment
portfolio is not all one-sided. In recent
years, Chinese enterprises have been looking
for new investment projects in Canada in
areas such as oil/gas and mineral deposits,
and commercial properties. Numerous Chinese
companies have established offices in Canada.
One example is the recent investment by
China World Best of $45 million dollars
in a textile manufacturing plant, which
employs more than 300 people in Drummondville,
Quebec.
We are all
aware that China’s Eastern regions,
powered by the incredible growth of Shanghai,
provide ample investment opportunities.
In recent years, however, the Chinese government
has decided to emphasize the development
of Western China.
The Development
of Western China
The core elements of China’s strategy
include a pledge to direct at least 60%
of the China Development Bank's lending
to the interior regions; also to encourage
investment there by foreign governments
and international financial institutions.
Many of the major priority capital projects
involve roads, railways, airports, energy
infrastructure such as pipelines, water
conservancy and environmental protection
– in other words, areas of great Canadian
strength! Canadian businesses have experience
and technology to share: in infrastructure,
agriculture, and social policy development
that is rooted in our own efforts to address
a widely dispersed population, resource-oriented
economy, and challenging geography.
There is
an important role for Canadian business
associations to play in strengthening and
creating Sino-Canadian links – ones
which provide increased access to Chinese
markets for Canadian exporters.
Culture
and Education
Yet Canada
represents much more for China and its peoples
than simply exporting products and commercial
services. Culture plays a major role in
developing the ties that bind us. As our
Prime Minister has said, “Canadians
are able to talk to the world because we
have the world within our borders.”
Canadians of origin in China have made significant
and lasting contributions to our cultural
mosaic. China is Canada’s greatest
source of immigrants. The number of people
of Chinese ancestry living in Canada –
over 1 million people according to the latest
census – is, on a per capita basis,
larger than that in the United States. Canada
owes much gratitude to Chinese-Canadians.
One area
where this cultural influence is especially
pronounced is in education. Canada is proud
of its learning institutions and we believe
that we have one of the best education systems
in the world. We spend more per capita on
our educational system than any other country
in the G-8 and are among the top three countries
in the Organization for Economic Cooperation
and Development.
China’s
students are now attending our post-secondary
institutions by the thousands. It is our
largest source of foreign students in the
region, attracting over 10,000 last year.
Recently,
many Canadian educational institutions have
recognized the value of complementing their
student recruitment activities in China
with the delivery of joint programs and
joint venture schools. Increasingly, Canadian
universities and colleges are delivering
Canadian curriculum in China using Canadian
or Canadian-trained teachers. Chinese students
in China now have access to high quality
Canadian education.
Our deep
friendship with China has also allowed us
to raise an issue important to all Canadians:
human rights. We have consistently registered
our concerns about China’s human rights
record at the UN; we’ve targeted CIDA
programs to promote the enhancement of civil
society; and we’ve continually called
upon the Chinese government to end the suppression
of freedom of expression and respect the
two human rights covenants it ratified at
the UN.
There is
always more that can be done. We believe
that China’s entry into the WTO will
help advance the issue. In acceding to the
WTO, China has accepted the principles and
disciplines embodied in WTO agreements:
transparency, due process, independence
and impartiality of the judiciary. Although
these obligations will apply only to trade-related
laws and measures, they will represent a
significant strengthening of the rule of
law - and hopefully provide an impetus for
greater change.
Conclusion
The challenge is how to build on our strong
relationship. China is on a growth path
powered by government policy decisions favourable
to expansion, foreign investment flows,
WTO promise, and a rising middle income
community. Any organization with an international
vocation, a government department, a group
of performing artists, or the business community,
should consider whether China’s growth
can be of benefit to them. If the answer
is yes, the potential is great. Now is the
time, more than ever before, to consider
a China strategy.
Let me end
by thanking the organizers of the Chinese
Business Expo. Your organizations are furthering
Canada’s bilateral relationships with
China. It is people like you, with extensive
experience and personal contacts, that constitute
one of the most important catalysts for
Canada’s Asia-Pacific trade. Not only
do you promote Canadian exports and create
jobs in Canada, but you also achieve similar
objectives for our partners. Our relations
in trade and investment provide a strong
bridge for people-to-people linkages that
help spread sustained universal values and
promote a better quality of life for all.
Best of luck
in these next few days. Thank you.
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