With China facing increased trade barriers with the United States, the country’s various sectors are striving to draw more investors and importers from other parts of the world – including B.C. and the Lower Mainland – into the Chinese market for direct, face-to-face interactions.
China’s newfound efforts to bring foreign businesses into China are highlighted by the country’s first International Import Expo, slated for November 5-10 in Shanghai. Earlier in April, acting Chinese consul general in Vancouver Kong Weiwei held an event to drum up B.C. interest in the expo, stressing the rarity of a country acting to encourage imports – not exports – in a foreign market.
“This is not a typical expo,” Kong said, adding organizers are now gauging interest among B.C. businesses in going to Shanghai to promote their wares in China’s US$11.2 trillion domestic market. “This is an important, milestone event that signifies China’s active willingness to open the door to its domestic market, and from now on, this is going to happen on an annual basis.”
That announcement, however, isn’t an isolated case. It is the latest in a number of outreach efforts from China-centric expos or trade shows that have landed in Vancouver to promote direct, on-the-ground contact with the Chinese market this year, including Hong Kong’s Belt and Road International Food Expo (BRIFE), to be held June 27-19, and sustainable tech showcase CleanConnect 2018 in Nanjing, set for November 15-16. While differing in scale, all three expos shared one message: it is now more critical than ever for Canadian businesses to court China in person if doing trans
pacific business is a priority.
“I’ve worked with both General Electric [NYSE:GE] and the Chinese provincial government in Jiangsu in the past decade, and what we’ve really lacked up to this point is an effective, efficient marrying of overseas waste management technology and Chinese domestic application,” said Xu Rong, CEO of Shanghai-based Umore Consulting, which organized the China pavilion at Globe 2018 in Vancouver earlier this year. “The challenge in China is vast and unique; just the industrial waste water and sludge are some of the most complicated in the world, and you have to be here to see whether what you offer can apply.”
Umore is the organizer of CleanConnect, which is taking a different approach in bringing Canadian businesses to China, Xu said. He noted that in the past, Chinese business officials were more likely to go abroad en masse to seek opportunities with partners like Canada, resulting in a low ratio of contacted companies accepting the invitations to make return visits – and an even lower number sealing the deal to co-operate in business.
In contrast, Umore is the only firm at the China pavilion at Globe, with only a few officials at the booth, engaging in casual discussions. The goal, Xu said, is to start the conversation, find the Canadian companies that fit certain niches in the Chinese market, then invite those with established prospects to Nanjing for CleanConnect.
“By the time you are there in China, you should have a list of at least 10 companies with whom you have a reasonable chance of starting doing business within a year,” Xu said. “This is a journey, not a meeting. As a Canadian firm, you have to find out if your business works in China, and in what way does it work. The expo is just a platform for that discussion, and we know China’s market more, so we know where you can fit in. It’s a matchmaking process.”
As for Hong Kong’s BRIFE, it chose Richmond-based North America Investment Association (NAIA) to select an official Canadian delegation to the expo this summer. For the NAIA, which worked to lead B.C. delegations to Chinese food shows for multiple years before becoming BRIFE’s authorized delegation organizer, the increased interest in having Canadian and B.C. businesses go to Hong Kong and China is logical, given that on-the-ground presence at such events is no longer just about doing business in China.
NAIA president Amy Huang noted the importance of BRIFE’s focus on China’s One Belt, One Road regional economic development initiative, which aims to connect China with Europe through land and sea routes.
“Canada urgently needs to explore potential alternative markets,” said Huang. “And covering more than 60 countries in Asia, Europe and Africa, [One Belt One Road] brings new opportunities to promote the development of countries along the Belt and the Road. That’s a region with a population of 4.3 billion people with an annual economic growth rate of 6.28% .… It will be Canada’s most promising emerging export market.”
While some may view China’s renewed interest in drawing foreign businesses into China as a sign of the increasing inertia of global trade momentum toward the Middle Kingdom, Kong said Beijing looks at it more as a natural extension of Chinese leader Xi Jinping’s commitment to open up the country’s economy to overseas partners in select sectors.
“What people should note is that the opening of the Chinese market is an opening that’s self-directed,” Kong said. “We are not going to open up under the pressure of other countries waving a big stick. The path of development will go at China’s own pace, according to its own needs… but we are not seeking trade surpluses as a goal, but rather a balanced trade relationship with others through more imports.”
Umore’s Xu added that the new emphasis on bringing overseas businesses to China to spur co-operation is likely to get off to a slow start, at least when it comes to clean technology, given many Canadian firms’ conservative nature and lack of familiarity with China.
“We are essentially looking for some trailblazers in Canada who are willing to actively come to China to pursue business,” Xu said.
“We as Chinese people can say all the good things we want, but ultimately, it takes successful Canadian cases to move the meter, and that’s what we want. Do we see a huge number of companies from B.C. coming to pursue China clean tech in the next three to five years? Not necessarily. But there will be some successes that can act as a showcase to others.” •
