Canadian businesses with ties to China are again taking aim at Canada’s Indigenous community as a potential economic partner, a recent report indicates.
“Preparing Indigenous Groups To Take On The China Market,” was written by Canadian consultancy Dentons Canada LLP after being commissioned by the Canada China Business Council. In the new report, officials called for First Nations communities – which hold “increased control over lands and resources” – to “take on the Chinese market” given the potential economic benefits from larger trade flows.
“The potential for economic activity between China and Canadian Indigenous businesses and communities is immense,” the CCBC report said. “… It has a large, growing middle class with an increasing demand for energy, natural resources, tourism, agri-food … and outputs from other industries which Canada, and Canada’s Indigenous peoples, have in large supply.
“.… China and Indigenous Canadians also have a shared history of marginalization and cultural similarities. Chinese migrants and Indigenous peoples both suffered from the discriminatory effects of colonial and post-Confederation laws and policies.”
According to Sarah Kutulakos, the CCBC’s executive director and chief operating officer, the business association commissioned the report as part of a diversity goal set in 2017 to increase the number of women, youth, minority and Indigenous business officials involved with the council.
The extra effort around the Indigenous community this time, she added, reflects the realities that Canadian business needs to increase its role in First Nations’ economic development.
“I think every Canadian and every Canadian organization needs to try to understand what role they can play in reconciliation,” Kutulakos said. “And for us, when we look at the pool of people doing business with China, there are thousands of companies that perhaps can or should be doing business with China, but they don’t know where to start.... And then on the Indigenous side, we really need to go a bit deeper to understand where the opportunities are and where the challenges are.”
This is not the first time Chinese and Canadian business interests with ties to this trade route looked at bringing Indigenous communities on board. Throughout the 2010s, efforts were made to build relationships, with groups such as the Musqueam community, which has deep ties to Chinese migrants in the first half of the 20th century, as well as to build fledgling trade deals with companies like Lax Kw’alaams’ Coast Tsimshian Resources LP on forestry resources.
In 2011, then-Assembly of First Nations national chief Shawn Atleo led a delegation to China to generate interest in Indigenous and Chinese trade links.
But since then, deals have mostly slowed to a trickle. Coast Tsimshian reported only a few China-bound log shipments (and declining) in 2018. At the time, Lax Kw’alaams officials said the community’s economic output was not sufficiently linked to the overall Canadian economy to reach Asia en masse, and most of the efforts since then have been towards better integration with the rest of Canada.
The report also comes at a strange time in China-Canada trade relations. While Canadian exports to China in 2021 grew 14 per cent from the previous year to a record high $28.8 billion, geopolitical frictions globally (including Beijing’s stance on the Russian invasion of Ukraine, anti-democratic crackdowns in Hong Kong and Xinjiang, as well as the Meng Wanzhou affair from 2018 to 2021 that saw China arrest two Canadians in retaliation) have sunk Canadian public opinion about the Chinese market to record lows.
In recent months, China’s stringent – and, as critics described, callous – enforcement of its zero-COVID policy has not only put global hubs like Shanghai and Shenzhen under lockdown but has also further disrupted global supply chains already under duress from the COVID-19 pandemic. Some economists have expressed doubt about China’s economic health in light of these month-long disruptions and other factors driving an exodus of foreign capital from the Chinese market.
Even though few Canadian officials are currently travelling to China given its strict quarantine restrictions, Kutulakos said the CCBC’s aim is to not only keep the figurative flame burning for Canadian businesses that may want to enter the world’s second-largest market but also to build capacity and understanding within segments of Canada’s business community for when things return closer to pre-COVID norms.
“I think China’s economic growth and continued consumption growth has kept the fires warm for companies that want to sell stuff there,” she said. “What we’ve tried to focus on during these couple of years is capacity-building. ... We’re able to use this sort of non-travel period to make sure people understand the important things that we would need to do business there.”
Kutulakos added that there continues to be Chinese outbound interest.
“What does Canada have that an investor might need?” she said. “Often, land and resources go hand in hand. And we have seen – even during bilateral tensions during the pandemic – a continued interest from Chinese investors in considering Canada, even when there’s no way to bring them here.... So I think the next step is for us to identify willing organizations or entrepreneurs to work with us on China.”
The CCBC is planning a trade mission to China in the fall, and Kutulakos said officials would like to see an entire mission – 15 to 20 delegates – from Indigenous organizations.
But such a move is far from risk-free, warned Margaret McCuaig-Johnston, senior fellow at the University of Alberta’s China Institute and a former leading Canada-China tech sector exchange official who has since become a vocal critic of Beijing.
McCuaig-Johnston noted that many Canadian businesses have entered the Chinese market lured by the promise of reaching a market of 1.4 billion people, only to realize that China’s individual provinces and municipalities act almost as separate regional markets, each with its own complexities that can overwhelm newcomers.
“Indigenous groups must be very cautious in dealing with China,” she said. “Some of our best companies have been taken to the cleaners in China, including clean-tech and clean-energy companies. Many western companies are now trying to reduce their risk there by diversifying to other Indo-Pacific countries that operate by international business standards and rule of law.”
The full CCBC report can be read at ccbc.com/preparing-indigenous-groups-to-take-on-the-china-market.